IHS Global Insight Perspective | |
Significance | As expected, the country's two leading GSM operators have been awarded 3G licences and plan to launch commercial services within a year. |
Implications | With mobile penetration in the country now approaching 100%, 3G service provision will enable MTS Belarus and Velcom to increase their focus on increased value-added service provision and therefore improved subscriber quality. |
Outlook | Although BeST may see its 3G market leadership whittled away, it has boasted impressive GSM subscriber growth and plans to double its customer base to 2 million by end-2010. |
The two leading GSM operators in Belarus have announced that they have been issued with 3G licences by the national State Commission for Radio Frequencies, reports Prime-Tass. Market leader MTS Belarus and second-largest operator Velcom have each indicated that they have been awarded the relevant frequencies for 3G provision. MTS Belarus anticipates that it will launch a 3G network in the capital Minsk and the Minsk Region by 31 December 2010, while Velcom aims to launch a commercial 3G network in the first quarter of 2010.
Meanwhile, the country's only currently licensed 3G provider, BeST, has reported that it has achieved 1 million GSM subscribers and is now aiming to double that number by the end of 2010.
Outlook and Implications
3G Licence Awards as Expected: The 3G licences awarded to MTS Belarus and Velcom will give them the opportunity to compete with BeST, which, although the smallest GSM operator in the country, became the first 3G operator in November, having been awarded its 3G licence in August. The award of the licences is not unexpected; both MTS Belarus and Velcom having preliminary 3G licences back in October, and making clear their eagerness to add 3G to their respective service portfolios (see Belarus: 28 October 2009: MTS Belarus, Velcom Receive Preliminary Regulatory Approval for 3G Service Provision). With mobile penetration in the country now approaching 100% this attitude is understandable, and 3G service provision will enable them to increase their focus on increased value-added service provision and therefore improved subscriber quality, as opportunities for subscriber uptake begin to dwindle. Both operators are backed by foreign parent groups with experience in the field of 3G operations, Russia's Mobile TeleSystems (MTS) having launched 3G services in 2008 and mobilkom Austria, the Austrian unit of Velcom parent Telekom Austria, having been awarded its 3G licence back in 2003.
Competition in 3G Sphere to BeST: BeST was awarded the country's first 3G licence in August 2009 and launched commercial 3G services in early November (see Belarus: 30 October 2009: BeST Primes for 2 November 3G Launch). It has therefore had the opportunity to establish a lead in the country's 3G market, but with the smallest GSM subscriber base of the country's three operators it remains at something of a disadvantage, and as its larger rivals market their own 3G services to their broader subscriber bases IHS Global Insight expects that it will find its current 3G market leadership gradually whittled down.
BeST Takeover Stimulated by Turkcell Takeover: Having launched GSM services in December 2005 BeST was a slow starter in the mobile market, but has been injected with momentum by the June 2008 takeover by Turkey's Turkcell. Despite a national penetration level approaching triple-digit territory, which typically would limit opportunities for subscriber growth, BeST has achieved significant subscriber uptake, including the addition of more than 200,000 subscribers in December alone. While it remains the country's smallest operator, its 1 million subscriber base standing within a national market of more than 9 million, its presence as a low-cost competitor has further stimulated a healthy mobile sector, ultimately benefiting the consumer. However, BeST has indicated that it plans to become market leader for ARPU within 12 months, suggesting a possible move away from the low-cost approach.