IHS Global Insight Perspective | |
Significance | The launch of 3G services in Armenia follows as part of an ongoing roll-out plan from parent group MTS, across the broader CIS region. |
Implications | Rival Armenian operator Armentel launched 3G services last October, so Vivacell will therefore hope to make up for its late entrance by capitalising upon its stronger subscriber base. |
Outlook | Healthy ARPU levels in Armenia suggest that there is a solid base for 3G uptake in the country, while a third player, Orange, is also due to launch services. |
Armenian mobile operator VivaCell has launched a 3G UMTS/HSPA network. Services have been launched in the capital Yerevan, as well as Gyumri and Vanadzor, with internet use available on existing tariff plans. VivaCell, the Armenian unit of leading CIS mobile operator Mobile TeleSystems (MTS) has also launched a range of solutions which it hopes will encourage uptake of its 3G services in Armenia. These include the MTS Connect USB modem, which allows direct connection to the internet from a computer; the MTS Connect tariff plan, which offers lower internet tariffs; a Videocall service; and VivaCell-MTS mobile portal, which provides access to the latest business, general and sports news. VivaCell has previously indicated that it had selected China's Huawei Technologies to supply its 3G equipment (see Armenia: 20 January 2009: MTS Selects Huawei for 3G Network in Armenia).
Outlook and Implications
MTS' CIS 3G Strategy
The launch of 3G services in Armenia extends on ongoing 3G roll-out plan from MTS, across the broader CIS region. Having obtained a 3G licence in its core Russian market in 2007, the operator launched 3G services there in May 2008, rolling out networks in 14 Russian cities by the end of the year, as part of an overt drive to increase revenues from data and content usage. While subscriber uptake has been unspectacular, and the economic slowdown could yet result in cuts in 3G investment from MTS, it aims to extend its coverage by up to 27 cities this year. This number will increase by a further 40 cities in 2010, by which time it aims to have launched HSPA-enabled networks in all regions of the country, although in common with Russia's other 3G licence-holders the operator has been unable to launch 3G services in the most attractive Russian market, the capital Moscow, due to frequency use by the country's military. MTS also launched 3G services in Uzbekistan in 2008, on the back of the launch of a 3G–equivalent CDMA 450 EV-DO Rev A service launch in Ukraine, in 2007. The operator has submitted an application for a 3G licence in Ukraine, and is also likely to partake in a tender for 3G licences in Belarus, scheduled to take place by 1 September 2009.
Armentel: The 3G Pioneer in Armenia
While VivaCell currently leads the Armenian mobile market by subscribers numbers, it will be the second 3G player on the market, following the launch of services in October 2008 by Armentel (see Armenia: 1 October 2008: Armentel Launches Armenia's First 3G Network). VivaCell will therefore hope to make up for its later entrance by capitalising upon its stronger subscriber base when promoting 3G services. Armentel's parent company, Russia's VimpelCom, has not released operational or financial indicators since then, but the generally healthy ARPU (average revenue per user) levels in the country (US$13.8 from Armentel at the end of the third quarter of 2008, and US$11.4 from VivaCell in the fourth quarter) suggests that there is a base for solid 3G uptake in the country. The country's third GSM and 3G licences were awarded to France Telecom's Orange last year, and given the experience and financial strength of the parent company, IHS Global Insight expects this operator also to compete strongly once it launches 3G services.