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Estonia Leads Mobile Subscriber Growth in Baltic States
2002-01-17 admin
At the end of 2000, Estonia was clearly in the lead with a penetration level almost
double that of Lithuania and Latvia and, in the next few years, this is expected
to pass 70%, say analysts
18 January 2002
Improving economic conditions and increased competition among operators has seen the mobile telecoms markets in all three Baltic countries steadily increase, according to IDC research.
At the end of 2000, Estonia was clearly in the lead with a penetration level almost
double that of Lithuania and Latvia and, in the next few years, this is expected
to pass 70%.
However, IDC also predicts that Lithuania and Latvia will close the penetration gap to 65% and 50% respectively by end of 2005.
"Having three operators competing for subscribers long before Latvia or Lithuania was an added advantage to Estonia and drove down tariffs, making mobile services more affordable" says Linda Öhman, Research Analyst.
"The promotion of pre-pay services was key to this growth," continues Ohman
"and IDC expects to see the same trend develop in Latvia and Lithuania."
Decreasing tariffs across the region played a significant role in subscriber growth but resulted in lower average revenue per user (ARPU).
"This fall in ARPU is predicted to slow as subscriber growth levels out and by the end of the forecast period in 2005, we predict it will once again begin to climb," says
Öhman. However, as Latvia and Lithuania's subscriber bases take longer to even
out, their ARPU will continue to fall.
SMS has caught the interest of Baltic subscribers and operators are now offering
enhanced services in an effort to increase usage as revenues continue to grow.
"For Estonia, we are forecasting steady growth in SMS revenue until 2003, at
which point it will level out as WAP begins to take off. Development will be a little
slower in Latvia and Lithuania where we believe data communication won't have any
real impact until 2004.
However, SMS will remain an important segment, generating
just under 20% of total revenue in both countries by the end of 2005" says Öhman.
www.idc.com
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