New Market Report: Estonia Telecommunications Report 2013

Recently published research from Business Monitor International, "Estonia Telecommunications Report 2013", is now available at Fast Market Research

by Bill Thompson

(WireNews+Co) - Boston, MA - 07 January 2013

BMI View: Estonia's telecommunications market is a regional leader in terms of the deployment of next generation infrastructure such as LTE and fibre. It also has a high level of value added service deployment in both wireless and wireline services, underlining its position at the forefront of the region.

Despite this operator financial performance has been squeezed by the presence of three internationally backed operators vying for customers in a market of a little over 1.3mn potential subscribers. Looking ahead we expect competition to limit returns, however it is worth noting that the Estonian real private final consumption growth five-year outlook is far ahead of many countries in the region, which will be a relative boost.

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Key Data:

- Elisa Eesi has outperformed in terms of net subscription additions in recent years and overtook Tele2 to become the second largest operator by subscriptions in Q411.
- The Estonian broadband market has continued to expand rapidly. The most recent regulatory data show broadband subscriptions increased 24.2% in 2011 to reach penetration of 36.8%.
- Estonia moved up one place in the Central and Eastern Europe Risk/Reward Ratings to 7th position. It was buoyed by BMI's in-house forecast for high real private final consumption growth over the five years from 2012.

Key Trends And Developments

The key development in the mobile market has been the investment by operators in LTE. In October 2012 Tele2 stated it had deployed around 150 LTE base stations in Tallinn and plans to launch LTE services in November 2012. The rollout is part of the April 2012 contract the operator signed with vendor Nokia Siemens Networks (NSN). Meanwhile, Tele2 achieved 100% coverage of Estonia via its 3.5G service in November 2011.

The launch follows that of EMT, the mobile market leader, which in April 2012 announced it had expanded its LTE network in Harju, Voru, Jarva, Polva and Tartu and that its LTE network reached 35% population coverage. This followed the February 2012 announcement that traffic over its GSM network had been overtaken by traffic on its LTE network due to the higher data intensity of LTE services.

Meanwhile, in the wireline data market, Tele2 strengthened its position with the acquisition of Televorgu from state-owned Eesti Energia In January 2012 in a deal worth SEK225mn (US$32mn). The acquisition adds to Tele2's wireline infrastructure, boosting its competitiveness in the converged service market, as well as offering the potential for reduced cost in the provision of wireless data services by reducing reliance on other operators for backhaul and transit.

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