Belarus's wholesale mobile provider beCloud trialling 5G
Belarus's economic growth has stalled in recent years, with GDP showing negative growth between 2015 and 2017. Although inflation has been brought down to more manageable levels since the hyper-inflationary year of 2011, it remains high while the value of the Ruble has fallen in relation to other currencies, including the Euro. This prompted the government to re-denominate the currency in July 2016, with BYR10,000 becoming BYN1. The poorly performing economy has impacted on operator revenue, particular for the subsidiaries of Turkcell and Telecom Austria. The local currency was devalued by 6.8% in the fourth quarter of 2016 alone. These ongoing economic difficulties have also reduced customer spend, contributing to lower revenue and investment.
Nevertheless, there remain many opportunities for growth in coming years, particularly in the broadband segment where the incumbent telco Beltelecom is migrating its PSTN network to a fibre-based network. This will better position the company to offer a range of bundled services. Although the sector has been reformed, this has not yet resulted in the privatisation of the incumbent Beltelecom Although the government is keen to control the company's assets, there is greater pressure for it to sell state enterprises generally in a bid to reduce overall debt. Growth for Beltelecom has been adversely affected by the poor economy, though growth is expected in the FttP sector, where much of the company's capex is directed.
The mobile sector has also experienced some growth, with a rise in mobile penetration attributed to effective competition which has helped drive down consumer prices. Operators have concentrated on developing mobile broadband and data services with a view to capitalising on such services to increase ARPU. Recent spectrum auctions have facilitated the development of mobile broadband access, particularly in rural areas, while the state-sponsored operator beCloud, charged with developing a wholesale-based LTE network, has enabled commercial LE services to be launched by MNOs.
In early 2015 the government decreed that the 1.5% tax on revenue derived from telcos (which was put in place in 2007) should be channelled to developing universal telecom services, particularly aimed at rural areas. In mid-2016 the cash-strapped government increased the tax on all telecoms services from 20% to 25%.
beCloud and Huawei 5G trials deliver data at 2Gb/s;
Telco tax of 1.5% of revenue allocated to the provision of universal telecom services;
Beltelecom closes down its dial-up internet and WiMAX services;
Belarus launches its first telecoms satellite;
MDC begins deploying GPON networks;
Beltelecom signs up one million subscribers to its GPON network;
Government again rejects plan to sell the state's 51% interest in Mobile TeleSystems (MTS);
International transmission capacity growing in line with rising internet usage;
LTE use reaches 60% of mobile subscribers;
Report update includes the Ministry of Communications data to March 2017, operator data to Q2 2017, recent market developments.
Market penetration rates in Belarus's telecoms sector 2016
Market – Penetration rate
Fixed-line telephony – 49.0%
Fixed broadband – 33.3%
Mobile SIM (population) – 124.1%
Companies mentioned in this report:
Beltelecom, Cosmos TV, Minsk TV and Information Networks (MTIS), Teleradio, Belcel, MDC, MTS Belarus, BeST.