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Estonia Telecommunications Report 2008Product Type: Market Research ReportPublished by: Business Monitor International Published: December 2007 Product Code: R302-1866 Description Following growth of 16.1% in 2005, Estonia’s mobile market grew by a further 9.6% in 2006, with anadditional 137,000 customers being added to the sector. Rates of growth were variable during the year,with the 1% and 1.5% growth rates in Q106 and Q206 rising to 3.2% in Q306 and 3.6% in Q406. Marketleader EMT once again outperformed its rivals throughout much of 2006, collecting 50% of net additionsin Q206, 74% of net additions in Q306, and 70.5% in Q406. These gains had the effect of raising EMT’soverall market share to almost 49%. Despite a 4.1% fall in the number of prepaid users in the first quarterof 2006, EMT saw a huge upsurge in prepaid customer numbers throughout the rest of the year; it islargely this prepaid growth which helped boost the operator’s market position. Although the sector performed well in 2006, the most recent data available suggests that Estonian mobilesubscriber growth was just 0.9% in Q107 and that in Q207 the sector stagnated, with Elisa Eesti andTele2 both reporting subscriber gains, but with EMT posting a net loss of 17,000 customers (all prepaid).Notwithstanding these most recent developments, growth in Estonia’s mobile sector has continued to bestrong, and BMI expects 2007 as a whole to produce further growth. Nevertheless, the sector is alreadyhighly saturated, and we have therefore revised our growth estimates to take into account declininggrowth. We predict that the number of mobile customers will increase by 6% in 2007 as a whole,reaching 1.656mn by the end of the year (giving Estonia a penetration rate of 123.6%). Furthermore, weanticipate a much more modest 4% rate of growth in 2008, with the growth rate dropping in each forecastyear thereafter. By the end of 2011, we expect the sector to have 1.799mn mobile subscribers (135%penetration). Looking ahead, we expect the Estonian mobile market to be increasingly characterised bycompetition for more lucrative postpaid customers, as well an increasing emphasis on winning 3Gcustomers with new high-speed data services. Although 3G subscriber growth has been limited to data,there are signs that it is starting to pick up, and we believe that the rollout of HSDPA technology will helpto encourage further subscriber uptake. The 25,000 3G subscribers at the end of 2006 were equivalent tojust 1.6% of mobile users. However, we believe that this total has the potential to reach 4.3% by the endof 2007, now that there are three operators offering 3G services. Meanwhile, although the number of broadband connections in Estonia at the end of 2006 was slightlylower than previously predicted, growth has remained strong. We expect the ongoing investments in newbroadband technologies and services to continue driving growth for the duration of our forecast period;we anticipate the sector reaching 255,000 connections by the end of 2007 (representing 19% penetration).In recent quarters, Estonia has edged up BMI’s regional telecoms business environment ranking table,and now sits in fifth position, a little behind Poland. The country now benefits from a high marketmaturity score, which is on a par with its high competitive and regulatory environment scores. Table of Contents
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