Wednesday, March 5 2014

 Internet services will dominate over the traditional telecom services (fixed line and mobile) in the coming years. Cable TV and Internet services have the best prospects for growth in Armenian telecom sector. These are the findings of  the "Telecommunication in Armenia" research conducted by Ameria CJSC. The March 4 presentation covered the current state, challenges and development prospects of the telecommunication industry in Armenia. A total of 1,067 Yerevan residents aged 15-69 participated in the survey. The field work period was from December 2013 till January 2014.  
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Haykaz Fanyan, Research Consultant, pointed out that in 2013 the mobile services industry revenues (VAT exclusive) totaled AMD 111 billion or USD 271 million (4.7% year over year growth). In 2012 the mobile services retail market accounted for AMD 90.6 bn vs AMD 68.8 bn during the first nine months of 2013. The mobile services market in Armenia is predominated by the Rule of Three and Four, meaning it is a stable competitive market with the share of the largest competitor (VivaCell MTS) around 4 times higher than the market share of the runner-up (Orange Armenia). To note, there are three mobile operators in Armenia: ArmenTel (Beeline brand) and the aforementioned two companies. 

He added that in 2013 the Armenian telecom industry revenues totaled AMD 173.73 billion or $424 million (VAT exclusive). As compared with 2012, this index grew by 5% or by AMD 8.52 billion ($13 million). According to the survey, when asked, "If you could switch to another mobile operator without changing your phone number, would you take the chance?", 52.8% of the respondents replied "Definitely no", 23.02% - "Probably no", 13.11% - "Not sure", 7.9% - "Probably yes", and only 3.15% said "Definitely yes". The mobile number portability service will not affect Yerevan's mobile market significantly. Although this option could be accompanied by price and non-price competition creating resonance in the market.  
Fanyan said that if the telecom industry is conventionally divided into 3 components, the fixed line services received 13% of total revenues in 2013 (down 2 pct points versus 2012), mobile services received 64% of the revenues (no changes versus 2012), Internet services 17% (no changes versus 2012) and other services obtained 6% (down 2 pct points versus 2012).

According to Ameria's estimations, cable television services market is the most rapidly growing market in the industry.  Revenues of this subsector grew four times in 2010-2013. The year over year growth made up 25% or AMD 2.8 billion.  According to Ameria specialists' projections, the number of cable TV subscribers in Yerevan only is going to increase by 38,000 in the coming years. 43.3% of households in Yerevan use Pay TV services, and 53.5% are still using analog TV only.

Beeline (41%) is in the lead on the broadband Internet retail market of Armenia by the number of subscribers. The following players rank next: Orange (21%), ViveCell-MTS (21%), Ucom (11%), Rostelecom (1%). The main internet services used by the population of Yerevan are social and dating websites (59%), Skype, Viber and other video call services (50%), download/watch movies and music (46%). Fanyan stressed that the fixed line phone communication in Yerevan is still topical: 68.7% of fixed-line users (about 91.5% of population) aged 15-69 use fixed-line services every day.      

55% of the households in Yerevan have only one computer device. Only 8.5% of households in Yerevan possess a laptop, a tablet and a PC at the same time. On the average, there is 1.15 cell phone per one mobile services user aged 15-69 in Yerevan, with 86% having 1 cell phone only, 11.96% having two cell phones and 1.7% having three cell phones.

To note, Ameria has been conducting such surveys for 1.5 years, with each of them touching on a particular segment.