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Estonia Telecommunications Report 2008 (Business Monitor International) Market: Telecommunications Published Date: 17/12/2007 Market Research Report Title: Estonia Telecommunications Report 2008 Table of Contents: View Table of Contents Report Type: Market Report Country: Estonia Number of Pages: 56 
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Summary: Following growth of 16.1% in 2005, Estonia’s mobile market grew by a further 9.6% in 2006, with an additional 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. Market leader EMT once again outperformed its rivals throughout much of 2006, collecting 50% of net additions in Q206, 74% of net additions in Q306, and 70.5% in Q406. These gains had the effect of raising EMT’s overall market share to almost 49%. Despite a 4.1% fall in the number of prepaid users in the first quarter of 2006, EMT saw a huge upsurge in prepaid customer numbers throughout the rest of the year; it is largely 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 mobile subscriber growth was just 0.9% in Q107 and that in Q207 the sector stagnated, with Elisa Eesti and Tele2 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 be strong, and BMI expects 2007 as a whole to produce further growth. Nevertheless, the sector is already highly saturated, and we have therefore revised our growth estimates to take into account declining growth. 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, we anticipate a much more modest 4% rate of growth in 2008, with the growth rate dropping in each forecast year 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 by competition for more lucrative postpaid customers, as well an increasing emphasis on winning 3G customers 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 help to encourage further subscriber uptake. The 25,000 3G subscribers at the end of 2006 were equivalent to just 1.6% of mobile users. However, we believe that this total has the potential to reach 4.3% by the end of 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 slightly lower than previously predicted, growth has remained strong. We expect the ongoing investments in new broadband 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 market maturity score, which is on a par with its high competitive and regulatory environment scores.
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