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Armenia - Telecoms, Mobile and Internet

  • September 2015
  • -
  • Paul Budde Communication Pty Ltd
  • -
  • 49 pages

Mobile broadband penetration in Armenia at over 30%
By 2015 the Armenian telecom market represented another developing market that is very busy trying to put an effective national telecommunications service in place. With its relatively small population and a GDP per capita of around US$2,800 in 2015, it does not offer a hugely lucrative market opportunity. However, the government and the operators have been systematically building telecom networks and offering services.

At the end of 2014 the mobile penetration was 116% and the mobile subscriber market was continuing to grow, the annual growth rate being at close to 10% at the time. On the back of the mobile networks an effective mobile broadband offering has quickly sprung up. Coming into 2015 the number of mobile broadband subscribers had passed one million, representing about one third of the total mobile subscriber base at the time. In the meantime, the fixed-line market had been shrinking or at least levelling off at around a relatively high 19% penetration. At the same time, fixed broadband provided a solid base for internet access with 9% penetration; this was underpinning a reasonably high household internet penetration of 46% by end-2014.

The local telecom market has had its difficult times. After a run of strong growth in mobile subscribers in particular, the market in Armenia experienced a major slowdown triggered by the Global Financial Crisis (GFC) in 2009. Demand for telecom services in Armenia plummeted as the most damaging impact of the GFC hit the country in that year. Mobile subscriber growth was negligible (around 2%). There has been some strong overall recovery since then, although growth has been somewhat erratic. In five years mobile penetration jumped from 80% to 120%.

The telecommunications sector in Armenia has certainly been experiencing a rollercoaster ride over the last two decades. The sector slipped into decline following the collapse of the former Soviet Union back in the 1990s, with the fixed-line teledensity falling markedly. This was partly as a consequence of the prevailing socio-economic instability within the region, but more significant a factor was that the country initially failed to embrace any vigorous reform in the telecom sector. Despite steadily improving economic conditions as the country underwent economic reform, the telecoms sector was initially slow to respond.

Eventually the telecom market started to undergo a transformation. In the opening up of the mobile market, the government made a controversial decision in choosing a second mobile operator without transparent and competitive bidding; Karabakh Telecom (K-Telecom), a little-known Lebanese-owned company, was officially awarded a licence to operate a GSM network in Armenia. K-Telecom launched its VivaCell service in 2005. The Public Services Regulatory Commission (PSRC), the country's telecom regulator, awarded a third mobile licence - to Orange Armenia. The newly licensed operator, 100% owned by France Telecom (Orange), launched a mobile service in 2009. Ucom, a fixed-line and internet service provider, was granted the country's fourth mobile licence by the PSRC in 2013.

The launch of 3G services by both ArmenTel and K-Telecom in 2008 and then Orange Armenia in 2009 gave the mobile sector a major lift; new generation services have since formed the basis of a much healthier market with stronger ARPU being reported by the operators.

An important, and indeed very positive, regulatory development in the mobile market has been the launch of Mobile Number Portability in 2013/2014, with good cooperation by the operators a feature of its introduction.


Key developments:
the mobile market in Armenia, after a period of erratic growth, had settled on a positive growth path by 2015;
the number of mobile subscribers has increased almost fivefold since 2006;
the mobile segment in particular has benefitted from increased competition;
the PSRC reported that Armenia had achieved 100% geographic coverage with its mobile services;
fixed-line growth in Armenia has been sluggish since 2009, actually running flat or going negative with no upturn in sight;
growing internet awareness in the country has seen a surge in internet users;
internet user penetration was estimated at around 46% coming into 2015;
as internet take up accelerated, broadband services have been booming, with both fixed and mobile broadband expanding;
slightly more than one in three households had fixed broadband connections by end-2013;
the rapid expansion of mobile broadband over the last few years has been a major feature of the local telecom market;
the government was planning to roll out a National Broadband Network (NBN), although the timetable remained unclear;
Mobile Number Portability (MNP) has been introduced with the operators setting up a joint enterprise to manage it;
in August 2015 the Orange Group sold 100% of Orange Armenia to local service provider Ucom;
VivaCell-MTS continued to expand its 4G presence across the country reaching almost 50% coverage by early 2015;
moving quickly into the fibre-based broadband market, Ucom was claiming 75,000 FttH subscribers by February 2015.

Companies mentioned in this report
ArmenTel, ArmenTel (Beeline), Orange, Orange Armenia, Ucom, GNC-Alfa, VivaCell-MTS, MTS, Sistema, Rostelecom, VimpelCom.

Table Of Contents

Armenia - Telecoms, Mobile and Internet
1. Executive summary
2. Key statistics
2.1 Country overview
2.2 Economy
2.2.1 Overview
2.2.2 IMF assessment of Armenian financial sector
2.2.3 Membership of World Trade Organization (WTO)
3. Telecommunications market
3.1 Overview of Armenia's telecom market
3.2 Background
4. Regulatory environment
4.1 Background
4.1.1 Telecommunications Law 1998
4.1.2 Foreign investment
4.1.3 ArmenTel monopoly
4.2 Developments
4.2.1 Mobile Number Portability (MNP)
4.2.2 ISPs and internet billing
4.2.3 Sale of Orange Armenia to Ucom
5. Fixed-network operators in Armenia
5.1 ArmenTel (Beeline)
5.1.1 Background
5.1.2 Business development
5.2 Other operators
5.2.1 Ucom
5.2.2 Cornet-AM
5.2.3 GNC-ALFA
6. Telecommunications infrastructure
6.1 National
6.1.1 Nagorno-Karabakh
6.2 International
7. Internet market
7.1 Overview
7.2 Background
7.2.1 Internet statistics
7.3 Broadband services
7.3.1 Overview
7.3.2 Digital Subscriber Line (DSL)
7.3.3 Fibre to the Premises (FttP)
7.3.4 Fixed wireless broadband
7.4 National Broadband Network (NBN)
7.5 VoIP
7.6 ISP market
7.6.1 Overview
7.6.2 Armenian Datacom Company (ADC)
7.6.3 ArmenTel (Beeline)
7.6.4 Ucom
7.6.5 GNC-Alfa
8. Mobile communications
8.1 Overview
8.2 Background
8.3 Mobile statistics
8.4 Mobile infrastructure
8.4.1 3G
8.4.2 4G / LTE
9. Major mobile operators
9.1 ArmenTel (Beeline)
9.1.1 Overview
9.1.2 Background
9.1.3 Operational statistics
9.1.4 Financials
9.1.5 Business development
9.1.6 Background developments
9.2 VivaCell-MTS (K-Telecom)
9.2.1 Overview
9.2.2 Licensing
9.2.3 Service launch
9.2.4 Operational statistics
9.2.5 Development
9.2.6 4G / LTE
9.3 Orange Armenia
9.3.1 Overview
9.3.2 Licensing
9.3.3 Service launch
9.3.4 Operational statistics
9.3.5 Business development
9.4 Ucom
10. Digital Media
11. Related reports
Table 1 Country statistics Armenia 2015
Table 2 Telephone network statistics 2014
Table 3 Internet user statistics 2014
Table 4 Mobile statistics 2014
Table 5 National telecommunications authorities
Table 6 Armenia's GDP real growth rate 2006 - 2017
Table 7 Historical - Fixed lines in service, annual change and teledensity 1991 - 2004
Table 8 Fixed lines in service, annual change and teledensity 2005 - 2015
Table 9 Historical - Internet users 1994; 2000 - 2004
Table 10 Internet users and penetration 2005 - 2015
Table 11 Historical - Internet subscribers 2000 - 2004
Table 12 Fixed internet subscribers 2005 - 2015
Table 13 Fixed broadband subscribers 2003 - 2015
Table 14 Mobile broadband subscribers 2009 - 2015
Table 15 Overview of fixed broadband/household subscribers 2014
Table 16 Households with internet access 2005 - 2015
Table 17 Internet bandwidth capacity 2001 - 2015
Table 18 Dial-up internet subscribers 2004; 2010 - 2014
Table 19 DSL subscribers 2010 - 2015
Table 20 Fibre to the Premises (FttP) subscribers 2010 - 2015
Table 21 ArmenTel (Beeline) fixed broadband subscribers 2009 - 2014
Table 22 ArmenTel (Beeline) fixed broadband ARPU 2011 - 2015
Table 23 Historical - Mobile subscribers 1996 - 2004
Table 24 Mobile subscribers 2005 - 2015
Table 25 Mobile operators, subscribers and annual change 2014
Table 26 Mobile operators by share of total mobile market 2014
Table 27 ArmenTel (Beeline) mobile subscribers 2007 - 2015
Table 28 ArmenTel (Beeline) mobile ARPU 2008 - 2015
Table 29 ArmenTel (Beeline) mobile broadband subscribers 2011 - 2015
Table 30 ArmenTel (Beeline) mobile revenue by market segment 2012 2015
Table 31 ArmenTel (Beeline) total capex 2012 - 2015
Table 32 VivaCell-MTS mobile subscribers 2007 - 2014
Table 33 VivaCell-MTS mobile broadband subscribers 2011 - 2015
Table 34 VivaCell-MTS mobile subscribers - prepaid v. postpaid 2013
Table 35 VivaCell-MTS mobile ARPU 2007 - 2013
Table 36 Orange Armenia - mobile subscribers 2009 2014
Table 37 Orange Armenia - mobile broadband subscribers 2009 - 2014
Table 38 Key broadcasting statistics 2014
Table 39 DTH (satellite) subscribers 2010 2014
Chart 1 Armenia fixed line and mobile subscribers 2001 - 2011
Chart 2 Fixed lines in service, annual change and teledensity - 2005 - 2015
Chart 3 - Internet users and penetration - 2005 2015
Chart 4 - Fixed broadband subscribers - 2006 - 2015
Chart 5 - Mobile subscribers, annual growth and penetration - 2005 - 2015
Chart 6 - Mobile operators and market share - 2014
Chart 7 - Mobile subscribers - 2009 - 2014

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