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East Timor (Timor Leste) - Telecoms, Mobile and Internet

  • January 2014
  • -
  • Paul Budde Communication Pty Ltd
  • -
  • 27 pages

East Timor's incumbent loses its monopoly following the licensing of two new operators
East Timor, which has adopted the name Timor-Leste and has come to be commonly known by both versions of the name, is continuing its effort to simply maintain integrity as a nation. The country ranked number 23 in the 2011 Index of Failed States, not a promising statement on its national development status; however, this was up from 20 in the 2009 Index. And it had jumped to 28th place in 2012. It further improved the following year reaching 32 in 2013.
So in the last few years East Timor has removed itself out the critical' 20 category and continued with some modest but nonetheless important gains in the way it manages itself. The nation has been pressing ahead with the regeneration of its economy and the rebuilding of infrastructure. The effort to roll out telecommunications infrastructure in particular has been a key part of this. Despite the considerable energy that has been going into this rebuilding, the prevailing social and political environment continues to present major challenges to those seeking to improve the country.

After years of struggle and heartache East Timor gained its independence from Indonesia in 2002. The euphoria had hardly diminished when political instability and the civil unrest erupted in the country in 2006 and continued into 2007. Despite the election of a new government led by Nobel Peace Laureate Jose Ramos-Horta in 2007, opposition to the administration caused further violence and looting. A state of emergency declared in 2008 was lifted a few months later, following the surrender of most of the rebels. There has been no major political unrest since then.
To the outside observer, the country appeared to have started reasonably well in rebuilding its entire infrastructure following the turbulence that ensued after the referendum of 1999. However, the events over the 2006-2008 period caused major concerns about the direction of East Timor; it remained difficult to assess the long term impact of these events on the country's fragile economy. It is noted that government spending has increased dramatically over the last few years in line with the country's increased energy income.

East Timor remains one of the poorer countries in the Asia-Pacific region, despite the implementation of a National Development Plan and the considerable progress it has made since independence. The ongoing challenges are significant; the public sector administration, law and justice, and governance are all crying out for further attention, whilst a critically low skills base, high population growth and limited prospects to generate jobs combine to compound the situation further. East Timor faces a complex array of problems. It will need substantial assistance from the international community, for some time to come.

In the meantime, throughout this most difficult of political periods, the country's telecommunications sector has been expanding with the mobile telephone sector experiencing a particularly strong and sustained surge. After recording huge annual growth rates over a number of years from 2006 onwards, by the start of 2014 the country's mobile subscriber base had increased rapidly in a short period of time and penetration was close to the 60% mark. Fixed-line network expansion was continuing to languish, however, with fixed teledensity down around 0.3% and seemingly stuck there. Although it was difficult to get accurate figures on the internet market, it was clear that growth in this sector remained highly constricted and there was little optimism about online activity in East Timor in the short term. Whilst there was a limited fixed broadband service in the country, the number of subscribers for this type of access remained extremely low. The advent of mobile broadband internet access provided a boost to the internet sector; however, again, the initial penetration figures were not having a major impact on the market.

East Timor's liberalisation of its telecom sector has come about rather rapidly. Two new operators were licensed in July 2012 and were set to join Portugal Telecom's subsidiary Timor Telecom (TT), which won a tender in 2002 to build the tiny nation's telecom infrastructure virtually from nothing. It had initially been granted an exclusive licence in the market until 2017. In March 2012, however, an agreement was reached between the government and TT to end its monopoly earlier than planned. A tender was subsequently launched for two mobile licences. By 2013 the two new operators had launched their respective mobile offerings and the market was rapidly changing shape on the back of competition.

The government was also in the process of setting up a new independent regulatory authority for the telecom sector.
East Timor finally became a member of the International Telecommunication Union (ITU) a few years ago. While the ITU does provide some statistical information on this market, it has continued to be a difficult task to obtain official statistics for the country's telecom sector. Where official statistics are not available, BuddeComm has attempted to provide estimates.

Market highlights:

after surging in the 2008/2009 period, the East Timor mobile market grew by around 30% in both 2010 and 2011;
however, total mobile subscriber growth was flat' in 2012, ahead of the licensing and launch of two new operators;
the Timor Telecom monopoly had officially ended in April 2012 and the two new operators were licensed in July 2012;
in the newly competitive market, mobile subscriber numbers had reached an estimated 700,000 coming into 2014;
in sharp contrast with the mobile market, both fixed-line subscriptions and internet usage in its various forms remained especially low, with only modest growth likely in the short term;
on the broader national front, the country's recent history of political and civil unrest continued to cause some uncertainty and predictions for development were guarded;
nevertheless, on a broader front progress was being made: the country was a poor number 20 in the world in the rankings provided by the 2009 Index of Failed States; it has subsequently managed a major jump up the rankings to come in at number 32 in the 2013 index;
The government was also in the process of setting up a new independent regulatory authority for the sector.

East Timor key telecom parameters 2012 - 2014
Category | 2012 | 2013 (e) | 2014 (e)
Fixed-line services:
Fixed-line penetration (population) | 0.3% | 0.3% | 0.3%
Fixed internet subscriber penetration (population) | 0.10% | 0.12% | 0.14%
Fixed internet subscriber penetration (household) | 0.5% | 0.6% | 0.7%
Mobile services:
Mobile penetration (population) | 52% | 58% | 63%
(Source: BuddeComm)

This report provides an overview of the trends and developments in the telecommunications markets in Timor Leste. Subjects covered include:
Key statistics;
Market and industry overviews;
Regulatory environment;
Mobile market;
Internet market.

Table Of Contents

East Timor (Timor Leste) - Telecoms, Mobile and Internet
1. Executive summary
2. Key statistics
3. Country overview
3.1 Background
3.2 Economy
4. Telecommunications market
4.1 Overview of East Timor's telecom market
4.1.1 Background
4.1.2 Recovery period
4.1.3 Strategic Development Plan 2011 2030
4.1.4 Liberalisation of telecom sector
5. Regulatory environment
5.1 United Nations Transitional Administration in East Timor
5.2 National telecommunications policy
5.3 Autoridade Reguladora das Comunicacoes (ARCOM)
5.4 Autoridade Nacional de Communicações (ANC)
5.5 Regulatory developments
5.5.1 Background
5.5.2 New operator licences
5.5.3 Deregulation
6. Telecom operators in Timor Leste
6.1 Background
6.2 Timor Telecom
7. Telecommunications infrastructure
7.1 National infrastructure
7.2 International infrastructure
7.2.1 Satellite networks
7.2.2 Submarine cable
8. Internet market
8.1 Overview
8.2 SAPO East Timor
8.3 Internet statistics
8.4 VoIP
8.5 E-commerce
8.5.1 E-government
8.5.2 eProcurement portal
9. Broadcasting market
9.1 Overview
10. Mobile communications
10.1 Overview of East Timor's mobile market
10.2 Mobile statistics
10.3 New mobile licences
10.4 New mobile operators
10.4.1 Overview
10.4.2 Telin
10.4.3 Telemor
11. Related reports
Table 1 Country statistics East Timor (Timor Leste) 2013
Table 2 Telephone network statistics 2013
Table 3 Internet user statistics 2013
Table 4 Mobile statistics 2013
Table 5 National telecommunications authorities
Table 6 East Timor's GDP real growth rate 2004 - 2014
Table 7 Timor Telecom's mobile subscribers 2003 - 2013
Table 8 Fixed line subscribers, annual change and penetration 1995; 1998 - 2000; 2003 - 2013
Table 9 Internet users 2005 - 2013
Table 10 Fixed internet subscribers 2003 - 2013
Table 11 Fixed broadband subscribers 2003 - 2013
Table 12 Mobile broadband subscribers 2011 - 2012
Table 13 Internet bandwidth capacity 2003 - 2013
Table 14 Mobile subscribers 1999 - 2013
Chart 1 - Timor Telecoms mobile subscribers - 2003-2013
Chart 2 - Fixed line subscribers and penetration - 2003 2013
Chart 3 - Internet users and penetration - 2005 2013
Chart 4 - Fixed internet subscribers and penetration - 2003 2013
Chart 5 - Fixed broadband subscribers and penetration - 2003 2013
Chart 6 - Mobile subscribers - 2003 - 2014 (e)

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