Armenia T​elecom market Gung-ho on Mobile Broadband with over 1 million Subscribers: Ken Research

The developing telecom sector in Armenia was occupied to build and to set an efficient telecommunication infrastructure in 2015. The market doesn’t offer a compelling opportunity as the addressable market is small with small population and low GDP per capita of USD 2,800 in 2015. The combined efforts of the government and private telecom operators have been persistently building the telecom network and other services. The mobile penetration has reached around 116% at the year end of 2014 with around 10% growth registered in number of mobile subscribers.

Efficient mobile broadband services are provided with the support of mobile network infrastructure in Armenia. The mobile broadband subscribers has surpassed 1 million number which now accounted for 1/3rd of the total mobile subscriber base in Armenia in 2015.

On the other hand, the fixed line market has been consolidating and has shown constant penetration statistics of 19%. Fixed broadband has provided a robust foundation for internet accessibility with 9% penetration. This has underscored a higher household internet penetration of over 45% at the end of 2014

The domestic telecom sector had seen tough period in the past. After a smooth growth in mobile subscribers in the past, the market registered a major slump due to Global Financial Crisis (GFC) in 2009. The telecom sector market declined due to financial crisis with minor 2% growth in mobile subscribers. Though the market shown some resilience and underscored a recovery since 2009 but growth has been a bit fluctuating. The mobile penetration has though jumped from 80% to 120% in the last 5 years.

Telecom industry in Armenia had encountered wax and wane time over the last 20 years. The market plummeted after the collapse of the former Soviet Union back in 90s with a noticeable decline in fixed-line teledensity. This was further exacerbated with the unstable socio-economic situation within the region and unsuccessful efforts at adopting any vigorous reform in the telecom sector to improve the situation. Hence, the industry was a late bloomer to the improved economic conditions due to the economic reform.

In due course, the telecom industry has evolved with the opening up of the wireless market. The government has made a divisive decision in selecting a 2nd mobile operator i.e. Karabak Telecom, a less renowned Lebanese owned company, in Armenia without apparent and competitive bidding. The company was officially awarded a license to provide a GSM network in Armenia. The company initiated the VivaCell services in 2005.

The country telecom regulator, Public Services Regulatory Commission (PSRC) granted a third mobile license to Orange Armenia. The company is fully owned by France Telecom. It launched the mobile service in 2009. The PSRC awarded the fourth mobile license to fixedline and Internet service provider, Ucom in 2013.

The mobile sector has seen a major boost with the instigation of 3G network by ArmenTel and K-Telecom in 2008. The 3G services have poised lot of opportunities for healthier market with robust ARPU registered by the telecom operators. The positive regulatory development in the mobile market was the launch of Mobile Number Portability in the financial year of 2013-14.

For further information on telecom market in Armenia, kindly refer to the publication on Armenia Telecom, Mobile and Internet Sector.