Virus impact over each market - telecom operators, government agencies and regulators' responses - revised forecasts for the next 5 years.
The telecommunications sector remains one of the fastest growing areas of the Georgian economy, accounting for between 5% and 7% of GDP. There is still room for further growth, with penetration rates in the mobile and broadband segments relatively low by the standards of European benchmark countries. Growth in mobile broadband has been steady, supported by the auction of spectrum in the 800MHz and 2100MHz bands which has enabled the network operators to expand the reach and capabilities of LTE services. LTE services now cover the vast majority of the population. The regulator during 2019 worked on a framework to develop services based on 5G, though given the existing capacity of LTE it is unlikely that 5G services will be made available by operators before 2022.
The country still faces economic challenges, which have impacted on the telecom sector. Revenue from fixed-line voice services has fallen sharply, while revenue from the mobile sector has been under stress from intense competition, compounded by the fall in messaging traffic as subscribers migrate to alternative OTT services. The overall market is largely propped up by the broadband sector, where the number of subscribers continues to increase steadily. The sharp growth in the number of fibre broadband connections has impacted on the DSL segment as customers are migrated from copper to fibre networks. DSL now accounts for only a small proportion of fixed broadband connections. This development reflects the significant increase in investment in infrastructure in recent years, spurred by the government’s national broadband plan. Much of the investment in fixed-line infrastructure is earmarked for fibre networks, which will provide backhaul for future 5G services.
BuddeComm notes that the outbreak of the Coronavirus in 2020 is having a significant impact on production and supply chains globally. During the coming year the telecoms sector to various degrees is likely to experience a downturn in mobile device production, while it may also be difficult for network operators to manage workflows when maintaining and upgrading existing infrastructure. Overall progress towards 5G may be postponed or slowed down in some countries.
On the consumer side, spending on telecoms services and devices is under pressure from the financial effect of large-scale job losses and the consequent restriction on disposable incomes. However, the crucial nature of telecom services, both for general communication as well as a tool for home-working, will offset such pressures. In many markets the net effect should be a steady though reduced increased in subscriber growth.
Although it is challenging to predict and interpret the long-term impacts of the crisis as it develops, these have been acknowledged in the industry forecasts contained in this report.
The report also covers the responses of the telecom operators as well as government agencies and regulators as they react to the crisis to ensure that citizens can continue to make optimum use of telecom services. This can be reflected in subsidy schemes and the promotion of tele-health and tele-education, among other solutions.
Caucasus Online, Georgia Online, United Telecom, Telecom Georgia, Egrisi, SaNet, SilkNet, Georgian Railway Telecom, Akhali Kselebi
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BuddeComm's strategic business reports contain a combination of both primary and secondary research statistics, analyses written by our senior analysts supported by a network of experts, industry contacts and researchers from around the world as well as our own scenario forecasts.
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