Communication (market of Moldova)

Market size

2017

Revenues of mobile operators of Moldova were reduced by 6.8 million US dollars

The total amount of revenues of mobile operators of Moldova in 9 months 2017 was reduced by 4.6% in comparison with the same period of last year and was 144 million US dollars. Such digits were sounded by National regulation agency in the field of electronic communications and information technologies (NAREKIT).

For this reason in mobile communications market also decrease in average monthly income on one user (ARPU) for 5.7% – 74.7 leu ($4.2) is recorded. So, Orange Moldova registered ARPU in the amount of 80.6 leu ($4.6), Moldtelecom – 72.8 leu ($4.1) and Moldcell – 64.8 leu ($3.7)^[1].

Basic reasons of reduction of volume of income in the mobile market, according to experts, are:

• change of consumer preferences of users of mobile telephony to alternative services (OTT services: Skype, Viber, etc.);
• reduction of income from services in interconnection of networks of national suppliers after decrease in the marginal price which they can levy, according to NAREKIT regulating the act, for the termination of national calls in own network of mobile telephony;
• market overstocking of mobile communication.

At the same time in Moldova for this period growth of number of users of mobile communication by 63.7 thousand (+1.4%) is recorded. The population uses 4.4 million sim cards. Level of penetration of mobile services on 100 inhabitants of the republic grew by 1.9% and was 126.5%, i.e. one user often owns two or three sim cards.

At Moldtelecom companies the subscriber base increased by 4.5%, to 366.5 thousand, and at Orange Moldova – for 1.9%, to 2.6 million. The number of users of Moldcell was reduced by 0.13% and was 1.5 million.

According to NAREKIT, in January-September, 2017 market shares of three mobile operators on income did not undergo significant changes. For the end of September, 2017 of Orange Moldova the market share made 64.6%, Moldcell – 30.9% and Moldtelecom – 4.5%.

Moldova entered in top-5 the countries on a population scope gigabit Internet access

90% of Internet users of Moldova can be connected to Network on speed of 1 GB/page. On the research Viavi Solutions, the republic takes the third place in top-5 the countries on a population scope gigabit technology.

Gigabit Internet connection is available in 41 countries of the world. The leader is Singapore – 95% of residents of the country, on the second place – South Korea, 93% or 46.7 million people in which such speed is potentially available, can use such speed. In addition to Moldova, in top five on a population scope the gigabit technology specifies in a research Portugal (64%) and New Zealand (63%).

According to the research Viavi Solutions, about 91% of gigabit connections are based on fiber optic technology, the share of cellular connections makes 3.65%. In 5.26% of cases speed in 1 GB / with is provided by HFC networks (Hybrid fiber-coaxial, the hybrid fiber coaxial cable – a comment of DR), and less than 1% are the share of Wi-Fi.

According to forecasts of experts, in the world significant growth of a share of cellular gigabit connections is expected. According to Viavi, about 25 mobile operators hold laboratory testings of a 5G, and 12 already passed to field tests.

2016

NAREKIT

The market of electronic communications of Moldova in 2016 grew due to high demand of services of the mobile and fixed Internet accesses. Such output is confirmed by data from the Report on dynamics of the market of electronic communications in 2016 which is made by National regulation agency in the field of electronic communications and information technologies the Report on dynamics, reported the noi.md resource in April, 2017.

On the sales volume, the number of users, level of penetration of services, traffic of data of service of the mobile and fixed Internet showed the highest growth. So, total sales of these services in comparison with 2015 grew by 12% and exceeded 1.8 billion lei, having been about 27% of the total amount of the market of electronic communications.

According to the data provided in the report the number of users of the broadband mobile Internet grew by 30% (on the basis of technologies 3G, 4G and through dedicated access) and was more than 1.8 million subscribers, and the number of users of the fixed Internet increased by 4.3% and was over 557.4 thousand. Level of penetration of services of the mobile Internet on 100 inhabitants was 54%, and services of the fixed Internet – 15.7%.

Among basic reasons of such growth of the market authors of the report call increase in demand for the corresponding services, gain of the competition between suppliers, development of infrastructure of access to Network on the basis of technologies 3G, 4G and fiber optic technologies.

At the same time growth in sales of services of the mobile and fixed Internet for 14.5% they connect with reduction of sales volumes of services in the markets of the mobile and fixed telephony, broadcastings and relayings of audiovisual programs. Authors of a research give such digits: sales of services of mobile telephony decreased in comparison with 2015 by 4.4% and made 3.4 billion lei, and sales in the market of the fixed telephony in which recession is observed in the last decade, were reduced by 14% and made 876.1 million lei. At the same time sales volume in the market of broadcasting and relaying of audiovisual programs was reduced by 18.9% and was 297.8 million lei. According to experts of NAREKIT such situation is caused by change of consumer preferences of users who even more often give preference to OTT services. And this trend inherent and to the markets of other countries, will become more expressed every year – most of users will use services of mobile communications via smartphones.

Bureau of audit of circulations and Internet (BATI)

According to Bureau of audit of circulations and the Internet (BATI) of the republic, the most part of Internet users using mobile devices browses information and communicates in social networks. On average in a month users spend 13 hours for mobile gadgets and 15 for stationary PCs.

In 2016 the market of a voice communication of Moldova was reduced, despite increase in number of subscribers of telecoms. According to statistical data, sales of services decreased by 159 million lei (about $8 million), or 4.4%, and made 3.4 billion lei (about $172 million) for last year. Though the number of subscribers increased by 2.4% and reached 4.4 million. The volume of voice traffic was reduced, in comparison with 2015, by 1.7%, or 107.5 million minutes, and was 6.2 billion minutes^[2].

The situation which arose in the market of services of mobile telephony is explained by transition of users of mobile communication to more active use of OTT services (Skype, Viber, etc.). By data, which were provided to National regulation agency in the field of electronic communications and information technologies (NAREKIT) by three service providers of mobile communications (Orange Moldova, Moldcell and Moldtelecom (Unite brand), negative dynamics of total amount of voice traffic was caused, mainly, by reduction of this indicator at Orange Moldova. Almost traffic volume in network of this supplier was reduced by 5% (214.3 million minutes) and was 4.1 billion minutes. Voice traffic in networks of Moldcell and Moldtelecom companies increased by 6.1% (on 100.6 million minutes) and, respectively, for 2% (6.3 million minutes), and having made 1.8 billion minutes and, respectively, 317.5 million minutes. In general it led to reduction of average monthly traffic (0.5%) for one user up to 225 minutes (3 hours and 45 minutes), at the same time the average duration of one conversation was 1.7 minutes.

Influenced reduction of sales at Orange Moldova and Moldcell companies decrease in total sales of services of mobile telephony. Sales volume at these two suppliers was reduced respectively by 129.8 million lei ($6.5 million) (5.4%) and for 38.5 million lei ($1.9 million) (3.6%), having been according to 2.2 billion lei ($111 million) and 1.4 billion lei ($71 million). Sales of Moldtelecom increased by 9.3 million lei ($472 thousand) (6.8%) and made 146 million lei ($7.4 million). As the result, average monthly income on one user (ARPU) of mobile telephony was reduced by 4.1% and made 66.2 lei ($3.3). This indicator at Orange Moldova was 75.3 lei ($3.8), Moldcell – 57.6 lei ($2.8) and Moldtelecom – 36.5 lei ($1.8).

NAREKIT explains the insignificant growth of a total quantity of users of services of mobile telephony with expansion of a subscriber base of all three telecoms. At Moldtelecom the subscriber base increased by 29.6 thousand (9.2%) – to 350.7 thousand, at Orange Moldova — by 57.8 thousand (2.3%) – to 2 million 567.8 thousand and Moldcell – by 18.4 thousand (1.2%) – to 1, 5 million. By the end of 2016 of 3.7 million subscribers actively used mobile services, those who did not use and did not pay for the last month of any service there were 640 thousand.

Level of penetration of services of mobile telephony on 100 inhabitants in 2016 increased by 3% and was 124.7% – fall on 100 residents of Moldova on average more than 124 Sim cards of different operators (some users use from two or more Sim cards).

2015: Only 50% of the population use the Internet

2013

At the beginning of 2013 the number of the subscribers connected to networks of operators of fixed connection was 1,205,900, and the level of penetration of these services on hundred inhabitants - 33.9%. The total quantity of users of mobile communication reached 4,262,000, at the same time the level of penetration of these services - 119.7%.

2012

In 2012 total sales of the sector of ICT of Moldova increased in comparison with 2011 by 3.4% and were 6.7 billion lei (or about $545 million; 100 lei are approximately equal $8 at this time). The largest volumes of sales were mentioned in the markets of the mobile and fixed telephone communication – 3.733 billion lei and 1.546 billion lei respectively. And the biggest growth was registered in the market of an Internet access and data transmission – 19%, and in the market of services of broadcasting and relaying of audiovisual programs - 16%.

Tax on liquidation of poverty on telecom operators

In 2005 and earlier each cellular subscriber in Moldova connected on a contract tariff plan was obliged to pay monthly the specific tax "on poverty liquidation" in the amount of $2.

For April, 2013 these payments remain, but in the changed type. According to the law about republican and local funds of social support of the population, for the purpose of rendering financial support to socially vulnerable segments of the population the Republican fund of social support of the population is formed. All three service providers of mobile communication (Orange Moldova, Moldcell and Unite of JSC Moldtelecom) pay in this fund of social support of the population of means in the amount of 2.5% of a sales return connected with these services.

Industry history

1998-1999: Voxtel (after Orange Moldova) and Moldcell

In 1998-1999 in Moldova there began work the first two operators of cellular mobile communication: Voxtel (after Orange Moldova) and Moldcell which are provided by such foreign investors as France Telecom and Telia Company (before TeliaSonera) to Sonera. The volume of the foreign investments in the communications industry began to increase since then from year to year. In 2012 the volume of these investments was about 1 billion lei.

2001: Accession to WTO and restructuring of the industry

At accession to WTO in 2001 the Republic of Moldova undertook the obligation to undertake reforms on restructuring of the communications industry which provided separation of functions of policy of development of the industry, regulation and provision of services. As a result of this reform the regulating authority - National regulation agency in the field of telecommunication and information science (NAREI), later - National regulation agency in the field of electronic communications and information technologies (NAREKIT) with function of regulation of the market of services of telecommunication was created. Behind the industry ministry there were functions of development and deployment of strategy and the politician of development of the industry, administration of a radio frequency spectrum, the legislative initiative, etc.

2004: Moldtelecom lost monopoly for the international telephony

In 2004 after complete liberalization of the market of communication services (Moldtelecom lost monopoly for the international telephony), except JSC Moldtelecom nobody showed willingness to obtain the license for the right of provision of services of the fixed international telephone communication. In it rather small amount of the market of services of the fixed telephone communication and that fact that demand for these services is reduced played a role - this segment of the market is in a saturation stage. Users of communication services are attracted more by new technologies and services, including the IP telephony.

The government decree of Moldova which set in 2004 the price in $2 million for the license for the international fixed connection became invalid after commissioning in 2007 for the new law on electronic communications and implementation of the so-called mode of the general permission and licensing. Implementation of the mode of the general permission cancelled licenses for a type of activity. Persons interested to provide any services of telecommunication notify NAREKIT on the intentions and obtain licenses for right to use for this purpose of limited state resources, such as resources of a radio frequency spectrum and resources of numbering. According to the management program for a radio frequency spectrum for 2013-2020 approved by the government in January, 2013, licenses for right to use of radio-frequency resources will be granted on a competitive basis.

2010: Bankruptcy of Eventis Mobile SRL

In February, 2010 the third GSM operator in Moldova – the company with the Russian roots Eventis Mobile SRL stopped the activity. Till 2013 Eventis Mobile was in process of bankruptcy.

From an interview of the minister of information technologies and communication of the Republic of Moldova Pavel Filip (April, 2013)^[3]:

- After adoption of the relevant judgment its license will be revoked. The license for right to use of a radio-frequency resource - 2x7.4 MHz - radio frequency bands 900 MHz, the appropriated Eventis Mobile according to the license GSM, will be exposed on tender along with other resource from this radio frequency band. On an open competition in the form of an auction which will take place in March, 2014 according to the management program for a radio frequency spectrum for 2013-2020, licenses for right to use of radio-frequency resources in frequency bands 800, 900 and 1800 MHz will be exposed.

2012: New hopes of the authorities for Moldtelecom privatization

Attempts of privatization of Moldtelecom company were made in the 1997th, 2000th, 2003rd and 2008. In July, 2012 the government of Moldova added Moldtelecom to the object list, privatizeable.

2013: The time license for Orange Moldova

NAREKIT issued the time GSM license of Orange Moldova company in March, 2013.

From an interview of the minister of information technologies and communication of the Republic of Moldova Pavel Filip (April, 2013):

- According to the management program for a radio frequency spectrum on 2013-2020, NAREKIT issued Orange Moldova companies on its request the time license for a period of 20 months with the providing right only of services of GSM (2G), without the application right to this period of the principle of technology neutrality, saving all volume of radio-frequency resources in frequency bands 900 MHz and 1800 MHz which was used by Orange Moldova according to conditions of licenses for a type of activity "Provision of services of mobile cellular telephone communication in the GSM (2G) standard". Issue of this license was caused by payment in the state budget of licensing fee in the amount of 1.786 million euros. Licenses for a type of activity "Provision of services of mobile cellular telephone communication in the GSM standard" were granted to Orange Moldova and Moldcell companies according to the legislation and regulating documents existing before entry into force of provisions of the law on electronic communications, in particular the mode of the general permission and licensing (9/15/2008). These licenses were granted for a period of 15 years.

In view of historical premises and also considering that validity period of the license Orange Moldova expired on March 06, 2013, and the licenses Moldcell will expire on November 05, 2014, it was necessary to provide measures for synchronization of the expiration of validity periods of these licenses, anticipating the procedure of providing the right to use a radio frequency spectrum in the conditions of the mode of the general permission and licensing. After expiration of the licenses for a type of activity granted in due time to Orange Moldova and Moldcell companies licenses for right to use of radio-frequency resources for the purpose of providing networks and services of mobile electronic communications with the right of use of technology neutrality will be granted on a competitive basis. Synchronization of the expiration of validity periods of these licenses needed to be made also of reasons of providing equal competitive conditions in the market of services of mobile communications.

The innovation services

Mobile signature

In February, 2013 the government of the Republic of Moldova received the award Best mGovernment for the Mobile Signature project from the World association GSM (GSMA). The award Best mGovernment for the best achievement of the government in the field of mobile communication is awarded to the government of Moldova by the international organization of GSMA for the Mobile Signature project within the World congress of operators of mobile telephone communication which passed in February, 2013 in Barcelona.

This electronic service was developed within public and private partnership between the government of the Republic of Moldova, the Center of electronic control, the Center of special telecommunications and operators of mobile telephone communication and started on September 14, 2012. Using "The mobile signature" citizens have an opportunity to become authorized in virtual space and to sign at distance the documents, reports, statements and declarations submitted to different organizations.

It is possible to receive "The mobile signature" absolutely free of charge until the end of 2013, having addressed operators of mobile telephone communication Moldcell and Orange. To be connected to this service, it is enough to citizens to have at itself only the identity certificate. The service "The mobile signature" is available also to the citizens staying abroad. Applying "The mobile signature", they have now an opportunity to use services which could receive earlier, only being in the territory of Moldova.

Using "The mobile signature" citizens have also an opportunity to be authenticated on the portal of the public electronic services www.servicii.gov.md by means of the MPass system (https://mpass.gov.md).

In March, 2013 the electronic declaration about income tax for individuals was integrated into service "The mobile signature". Thus, taxpayers have an opportunity to fill and submit declarations on the paid income tax online. Further it is going to expand the list of the electronic services available online by means of "The mobile signature". It is remarkable that the Republic of Moldova is included into the seven of the countries of the world applying the mobile signature.

Universal communication services

According to the law on electronic communications, access to universal service of communication represents the right of all residents of the Republic of Moldova to use the minimum set of services of electronic communications of a certain quality level and at the affordable prices, irrespective of their geographical location.

Are included in the minimum set of universal communication services:

• access to networks of public electronic communications in the fixed point;
• service of information on subscribers and providing registers of subscribers;
• the access to paid public phones including free access to services of the emergency help.

For April, 2013 the Ministry of information technologies and communications develops the national program of implementation of universal service for 2013-2020. For financing and compensation to suppliers of universal service of net costs the fund of universal service managed by the Agency is created. The fund forms from compulsory contributions of suppliers of networks and/or services of electronic communications and from other means permitted by the law. Means of this fund are used only for compensation of net costs in the line of duty of providing universal service.

Suppliers of networks and services of electronic communications are obliged to perform contributions to fund of universal service in the amount of, not exceeding 1% of annual volume of income gained from provision of services and/or networks of electronic communications.

For April, 2013 any of suppliers of networks and services of electronic communications does not render service from a packet of universal communication services according to provisions of the law on electronic communications.

Strategy "Digital Moldova 2020"

Within ICT of Summit 2013 which took place in Chisinau on April 16-17 strategy Digital Moldova 2020 was for the first time provided - it is the document describing politicians designed to provide system and predictable development of the country, to define the opportunities represented by information society for comfort and welfare of citizens. The national development strategy of information society "Digital Moldova 2020" is designed to provide system and predictable development of the country, based on the principles designated in "The digital agenda for Europe 2020".

The purpose of strategy consists in creating favorable conditions for development and wide use of potential of the information and communication technologies (ICT) by public organizations, the business environment and citizens at the minimum intervention of the state, but with the maximum effect, having concentrated efforts on three main areas: infrastructure and access; digital maintenance and electronic services; opportunities and use.

It is supposed that thanks to successful implementation of problems of strategy, in 2020 the Republic of Moldova will become the country with the developed information society in which use of the opportunities given by information and communication technologies, expanded access to modern infrastructure of electronic communications, the various digital contents and progressive information services will influence growth of quality of management process, increase in economic competitiveness and ensuring welfare of the population.

Notes