Belarusian Internet access market in 2009

Author: Mikhail Doroshevich

24/12/2009

Belarusian Internet access penetration made a leap, thanks to external channel's (which belongs to the ste-owned telcom Beltelecom) width increase from 5,2 Gbit/s to 22 Gbit/s, new possibilities and significant decline in prices. A serious question of demonopolization of the Internet access market was raised, and a possibility of Beltelecom losing it's monopoly on the international channel access. This week, ADSL-provider ByFly (a daughter enterprise of Beltelecom with 350,000 subscribers) significantly lowered it's prices. Ministry of communications and informatisation plans that there will be 585,5 thousands of broadband users at the end of 2009.

At the beginning of the 2009, Beltelecom still regulated the market and was the biggest player in the Belarusian ADSL Internet access market. The monopolist was taking over other providers' userbase and lowering their profitability by manipulating prices on the international channel access. In spring, privately owned Internet providers appealed to the Ministry of Communications and Informatisation and asked to look into the situation. The Ministry was forced to begin negotiations.

Committee of state control is performing a full-scale inspection of the Ministry and Beltelecom. There are rumors about creation of alternative international Internet operator. High-Tech park is the main contender on the channel. At the same time on 29th of September the government makes changes to the plan of state property objects privatisation for 2008-2010. By the addendum, Beltelecom must be included in the list of enterprises due for privatisation in 2009. On the "Business Internet" on 16th of October chairman of board of "Belinfocom" association Andrei Nareiko confirms that "this question will be looked into on the government meeting soon". Specific date was announced - within a week. But the prime minister went on a vacation in a few days, and no more information about the possible meeting was released.

In the middle of December a version of the draft of the law appears, which was developed, most likely, in the Operative and Analytical center under President, in which under the pretense of increasing and unifying functions of control over the net an attempt is made to take away monopole rights of Beltelecom on the channel, as well deprive Ministry of Communications of supervising functions. Gravity of their intent is confirmed by proximity to the highest form of government inf the country, while publication of the document can be explained by an attempt to check the market's and society's reaction. Providers' opinion is that the project is still "raw", but it's sole appearance screams about plans of the market's reorganisation.

Other significant events ensued. On the 28th of May, "Atlant Telecom" announced that it overtakes "Server Telecom" Gomel provider. In the same day, a ban on the private providers Ethernet networks was lifted. On the stationary access market, further unification and growth of players and leave of the larger providers for Ethernet networks.

Digital illiteracy is becoming a possible major deterrent. By Ministry of Communications plans, there will be over 1,8 users of broadband access at the end of 2010.

3G and 4G may become full-scale competitors of the stationary Internet access. But that won't happen before an alternative provider appears on the mobile Internet access market, or prices fall. Life:) will be able to deploy a quality national network and find enough subscribers no earlier that summer 2010, and it's not likely that other operators will be able to launch their own 3G networks before that. From the 1st of January Beltelecom introduces WiMAX network in Minsk. The only possible competitor Yota will begin construction of it's own network in the capital only to the end of the year.

A potential problem of 2010 in case of further increase in demand and quick growth of the external channel maybe be insufficiet data transfer ability of the main communication lines.

Liberalisation of the market and privatisation of Beltelecom depends mainly on economical results of our country in the next year. It's unlikely the government will decide to sell the telecom giant without a solid reason.

Useful links:

Рынок доступа в интернет. Итоги года
The Ministry of Communications and Informatization of the Republic of Belarus
Beltelecom
life:-)
Atlant Telecom

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