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Belarus government again initiates sale of its 51% stake in Beltelecom
Wednesday, September 21, 2016 4:50:19 AM America/New_York
Belarus experienced strong economic growth during the first years of the century, though this stalled during the financial crisis of 2008 and 2010. In recent years growth has fallen sharply, and was expected to be negative for 2015 as the country feels the continuing effects of economic difficulties experienced by its main trading partners Ukraine and Russia. Although inflation has been brought down to more manageable levels since the hyper-inflationary year of 2011, when inflation reached 109%; inflation during 2015 has been running at about 20% while the value of the rouble has fallen in relation to other currencies, including the Euro. This has impacted operator revenue, particular for the subsidiaries of Turkcell and Telecom Austria. The ongoing economic difficulties have also reduced customer spend, contributing to lower revenue and investment.
Nevertheless, there remain many opportunities for growth in coming years, particularly in broadband segment where penetration is relatively low. Although the sector has been reformed in recent years, restructuring has not yet resulted in the privatisation of the incumbent Beltelecom, which has invested substantially in infrastructure and technologies. Although the government is keen to control these assets, there is greater pressure for it to sell state enterprises in a bid to reduce overall debt. Growth for Beltelecom is expected to be particularly strong in the FttP sector, where much of the company’s capex is directed.
The mobile sector has experienced the strongest growth in telecoms, with a rapid rise in mobile penetration attributed to effective competition. Operators have concentrated on developing mobile broadband and data services with a view to capitalising on such services to increase ARPU. Recent spectrum auctions have facilitated the development of mobile broadband access, particularly in rural areas.
In early 2015 the government decreed that the 1.5% tax on revenue derived from telcos (which was put in place in 2007) should be channelled to developing telecom universe services, particularly aimed at rural areas.
Although the government has repeatedly failed to sell its 51% stake in MTS, with no bids having being filed during an attempt made in 2014, in October 2015 the sale was again put on the table. As before, the sale is largely motivated by financial considerations as the government strives to reduce debt.
For more information see - Belarus - Telecoms, Mobile, Broadband and Digital Media - Statistics and Analyses