BY ANUSH A. HOVSEPYAN
How often do you use Skype or Viber to connect with your family and friends in Armenia? We are a nation with a large diaspora, and telecommunications is the only way sometimes to stay connected with people close to us. Based on Ameria’s recent research on Armenia’s telecommunication services, video calls are among the three most frequent activities on the Internet for Yerevan’s population (50%), followed by social and dating websites and music/movie downloads.
Ameria’s Management Advisory Services’ (MAS) latest research is laser focused on Armenia’s telecom industry. The research covers cable TV services, cellular and landline services, Internet access services and the use of corresponding devices (cell phones, laptops, tablets, TV sets, etc.) in Yerevan. The study gives insights into the current state of the telecommunication industry in Armenia and history of its development. It also provides analysis of the key market players and forecasts the market development trends. The findings allow assessing the potential of Armenia’s telecommunication market. Results of the research have revealed that the recent economic crisis did not impact Armenia’s telecommunications sector much. In fact, in 2013, the revenue of telecom industry increased by 7% compared to the level of 2008. Cellphones accounted for 64% of the earnings, Internet for 17% and landline for 13% in 2013.
Cable Television in Armenia
Yes, Armenians still love local TV programs, considering them the main source of information and entertainment.
According to the study, cable television services are one of the most rapidly developing markets in Armenia’s telecommunication industry. Here is some supporting data on that. The revenues from cable TV have grown four times in 2010-2013. According to Ameria’s projections in the research, the number of cable TV subscribers in Yerevan alone is going to increase by 38,000 in the coming years. 43.3% of households in Yerevan pay for TV services, while 53.5% of households in Yerevan use analog TV only.
What is happening with landlines and cellphones in the country? Wire telephony is still in demand in Yerevan. 98.4% of the population of 15-69 year olds uses landline telephones, from which 68.7% uses landline telephone daily. Cellular services in Armenia have undergone four stages: development in 2004-2005, rapid growth in 2006-2008, fall in 2009 and stabilization in 2009-2013.
The cellular services market in Armenia is dominated by the “rule of three and four,” meaning it is a stable competitive market in which the largest competitor’s share is about three or four times higher than the market share of the runner-up. As of 2013, the biggest player in Armenia’s cellular phone services market is Viva Cell-MTS (65.8% share of the market), followed by Beeline (20.2 % market share) and Orange (14.1% market share).
Internet Service Providers in Armenia and Computer Use
In the broadband Internet retail market the major players of Armenia, according to their subscriber base, are Beeline (41%), Orange (21%), Viva Cell-MTS (21%) and Ucom (11%). The survey showed that about 55% of households have only one computer in Yerevan and only 8.5% have a computer, a laptop and a tablet at the same time. Video calls, which are among the three most frequent activities on the Internet for the Yerevan-based population (50%), produce a serious substitution effect in relation to the traditional telecom services.
Money Is in Armenia’s Cable Television and Internet Access
If you are considering investing in Armenia’s emerging telecommunication market, research shows that cable television and Internet access have the highest potential for development. According to the forecasts of Ameria’s experts, Internet services will dominate over the traditional telecommunications services (fixed line and cellular) in the coming years.
Capitalizing on the Benefits of Emerging Markets
Emerging markets lack proper research, however offer hidden opportunities for investment. Having decided to move into an emerging market, proper solution to the problem is to find the right business partner.
Market entry research can help you to mitigate risks and ensure high return on investments. Ameria Group of companies, Armenia’s premier advisory and financial services provider, has been connecting foreign investors to promising business opportunities in Armenia’s emerging markets. The company itself serves as an example of dynamic growth possible in Armenia’s emerging market, with more than $800 million in assets. Ameria is a world-class advisory firm with international coverage specialized in legal, management and investment advisory services.
Readers can download the brief version of the study at www.ameriagroupinc.com.