National Regulatory Agency for Electronic Communications and Information Technology of the Republic of Moldova

In 2009, The National Regulatory Agency for Electronic Communications and Information Technologies (ANRCETI - www.anrceti.md) continued to adjust the regulatory framework to EU norms, to implement the clauses of the new Law on Electronic Communications in order to remove the barriers to network and service provision, to promotion of competition and protection of end users. It was the message delivered by the Agency Director, Sergiu Sitnic, in a press conference on April 20, dedicated to the presentation of ANRCETI annual Report on activity and evolution of electronic communications market in the previous year.

With reference to the first part of the report, which includes the Agency's core activities, Sitnic said that in 2009 the institution started two works of particular importance to furthering the development of communications markets, particularly the broadband Internet access market, which will be continued in 2010. The first refers to liberalization of access to cross-border global Internet traffic, a process that will lead to lower prices and better quality of broadband services for end users. The second work is related with the analysis of 10 relevant markets for the purpose of assessing the degree of competition and determining the operators with significant market power on those markets. In accomplishing these tasks the Agency is assisted by foreign EBRD experts.

Sergiu Sitnic stated that after determining the operators with significant market power on relevant markets the Agency will impose special ex-ante obligations meant to enhance competition on these markets. He noted that the Agency intends to complete this work by the end of this year. Sitnic said a priority for the Agency in 2010 will be to monitor compliance by providers with quality parameters of public electronic communications services, established in 2009 by an Administrative Board Decision, and their obligations listed in the Guide for providers of public electronic communications services on end users’ rights protection, approved by the Board in 2009.

The second part of the Report contains the analysis of key indicators of the four markets monitored by the Agency - fixed, mobile, Internet access, broadcasting and retransmission of audiovisual programs, the Agency's findings and forecasts on the development of these markets in 2010. With reference to changing communications market in 2009, Sitnic said that the sector, compared with other economy sectors, was less affected by the economic recession. Given the reduction of Background reduction of gross domestic product (GDP) of the country by 6,5%, in 2009, the sales for the four electronic communications markets slightly decreased - by 1,7% and constituted 5 billion 630,1 million lei. In relation to the last year GDP value, the sales volume made up 9,4%. The Agency explains the decrease by sales reducing on the fixed telephony market, broadcasting and re-transmission of audiovisual programs market, by a slower pace of mobile market development. This indicator grew by 4% and amounted to 3 billion 033,6 million lei. The most significant increase was recorded on the Internet access market. The value of this market increased by 19,2% and reached to 436,4 million lei.

Though the sales trend on the four electronic communications market differed, in 2009, the number of users was ascending, their number reaching 4 million 353 thousand, which is 10,7% over 2008. More than 64% of the total number of beneficiaries of electronic communications services are mobile users, 26,1% - fixed telephony users, 4,7% - Internet access users and 5,2% - cable TV users. The mobile penetration rate, per 100 residents, increased to 78,1%, the fixed one – to 31,7%, the Internet access penetration rate – to 5,7% and cable TV – to 6,34%.

In 2010 the Agency expects a 5 - 8% increase in the value of electronic communications market. This estimation is based on the signs of market growth, shaped in the second semester of 2009, which fact enabled recovery of some of the declines recorded in the first semester. The broadband Internet access market is expected to undergo the most dynamic growth. According to the Agency’s estimations, the number of subscribers to these services will increase by 45% and will reach 270 thousand. The highest growth rate in the number of Internet users will be recorded in the districts of the country, where their numbers could double. At the same time, the number of broadband mobile service users will increase by 80%. The Agency believes that the broadband Internet access market still has significant room for rapid growth, particularly through the implementation of converged data, voice, video and mobile technologies.

The same estimations show that in 2010 the mobile market is expected to undergo the most significant growth. The number of users will increase by about 12% and will exceed the 3 million. The penetration of mobile services will reach 86 - 88%. The fixed telephony market will be relatively unchanged, the maximum number of subscribers will increase by 1.5%, and the penetration of these services will be closer to 32%. The market for broadcast and retransmission of audiovisual programs will be subject to dynamic growth driven by wider use of digital multi-channel television service, such as digital cable TV, IPTV, DTH.

According to the Law on Electronic Communications, the Agency, annually by April 30, publishes report on its activities and developments in the electronic communications markets in the previous year. It has been due practice since 2003. The reports are available on the agency Internet page: www.anrceti.md.

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April 20, 2010