Belarus government encouraged to retain control of incumbent Beltelecom following FttH investment
Belarus’s Ministry of Communications guides the country’s FttH deployment within the framework of the state programme for 2011-2015. Under this programme, the incumbent telco Beltelecom is building a GPON FttH network which by early 2012 was available to about 90,000 subscribers. Some 3,520km of cabling has been built thus far, and this is set to increase rapidly since FttH infrastructure has become the key driver of the company’s increased capex.
Beltelecom’s investments over recent years, amounting to several billion rubles, has affected the government’s thinking on privatisation. Plans to privatise Beltelecom, initiated as part of the country’s bid to join the World Trade Organisation (Belarus remains an observer, not a member) have been raised repeatedly. In late 2008 the government promised to privatise its remaining 51% stake in Beltelecom, and it duly set an auction date for the end of 2011, with an asking price of US$1 billion. The front-runner, MTS Russia, whose subsidiary MTS Belarus is the largest mobile network operator in the country, expressed an interest but baulked at the asking price. Its subsequent withdrawal dismantled any hope for a successful auction, which was cancelled soon afterwards.
In mid-2011 the government announced that it no longer had any intention of selling its interest in the telco, though numerous other state enterprises have been sold off as the state releases its inherited grip on economic control, introducing competition and investment.
Beltelecom’s FttH infrastructure is now considered too great an asset. It is through this infrastructure that the government is building its 2011-2015 programme, so allowing it to developing e-government, e-health and e-learning initiatives, among others. The government proposes to invest up to BR3 trillion in the programme, for which Beltelecom is the anchor.
Progress is palpable: the UN recently ranked Belarus 48th on its e-government development index (in terms of telecoms infrastructure), compared to 84th in 2008. The index is a composite comprising three indicators: the extent and quality of online services, the development of telecoms infrastructure, and human capital.
It is clear that Belarus views the developing FttH network as a national infrastructure project, from which other socio-economic benefits derive, and not simply as a telecom backbone. Although state control of incumbent telcos is anathema within Europe, it may be that with the current government philosophy the further advanced Beltelecom’s FttH network develops the less likely it is that the company will be sold off.
Henry Lancaster,
Senior Analyst
For more analysis on Belarus’s telecom sector, see the updated report Belarus – Telecoms, IP Networks, Digital Media and Forecasts.
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