Oaca: Could you introduce us to the Albanian telecom market?
Xhixho: The Albanian telecommunications market has four mobile operators, ALBtelecom, Plus Communication, Telekom Albania and Vodafone Albania, operating 2G, 3G, and 4G networks, as well as more than 100 fixed network operators covering most of our country. Our 3G/4G network covers 73/85 percent of our territory and over 90 percent of the population. By the end of 2016, Albania had 3.4 million active SIMs, out of which 92 percent were post-paid.
The number of active users of mobile broadband access services (3G/4G from mobile devices and USB/modem cards) increased 30 percent to 1.7 million in 2016 compared to 2015. The total number of phone calls generated by mobile users during 2016 decreased 8 percent compared to 2015, while the number of SMSs experienced a modest increase of 1 percent, mainly due to OTT applications on the mobile phone.
During 2016, a mobile user consumed 1.48 GB, a 68 percent increase compared to 2015. Meanwhile, in 2016, a mobile user (using the Internet at least once a year) averaged 954 MB per month compared to 541 MB in 2015.
The number of fixed telephony subscribers has been on a downward trend from 2012 to 2015, while 2016 saw an increase in the number of landline telephony lines to 248,000, an 8.8 percent penetration rate. Fixed telephony services in Albania are provided by more than 100 entrepreneurs who own their networks, including access or direct access networks to end-users. Fixed broadband access has grown steadily in recent years; the penetration rate for the population and households by the end of 2016 was 9.3 percent and 33.4 percent, respectively. By the end of 2016, the number of subscribers buying triple play packages (telephony, Internet and TV) increased about 25 percent to 187,000.
Despite the large drop in net profits, the total level of investment in mobile networks has not been significantly reduced. Even providers have made large investments in non-tangible assets such as frequency licenses of 900/1800 MHz to provide services on 3G/4G networks. The total value of investments in mobile networks was 4.78 billion leke (36 million €) in 2015.
Oaca: What about the use of mobile broadband?
Xhixho: Mobile broadband business services are improving in quality, in terms of both speed, 100Mb/s and coverage, including 73/85 percent of territory andover 90 percent of the population.
3G/4G mobile penetration in the population by the end of 2016 reached 60 percent compared to 46 percent at the end of 2015. In 2014, the annual growth of data traffic on mobile networks was 148 percent, and this trend continued in 2015 and 2016, with annual growth of 103 percent and 110 percent, respectively. In the period 2013-2016, the volume of Internet access data in mobile networks increased over 10 times.
Our periodic measurements show that average download speeds are improving:
- On the coast, 3G networks range from 4 to 7 Mbps, 4G networks from 8 Mbps to 20 Mbps.
- In cities, 3G ranges from 6 Mbps to 10 Mbps, 4G ranges from 8.5 to 20 Mbps.
- On the main roads, the average speed for 3G is 3.6 Mbps.
Oaca: Can you tell us about better use of the telecommunications infrastructure?
Xhixho: The law “On the development of high speed electronic communications networks to ensure the right of way,” aims to facilitate and encourage the provision/ construction of electronic communications networks for high speed, by promoting the joint use of existing infrastructure as well as a more efficient development of new infrastructure by reducing construction costs of high-speed networks.
To promote joint use of passive infrastructure in 2016, we approved the “Rules for the use of common facilities.” Some of the regulatory measures for the joint use of infrastructure assets (bitstream, leased lines) and passive (pipes) of fixed networks have begun to have an effect in 2016, during which there was an increased use of shared infrastructures. During 2016, a major improvement of cable network infrastructures was achieved in the main Albanian cities where electronic communications cable networks were avoided from energy cable networks and most of the main roads and centers have already been completed or are about to be completed. With the investment and attention paid to this problem, we anticipate that in 2017 and 2018 this important problem will be solved.
AKEP has nominated zones with low population density to be covered with broadband services and zones for improving. Stakeholders have submitted to AKEP cooperation agreements for co-investing in low population density zones to cover them with broadband services and for improving QoS in other areas.
In the coming years we will have to focus on the coordination of the work of the local authorities, with the providers of electronic communications, in order to rationalize and increase the investments’ effectiveness.
During 2017, with the assistance of ITU we are upgrading the existing digital platform of the networks to bring them to a higher level of information. In order to inform providers, AKEP created a page on our web site where all municipalities, as well as the Development Fund, have posted their investment plans.
Oaca: What are your challenges and medium-term plans?
Xhixho: In the medium term, we hope Albania will become a member of the European Union, and AKEP will play an important role: to put our telecommunications in line with the EU requirements, and our market to be part of the EU’s unique market.
Stable and predictable rules are very important for market development, so we are thinking about a medium-term strategy to attract investments, to protect end-users, and to better use scarce resources. I strongly believe in the driving role of IT&C in accelerating Albania’s economic growth, in its digital transformation, and we are looking to be an independent, proactive and market oriented regulator aiming at connecting our country to high-speed networks, to stimulate economic development and digital transformation.
We have to act on both sides for Internet adoption: on the supply side, by stimulating high-speed network deployment, and on the demand side, by increasing Internt usage for a digital Albania.
We have to look to the rural areas to reduce the gap and to increase coverage, competiton and adoption. This requires coordination with local authorities and investors, a clear and fast procedure, and a single coordinative system standard in collecting information for mapping infrastructures.
Balancing investments and competition is the key success factor in developing national broadband networks and providing modern and cheaper services to our citizens, businesses and administration, to reduce the digital divide. Effective spectrum management and the use of frequency bands that enable higher transmission capacity for 4G services and the provision of 5G services as quickly as possible (2020, for instance) could be a key factor in this process. Very soon spectrum auctioning for 5G technology could help us build high-speed mobile networks for a digital Albania.