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Mobile phone market surges

  • 2001-11-29
  • Bryan Bradley
VILNIUS - Lithuania's mobile telecommunication market should grow by at least 40 percent in 2002, with mobiles outnumbering fixed-line phones by mid-year, the leading mobile phone operator Omnitel predicts.

Omnitel, which is jointly controlled by Sweden's Telia and Finland's Sonera, overtook Estonia's EMT and Latvia's LMT this year to become the largest mobile telecommunication firm in the Baltics, Omnitel President Antanas Zabulis said on Nov. 23.

The company expects its subscriber base to grow to over 800,000 in 2002 from an estimated 550,000 at the end of this year.

Its closest rival, the Danish TDC Group's Bite GSM, now has some 250,000 users. Sweden's Tele2 meanwhile is estimated to have garnered nearly 100,000 subscribers during its first year in Lithuania.

Last December Tele2 won a tender for the country's third and final global system for mobile communication license.

Analysts say Tele2's aggressive entrance pushed market penetration over the key 20 percent level, after which growth of mobile users tends to surge.

Mobile phone penetration in Lithuania increased from 15 percent in 2000 to 25 percent at the end of this year. Omnitel predicts the level could exceed 40 percent by late 2002.

"The more mobile numbers there are the more convenient and economically attractive it gets for people to have a mobile phone," noted Juozas Kazickas, who founded Omnitel - then named Litcom - in 1991 and still holds a minority stake.

He also attributed the maturing market to Lithuania's steadily improving economic situation and a craze for mobile phones among the country's youth.

According to Zabulis, skyrocketing demand is forcing operators to invest more in beefing up network capacity.

"Our own investments over the past decade total more than $1 billion," he said. "They have averaged $20 million to $30 million per year recently and nearly $40 million in 2001. Next year's investment plans are significantly larger."