TATT Releases Annual Market Report

TATT Bytes

 December 2012

TATT releases Annual Market Report
Internet up, fixed-line phones down and mobile still strong


Market Share

In 2011, the mobile telephony market continued to dominate the telecommunications and broadcasting sectors as the top earner, generating 44.6 percent of sector revenue, well ahead of the second highest contributor (fixed telephony) at 16.7 percent. This and a host of other compelling data were revealed in TATT's 2011 Annual Market Report.

Titled "Annual Market Report: Telecommunications and Broadcasting Sectors, January-December 2011," the report gives a yearly, comprehensive look at the markets that include data on subscriptions, gross revenues and traffic of the relevant markets. TATT has been collecting and releasing annual market data since 2006.

The 2011 Annual Market Report shows that despite its preeminent position, there was a slight decline in mobile voice subscriptions, as compared to 2010, going from 1.89 million to 1.83 million. However, gross revenue from mobile voice services increased from $1,956 billion in 2010 to $2,103 billion in 2011. This is a substantial chunk of the combined telecommunications and broadcasting sectors' earnings of $4.7 billion for the year.

"We noticed in the mobile sector a slight drop in subscriptions," explained Mr. Cris Seecheran, Chief Executive Officer (CEO) of TATT. "It went from 143 percent to 138 percent, which is more than 100 percent, meaning that many people have more than one phone. This is still quite high so we don't consider the decrease that significant."

In addition, the report showed an increase in postpaid subscriptions and a decrease in prepaid subscriptions. There was also a higher prepaid to postpaid migration during that period.

Telecommunications and Broadcasting's bigger boost to GDP

In total, the sectors contributed $4.7 billion (US$737.3 million) to the gross domestic product (GDP) of Trinidad and Tobago in 2011. This represents 3.3 percent of GDP and is a 5.0 percent increase over the reported 2010 revenues. This improvement is in line with TATT's projections for the sectors and is a symbol of progress-but TATT is seeking even further growth.

Mr. Seecheran explained: "this increased contribution to GDP is expected. It is part of TATT's strategy to implement measures that increase sector contribution. However, there can be even faster growth and we are working towards this."

One of the consistent areas of steady growth in telecommunications is the Internet market. In 2011, Internet made up 14.4 percent of total revenue contribution to the sector-some $677.2 million. Since 2007, Internet revenue has steadily increased, rising from $294.8 million to the 2011 total over the fiveyear period. This mirrors the dramatic rise of both fixed-line Internet subscriptions and mobile subscriptions with Internet access. There were over 192,000 fixed Internet subscriptions and 133,000 mobile subscriptions with Internet subscriptions. In 2007, the numbers were 83,000 and 11,000 respectively.

"We have over 50 percent Internet penetration in households and this is not counting mobile," the TATT CEO said. "We are not doing badly in this area. This is the area that TATT is focusing a lot of its energies on growing-the Internet space, access to the Internet and access to broadband (high-speed Internet)."

Slight declines in fixed telephony, radio and TV

Though the overall picture is one of sectors in growth, some markets showed slight decline. Although fixedline telephony is the second highest contributor to the sectors' revenues, the market has shown a minimal but relatively consistent

  Mobile voice, fixed, internet

decrease between 2006 and 2011. The 2010 fixed-line penetration figure was 22.3 percent while for 2011 it was 22.0 percent. In 2006 it was 25.1 percent. TATT attributes this decline to the shift to mobile devices and sees it as "not hugely significant."

Both free-to-air television and free-to- air radio saw slight declines, with TV revenues slipping from $132.1 million in 2010 to $109.2 million in 2011 and radio going from $166.9 million in 2010 to $161.5 million in 2011. This is attributed to increased advertising income in 2010 due to the national elections as Mr. Seecheran explains:

"There was a drop in radio and TV revenues but that's because 2010 was an election year, so there was a lot more advertising."

Overall, the 2011 Annual Market Report contained few surprises for TATT and painted a picture of the sectors performing well-if perhaps a little conservatively in certain markets.

"What we look for is if there are any aberrations, if there are any significant declines in a market, something that will upset a particular trend. Of course we want revenues to continue to increase and for the market to perform well. We saw some minor declines, which we had anticipated," Mr. Seecheran said.

4G a potentially significant factor in 2012

The TATT CEO said the recent offering of fourth generation (4G) mobile services by Trinidad and Tobago's two mobile providers could spark a substantial increase in mobile Internet services which $0 $500 $1000 $1500 $2000 $2500 will be reflected in the 2012 Annual Market Report. Coupled with the scope of the mobile market and the popularity of smartphone devices, TATT believes 4G will be a potentially significant market factor.

TATT's quarterly market updates and the Annual Market Report are published to provide stakeholders, policymakers, academics, sector specialists and the general public with up-to-date information on the sectors' market performance. Information is gathered primarily from the operators in the broadcasting and telecommunications sectors as well as historical data.

Gross revenues from mobile voice services increased from $1,956 billion in 2010 to $2,103 billion in 2011. This is a substantial chunk of the combined telecommunications and broadcasting sectors' earnings of $4.7 billion for the year.