12 Jan 2012Latvia Broadband Overview

The liberalisation of the telecommunications sector in Latvia started in 2003, when the incumbent Lattelecom lost its monopoly in the fixed telecommunications market. The market is now open to competition but Lattelecom still has a large market share, and it has been attempting to further increase this share through acquisitions. In summer 2007, the operator spent more than LVL 10 million (EUR 14 million) on the purchase of small ISPs. However, in the same year the Internet market saw the entry of mobile operators. They pose a significant competitive threat to the incumbent, especially as around 40 per cent of Latvian households use exclusively mobile communications.

In 2009 broadband penetration growth slowed down. This followed a promising increase during 2007, but in the later years the growth fell mainly due to the economic downturn. Despite continuing recession however, unlike other industries, the telecoms sector is expected to do relatively well due to the increasing demand for connectivity.

Nevertheless, during 2010 the turnover in the electronic communications sector has decreased by 7 per cent. The revenues of the sector have been affected substantially by market competition and the regulatory decisions which directly influenced telephony tariffs and revenues from interconnection services.

Broadband services are widely available in Latvia, especially in urban areas. In fact they account for almost all Internet subscriptions. In mid-2010, the country ranked second in the world and first in Europe in terms of the average broadband download speeds. According to the Broadband Quality Study 2009 (BQS), Latvia joined the countries which have the broadband quality required for future web applications such as high definition Internet TV and high quality video communications. However, broadband quality and availability is much higher in the capital city Riga and other major cities compared with rural areas where it is poor or non-existent. In fact, Latvia is among the countries with the widest digital divide.