The political instability and outbreaks of civil unrest that erupted in Timor Leste (formerly East Timor) in April/May 2006 continued into the first half of 2007. Despite the election of a new government led by Nobel Peace Laureate Jose Ramos Horta in May/June 2007 opposition to the administration caused further outbreaks of violence and looting. To the outside observer, the country appeared to have started reasonably well in rebuilding its entire infrastructure following the turbulence that ensued after the referendum of 1999. However, the events of 2006/07 caused major concerns about the direction of the Timor Leste; it remained difficult to assess the long term impact of these events on the country’s fragile economy and the process of infrastructure building.

Then, in February 2008 President Ramos Horta was shot and severely wounded in an attack led by rebel Alfredo Reinado (who was allegedly involved in the unrest of April/May 2006). A short time later a convoy including Prime Minister Gusmao was fired upon. The Prime Minister was uninjured. Responding to the attacks, the government declared a state of emergency. President Ramos-Horta returned in April 2008, after receiving medical treatment in Australia. The state of emergency ended in May 2008, following the surrender of most of the rebels.

In the meantime, throughout this difficult political period, the country’s mobile sector was experiencing strong growth (over 50% in 2006; just on 50% in 2007), with mobile penetration reaching a low, but nonetheless significant, 7% milestone by end-2007. Fixed-line network expansion was generally languishing coming into 2008, with teledensity down around 0.3%. Although it was difficult to get accurate figures on the Internet market, it was evident that growth in this sector remained constricted and there was little optimism about online activity in the short term.

It is noted that Timor Leste has finally been listed as a member of the ITU. While the ITU does provide some information on this market, it has continued to be a difficult task to obtain official statistics for the country’s telecom sector. Where official statistics are not available, BuddeComm will normally provide an estimate.

Key highlights:

• The year 2007 again proved positive for Timor Leste’s mobile market, with growth surging by almost 50% for the second consecutive year; penetration had reached 7% by early 2008.
• On the broader scene, however, the ongoing political and civil unrest in the country continued into 2008 and was a major distraction for government, providing a serious disruption to development programs and infrastructure building.

BuddeComm just published a new report titled: 2008 Asia - Telecoms, Mobile and Broadband in Indonesia and Timor Leste. Note: Coverage provided of Timor Leste’s telecoms market is relatively limited due to its early development stage.