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Luxembourg's Telecom revenue remains stable thanks to strong broadband sector 28 Nov 2014
Luxembourg has one of the smallest telecom markets in Europe, greatly supported by an influx of workers and migrants from larger neighbouring countries. Luxembourg City is also one of the political centres of the European Union, and so attracts affluent migrant employees.
Overall revenue from electronic communications services bucked the downward trend seen in many other European markets, growing slightly in 2012 with similar growth anticipated into 2014. Much of this growth is due to the strong mobile services sector while revenue from fixed-line telephony continued to fall. Steady growth is expected during the next few years at least as the Duchy’s upgraded network infrastructure attracts international interest from companies seeking high-end connectivity.
Total investment in fixed-line infrastructure has also risen steadily, and is expected to continue to do so for the next five year as operators migrate from copper to FttP and FttC. Equally, there is considerable investment in mobile networks to provide mobile broadband connectivity to subscribers based on HSPA and LTE technologies, though the amount invested in 2012 fell year-on-year.
Investment has been maintained in spite of the impact of the financial crisis and by the effects of Luxembourg’s general economic slump, which saw GDP fall in 2009, largely due to the knock-on effects of the poor economic performances of the Duchy’s neighbouring trading partners. Nevertheless, GDP per capita, at about US$116,000, provides one of the highest disposable incomes in Europe to maintain consumer spend on telecom services.
The incumbent POST Telecom (formerly P&T Luxembourg) remains the dominant player in all market sectors, despite the telecoms market having been liberalised in 1998. Regulatory measures during the last few years have encouraged broadband competition through local loop unbundling, yet the proportion of unbundled lines remains relatively low. As yet, there are few broadband subscribers on fibre networks but this is set to change as the country migrates to FttP architecture. POST Telecom has set aside €500 million to build its NGN, an open access platform which should allow for effective competition though high wholesale access prices may need to be addressed by the regulator.
In common with most other markets, revenue from the fixed line sector has been falling steadily. Indeed since 2005 income generated by mobile telecoms has far exceeded that from of fixed lines, while revenue from the broadband sector has propped up total revenue.
High mobile penetration has slowed subscriber growth in the mobile market since 2005. Partly as a result of fixed-mobile substitution, Luxembourg has one of the lowest fixed-line densities in Europe, at about 50%. As a consequence, revenue from the fixed line sector has been falling steadily as consumers migrate to mobile-only solutions. In 2005 income generated by mobile telecommunications exceeded those of fixed lines for the first time.
For detailed information, table of contents and pricing see: Luxembourg - Telecoms, IP Networks, Digital Media and Forecasts
Slow sector revenue growth bolstered by Telstra and 2nd tier operators 27 Nov 2014
BuddeComm estimates that the overall telecoms services revenue will have grown only marginally in 2014, reaching about $42.9 billion. This will be largely due to the effects of continuing depressed revenue from Vodafone and Optus, offset by a resurgent Telstra and by a host of 2nd tier players which reported strong revenue growth in FY2014. These players in general anticipate reporting further revenue gains for FY2015. Competition among them, compounded by consumer expectations, continue to place pressure on pricing into 2015, particularly in the mobile voice and mobile data segments. Overall revenue growth into 2016 is expected to remain stable at about 1-1.5% annually.
Telstra retains its dominance in the Australian telecom market, enjoying a 61% market share of revenue. Its strong position has been aided by the poor strategic direction taken by Optus and Vodafone during the last two to three years, as well as by its own astute decisions undertaken recently. The sale of the company’s interests in some international businesses secured considerable profits which have enabled it to invest in new enterprises showcasing its growing interest in areas such as OTT services and healthcare.
Broadband continues to prosper as customers switch to mobile solutions
Australia’s broadband market has slowed since mid-2000s, reflecting higher penetration among consumers. The rapid growth in the number of wireless mobile broadband subscribers has maintained overall growth in the market in recent years, driven by smartphones and tablets. In 2014 the number of broadband subscribers is expected to have grown by about 2-3%, year-on-year. A key concern moving forward is how far operators should invest in DSLAM infrastructure. With the multi-technology mix for the NBN emphasising a combination of FttN and HFC architecture, the transition from DSL to fibre-based infrastructure will be on a far smaller scale than was envisaged only a year ago.
There has also been resurgent interest in WiFi, with Telstra in mid-2014 announcing plans to invest more than $100 million to build a network of some two million hotspots across the nation within five years. This is complemented by a growing number of municipal-backed WiFi zones.
In 2014 the residential broadband market is expected to be worth about $19.2 billion, a slight increase on 2013. With almost 90% of Australian households having home internet access by the tail-end of 2014, the sector is now more focussed on multiple broadband connections via both wired and wireless service providers.
The 2nd tier market
Developments in this market have been dominated by industry consolidation, a process likely to continue over coming years. Size and reach have proven to be crucial for operators to flourish in a market dominated by only a few players, and with progress with the NBN set to be ramped up following a management overhaul.
Mergers, acquisitions and sales have resulted in significant changes in revenue for some players. AAPT, acquired from Telecom New Zealand by TPG in February 2014, shows indications that declining revenue over the last few years will provide positive growth into 2015. In general terms, most operators excepting AAPT performed well in FY2014, and look set to report strong financial gains into FY2015 as they take advantage of their assets and skill in providing cloud and data centre services to the corporate and government sectors.
Overall mobile services revenue growth by MNOs over the last few years has slowed to about 1%, though stronger growth from Telstra, at about 5% in FY2014, has offset declines from both Optus and Vodafone. Stagnant revenue from Optus should be expected from these last two operators into 2015, though towards the end of 2014 Vodafone pledged its determination to fight back and improve its market share through customer acquisitions. Significant investment in mobile networks, despite opting not to secure spectrum in the 700MHz band at auction, should provide customers with greater confidence in the company’s network capabilities.
The number of mobile subscribers continues to grow steadily, and by late 2014 mobile penetration had approached 132%. While subscriber growth is likely to continue in the next few years, this will slow in line with higher penetration, being about 2% for 2014 and into 2015.
Telstra remains the market leader with more than 16 million subscribers, while Optus has around 9.4 million and Vodafone now has fewer than five million, compared to about 7.6 million in 2010, before network failures caused customers to churn to other providers.
The release of spectrum for LTE use in early 2015 will go far to enabling Telstra and Optus to deliver their promised 98% population coverage with LTE by the end of 2016. Vodafone has concentrated on refarming its 800MHz concessions, lessening its spectrum disadvantage. Increases in capital expenditure by these MNOs will be required in coming years before notably gains in revenue can be realised.
A new BuddeComm report provides data and analyses on Australia’s telecom sector, including a wealth of statistics relating to various market segments. The report assesses overall market dynamics, the key financial and operating performance of the principal players, and developments in the mobile, fixed-line and broadband sectors. These sectors continue to be affected by changing consumer use of services, the widespread deployment of LTE technologies, and the new market realities resulting from the review of the NBN under which the preferred multi-technology architecture has rekindled investment in HFC plant and existing DSL infrastructure.
For detailed information, table of contents and pricing see: Australia - Telecoms Industry - Statistics and Forecasts
Nepal’s telecom sector sees growth pick up, with mobile internet access increasing rapidly 27 Nov 2014
Efforts to expand the telecom sector in Nepal have met with many challenges. Nepal’s mountainous topography has made it extremely difficult to develop its telecommunications infrastructure. Furthermore, Nepal had been struggling under an adverse economic situation caused largely by political instability. Over the years, acts of terrorism and the activity of the Maoist rebels operating throughout the country have taken their toll on the telecom network – both directly and indirectly. Of late, it has been the tardiness of the government in addressing market reforms and developing national policies that has been weighing on the overall development of the telecom sector.
The country has certainly been on a road to recovery from the long years of civil unrest. Nepal’s transition to a considerably more stable nation had begun by 2007. The country’s first elections for over nine years were held in 2008; a clear victory going to the Maoists who were as a result to become a party of government. Although the way forward was not necessarily going to be smooth, with this remarkable turnaround following years of great difficulty, the scene was set to build on the considerable progress already made in recent times in meeting the growing demand for telephone services. Not only has there been strong subscriber growth, especially in the mobile sector, but there was evidence of a clear vision in the sector, including putting a reform process in place and planning for the building of necessary telecommunications infrastructure. Most importantly, the Ministry of Information and Communications (MoIC) and the telecom regulator, the National Telecommunications Authority (NTA), both became very active in the performance of their respective roles. However, as already noted, by 2013/2014 there was evident concern that some of the momentum of the reform process had been lost.
The Nepal Telecom Company, the state-owned incumbent operator, has been the major builder and operator of the national telecom network. For a long time it held a monopoly over all aspects of telecom in the country. With the opening up of the market, Nepal Telecom lost its monopoly on basic telecom services a little more than a decade ago with the licensing of United Telecom Ltd (UTL). It subsequently surrendered its monopoly on mobile services with the licensing of Spice Nepal Pvt Ltd, later known as Ncell, in 2004. The period after 2006 saw notably strong subscriber growth, especially in the mobile segment of the market. Mobile penetration went from 5% in 2007 to more than 70% in 2014.
Despite all the energy that has gone into the sector, there was still a significant disparity between the high coverage levels in the cities and the coverage available in the underdeveloped rural regions. Progress on providing some minimum access had been good, however.
For detailed information, table of contents and pricing see: Nepal - Telecoms, Mobile, Internet and Forecasts
Fibre-to-the-Home in Asia-Pacific reaches 100 million milestone 26 Nov 2014
Growth of content and demand for bandwidth is credited with helping to boost take-up of the Fibre-to-the-Home (FttH) also known as Fibre-to-the-Premise (FttP) technology
New figures have revealed that 100 million people in the Asia-Pacific region are now subscribed to FttH) services.
The major milestone, shown by analyst house Ovum’s latest statistics, was announced by the FttH Council Asia-Pacific, which promotes and encourages the adoption of fibre technologies.
Work by the council, including the sharing of accurate and unbiased information about regulatory policies, standards and best practice, is credited as contributing to the successful take up of FttH services in the region.
According to the researchers, Asia-Pacific is leading the world in FttH subscribers and this is a major milestone which represents a tremendous financial investment and a strong understanding of the future of networking infrastructure. It reflects the growth of content and the continuous demand for content.
This region also reflects a wide range of deployment models – from strong government goals to innovative wholesale-retail models to crossing the digital divide with support for e-health and e-education in rural regions. In addition this major milestone was achieved through innovative solutions from fibre cabling suppliers along with component and equipment vendors.
Number of fixed-lines continues to fall in Albania as consumers switch to mobile solutions 26 Nov 2014
Albania’s telecom market continues to have room for further development. Penetration in the fixed-line and broadband sectors remains very low by European standards, and there are opportunities for further investment in networks upgrades to help propel the country’s economic growth through digital offerings and IP-based technologies and services. On the other hand, poor fixed-line infrastructure has encouraged consumer use of mobile telephony, and now Albania boasts one of the highest mobile penetration rates in Europe.
The country has long sought accession to the European Union (EU) which has benefited its telecoms sector through closer scrutiny of its regulatory regime and through the injection of funding to help modernise infrastructure. Albania signed a Stabilisation and Association Agreement with the EU, which came into force in mid-2009. As part of the EU pre-accession process, Albania has received financial aid to build public institutions and improve cross-border co-operation under the EU’s Instrument for Pre-Accession Assistance funding mechanism. Since June 2014 Albania has been recognised as an official candidate for accession to the EU.
Albania’s economy has enjoyed strong growth in GDP throughout the GFC, albeit from a low base. It has weathered the economic impact resulting from the faltering economies of its main trading partners Italy and Greece. Further growth recovery was evident in 2014.
Future network development has been undertaken to support the growing popularity of broadband services: given the low broadband penetration level, Albania’s internet market offers considerable potential, which is in part being met by the two mobile network operators. This has gone far to alleviate poor connectivity in rural areas.
Albania’s mobile market has undergone rapid growth due to competition, with four operators including Vodafone, Eagle Mobile, Cosmote’s AMC and Plus Communication offering services. Operators are looking to mobile data applications and services to increase ARPU.
For detailed information, table of contents and pricing see: Albania - Telecoms, IP Networks, Digital Media and Forecasts
Kyrgyzstan appears to take a step backwards with decision not to fully privatise Kyrgyztelecom 25 Nov 2014
The telecommunications sector in Kyrgyzstan has been generally characterised by an open market that welcomes both foreign and domestic investors. This has been effectively done in accordance with the requirements set down by the WTO. Under the terms of the country’s accession to the WTO (which took place in 1998), full liberalisation of the telecoms market had been expected to be achieved by end-2006. According to the ITU, Kyrgyzstan had implemented full competition across all segments of its telecoms sector by 2007. Nevertheless, despite the market being ‘fully competitive’ there remained more to be done on the regulatory front to take full advantage of the reforms already in place. There also remains a culture of poor transparency in some aspects of corporate behaviour; this needs to be addressed if the telecom market is to reach its full potential.
The telecom sector has been part of the final phase of a large scale privatisation program that has been steadily progressing in the country since 1992. The start of market reforms in 1991 saw the state telecommunications agency, Kyrgyztelecom, begin to expand and upgrade its legacy telecom network, which at the time was out-dated and poorly distributed. With the expansion of the telecoms sector, upgraded standards have been adopted. At the same time, a new regulatory authority – the National Communications Agency which later became known as the National Agency for Information Resources, Technologies and Communication - was set up to oversee the sector. At an early stage, Kyrgyztelecom was restructured as a public corporation and the government moved towards a partial sale of the operator to the private sector. Around 10% of the company quickly passed into private hands. After a series of failed attempts to sell off the government shareholding, the government continued to hold almost 78% of Kyrgyztelecom.
In a surprise move the government decided in September 2013 that it would not sell its majority shareholding in Kyrgyztelecom. The reason given for the decision was that ‘[privatisation] could lead to an increase in retail fixed line tariffs in the country.’
In the meantime, private operators, which actively function in the mobile market and in the provision of internet services, have been actively investing in the necessary infrastructure. The two big GSM operators – Sky Mobile (Beeline) and MegaCom – have continued to dominate the market, claiming around 75% of the total mobile subscriber base between them. They have been joined by Nur Telecom; this third ranked player had grabbed a 20% market share by 2014. Since the first GSM network was launched in 1998, the number of mobile subscribers has grown rapidly from a few thousand in 1999 to around seven million by early 2014. Growth in the country’s mobile market was continuing to moderate compared with the general growth in recent years. It was likely that the next few years will see annual expansions of less than 10%. With positive indications that the market will continue to steadily expand for some time yet, there is growing interest in the development of mobile broadband and data services.
As for fixed-line services, the country’s national teledensity had fallen to 8% by 2013, not much different from the figure a decade earlier. Growth in this market segment had effectively stalled. Apart from the lack of growth, there was concern over the imbalance in the market place. Teledensity was around 25% in the capital, but only 5% in the rest of the country.
Kyrgyzstan’s internet user penetration was running at 23% in 2013. By 2012 there were only about 7% of households with a PC. Inevitably cybercafés have become a popular means of accessing the internet in the country. Around 50% of all users were estimated to access the internet in this way, with the workplace and educational institutions also making up a significant proportion of access points. Fixed broadband internet services, whilst a growing proportion of the market, are still small in number. However, since 2011 there has been particularly strong growth in mobile broadband subscriptions. This phenomenon is rapidly changing the shape of the internet market.
For detailed information, table of contents and pricing see: Kyrgyzstan - Telecoms, Mobile, Internet and Forecasts
As subscriber growth eases in Asia’s huge mobile market, the focus has rapidly turned to mobile broadband 24 Nov 2014
Across Asia a total of around 3.5 billion mobile subscribers were being served by a large number of mobile operators coming into 2014. The operators are continuing to drive the market, expanding it by between 5% and 10% annually at the moment. Whilst the growth rate has moderated the sheer numbers are impressive. This market report presents a wide-ranging review, providing details on around almost 200 of the mobile operators to be found in Asia in 2014.
The list of operators ranges from the giant China Mobile with almost 800 million subscribers right through to a number of much smaller operators with only a few thousand subscribers each. And of course there are the MVNOs. BuddeComm’s overview of mobile operators in the region certainly does not claim to present an exhaustive list of the licensed operators but it is truly indicative of the breadth and variety of operator to be found in the region. It also reflects the highly commercial and competitive nature of the mobile sector in this region.
The focus of a new BuddeComm report is on the operators within the individual national markets. Of course, in addition to these individual operators there are those companies such as SingTel, Vodafone, and Axiata (formerly Telekom Malaysia International) that have built a substantial presence around the region beyond their own domestic market through their shareholdings in operators in multiple other markets. This aspect of these corporations is not discussed in any detail but is mentioned in passing in the country by country review.
In BuddeComm’s report Asia Mobile Operators the top operators in Asia are shown ranked by subscribers as of end-2013. It is noted that of the region’s operators these 15 have a combined share of 71% of the total regional mobile subscriber base. In other words, less than 10% of the total number of operators in the market control almost three quarters of the total subscriber base. This list of top operators has remained relatively stable over the last year or so, with few changes to the leading group.
While the overall regional growth rate has eased considerably in the last few years, there are still some countries (and therefore operators) with growth rates well in excess of the regional average. Then of course there are the various growth patterns within the overall subscriber numbers. In this respect, the phenomenal growth of mobile broadband must be mentioned. Operators across the region have been responding to the huge demand for mobile broadband access.
With the progressive opening up of markets to more competition, we initially saw the licensing of more and more operators across the region. One phenomenon in Asia has been the granting of a significant number of mobile operator licences in what have been regarded as smaller markets, ie with relatively low populations as well as low income per capita. We have seen this occur for example in Cambodia, Laos and Georgia. As expected, we have already started to see a process of rationalisation of the operator numbers in such markets.
For detailed information, table of contents and pricing see: Asia Mobile Operators
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