2012 Czech Republic - Telecoms, IP Networks, Digital Media and Forecasts

Last updated: 20 Aug 2012 Update History

Report Status: Archived

Report Pages: 72

Analyst: Henry Lancaster

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Summary
Table Of Contents

Publication Overview

This report provides a comprehensive overview of trends and developments in the Czech Republic’s telecommunications market. The report analyses the mobile, internet, broadband, digital TV and converging media sectors. Subjects include:

Market and industry analyses, trends and developments;
Facts, figures and statistics;
Industry and regulatory issues;
Infrastructure;
Major Players, Revenues, Subscribers, ARPU, MoU;
Internet, VoIP, IPTV;
Mobile Voice and Data Markets;
Broadband (FttH, DSL, cable TV, wireless);
Convergence and Digital Media;
3G subscriber and mobile ARPU forecasts to 2015;
Broadband market forecasts for selective years to 2020.

Key developments:

VOLNY transfers DSL subscribers to O2 and sues for CZK4 billion; telecom revenue falls 4.1% in Q1 2012; government’s ICT strategy developing cost savings; Dial Telecom quadruples international capacity; ASO on CT1 and CT2 completed; Ceske Radiokomunikace buys CDG to control three muxes; SkyLink bought by M7 Group; DVB-T2 expected to reach 60% population coverage by end-2012; CRa merges with majority shareholder MCCH; Vodafone launches VDSL2 services; RIO Media building one of the largest FttH networks; BPL in Prague a success through SmartCity Platform; cloud computing now used by 20% of businesses; broadband subscriber base show steady growth; MNOs promote m-payment services; T-Mobile launches DC-HSPA+; Telefónica and T-Mobile sign network sharing agreement; regulator closes analogue NMT network; spectrum auction in several bands prepared for later in 2012; regulator’s 2011 annual report and market update to June 2012; telcos’ operating and financial data to June 2012; market developments to mid-2012.

Companies covered in this report include:

Telefónica O2, T-Mobile, GTS Czech, Èeské Radiokomunikace, MobilKom, T-Systems Czech Republic, BT, ÈD-Telematika, ÈEZ ICT Services and UPC Èeská republika, DigiTV, CRa, CDG, Vodafone, Nej TV, RIO Media, T-Mobile CR.

Researcher:- Henry Lancaster
Current publication date:- August 2012 (11th Edition)

Researcher:- Henry Lancaster

Current publication date:- August 2012 (11th Edition)

Executive Summary

UPC network investment results in cable broadband gains on DSL

BuddeComm’s annual publication, Czech Republic - Telecoms, IP Networks, Digital Media and Forecasts, provides a comprehensive overview of the trends and developments in the telecommunications and digital media markets in one of Eastern Europe’s more progressive countries. The report includes the regulator’s market data to the end of 2011, telcos’ financial and operating data to June 2012, and market developments in mid-2012.

Economic background

Following two years of solid growth, the economy faltered in 2008, falling by 4.7%. Slow growth was again achieved in 2009, though it slowed again in 2011, to 1.7%, and is expected to show only marginal growth for 2012. The recovery process has been jeopardised by inflationary pressures caused by a growth in costs for oil, food and raw materials, counteracted by the strengthening Czech currency.

Telecom market overview

Economic difficulties have been mirrored in the telecoms sector, where revenue has fallen steadily since 2010. The largest fall has been in the mobile sector, while overall ICT revenue has also declined. Little respite is expected through to 2013 as telcos face stiffening competition in a maturing market as well as the effects of newly imposed termination and roaming tariffs.

Broadband market

In general terms, the market share of broadband subscribers held by DSL providers has fallen since 2006 while the cable sector has been relatively stable. The Market share of FttX has risen steadily, though at a slower pace than that of mobile broadband. In the wake of the greater availability and capabilities of mobile technologies, the market share of broadband based on WiFi and FWA has fallen since about 2007.

Key telecom parameters – 2010; 2012

Sector	2010	2012
Subscribers by sector (million):
Fixed broadband subscribers	2.30	2.79
Mobile broadband	0.54	0.76
Mobile phone	14.4	13.5
Fixed-line telephony	1.89	1.65
Penetration by sector:
Fixed broadband	22%	26%
Mobile	136%	131%
Fixed-line	18%	14%

(Source: BuddeComm)

Market Highlights

Following ASO in early 2012, the national transmission company Radiokomunikace has concentrated on using DVB-T2 to distribute channels. The company aims to have DVB-T2 services reaching 60% of the population by the end of 2012.
The main cableco UPC offers a 100Mb/s service based on Euro DOCSIS 3.0. This greater speed has placed considerable pressure on Telefónica CR’s DSL network, and has led to the cable sector gaining a larger share of the broadband market. UPC’s broadband subscriber base has considerable room to grow given that only a third of tw0-way homes passed by its network are broadband customers.
The auction for spectrum in a range of bands expected later in 2012 will enable a fourth player to enter the market, using reserved spectrum in the 800MHz band.

This report is essential reading for those needing high level strategic information and objective analysis on the telecom sector in the Czech Republic. It provides further information on:

Market liberalisation and regulatory issues;
The impact of the global economic crisis;
Telecoms operators – privatisation, acquisitions, new licences;
Mobile data market developments in coming years in light of spectrum auctions and new license awards;
3G developments, regulatory issues and technologies including HSPA and LTE;
Broadband migration to an FttH architecture;
Historical and current subscriber statistics and forecasts;
ARPU statistics and forecasts.

1. Key Statistics
2. Telecommunications Market
- 2.1 Overview of the Czech telecom market
- 2.2 Government support
3. Regulatory Environment
- 3.1 Background
  - 3.1.1 EU Regulatory Framework
  - 3.1.2 Revised NFR
- 3.2 Regulatory authority
  - 3.2.1 Czech Telecommunications Office (CTO)
- 3.3 Telecom sector liberalisation in the Czech Republic
- 3.4 Privatisation
  - 3.4.1 Ceske Radiokomunikace
  - 3.4.2 Telefónica O2 CR
- 3.5 Interconnect
- 3.6 Carrier selection and carrier preselection
- 3.7 Number portability (NP)
- 3.8 Access
4. Fixed Network Operators
- 4.1 Overview of operators
- 4.2 Telefónica O2 Czech Republic
- 4.3 Ceske Radiokomunikace (CRa)
- 4.4 GTS Czech
- 4.5 CD-Telematika (CD-T)
- 4.6 VOLNÝ
5. Telecommunications Infrastructure
- 5.1 Telefónica O2 CR
- 5.2 Alternative operators
- 5.3 Telecoms & IT
- 5.4 Wholesaling
  - 5.4.1 Overview
6. Broadband Market
- 6.1 Fixed broadband market
  - 6.1.1 Overview
  - 6.1.2 Cable modems
  - 6.1.3 Asymmetric digital subscriber line (ADSL)
  - 6.1.4 Fibre-to-the-home (FttH) networks
  - 6.1.5 Broadband over powerline (BPL)
- 6.2 Wireless broadband market
  - 6.2.1 Overview
  - 6.2.2 WiFi
  - 6.2.3 Wireless local loop (WLL)
  - 6.2.4 WiMAX
  - 6.2.5 Mobile broadband
7. Digital Media/Digital Economy
- 7.1 Digital economy
  - 7.1.1 Market overview
  - 7.1.2 Strategy
  - 7.1.3 Legislation
  - 7.1.4 E-government
  - 7.1.5 E-health
- 7.2 Digital Media
  - 7.2.1 Overview of broadcasting market
  - 7.2.2 Regulatory developments
  - 7.2.3 Digital TV
8. Mobile Communications
- 8.1 Overview of the Czech Republic’s mobile market
  - 8.1.1 Mobile statistics
- 8.2 Regulatory issues
  - 8.2.1 Significant market power (SMP) obligations
  - 8.2.2 EU roaming tariffs
  - 8.2.3 Mobile termination rates (MTR)
  - 8.2.4 GSM licences
  - 8.2.5 UMTS licences
  - 8.2.6 Mobile data network tender
  - 8.2.7 Mobile number portability (MNP)
  - 8.2.8 Network sharing
  - 8.2.9 Spectrum auctions
- 8.3 Mobile technologies
  - 8.3.1 Analogue
  - 8.3.2 GSM
  - 8.3.3 Code division multiple access (CDMA)
  - 8.3.4 3G UMTS
- 8.4 Major mobile operators
  - 8.4.1 Overview
  - 8.4.2 Telefónica O2 Czech Republic
  - 8.4.3 T-Mobile
  - 8.4.4 Vodafone Czech Republic
  - 8.4.5 MobilKom/U:fon
- 8.5 Mobile voice services
  - 8.5.1 Prepaid cards
- 8.6 Mobile messaging
  - 8.6.1 Short message service (SMS)
  - 8.6.2 Multimedia message service (MMS)
  - 8.6.3 TDD-UMTS
  - 8.6.4 1x EV-DO
- 8.7 Mobile data services
  - 8.7.1 Overview
  - 8.7.2 General packet radio service (GPRS)
  - 8.7.3 Push-to-talk (PTT)
  - 8.7.4 Enhanced data for GSM evolution (EDGE)
  - 8.7.5 High-speed packet access (HSPA)
- 8.8 Mobile content and applications
  - 8.8.1 Mobile TV
  - 8.8.2 Location-based services
  - 8.8.3 Mobile advertising
  - 8.8.4 M-commerce
  - 8.8.5 M-payments
9. Forecasts
- 9.1 Forecasts – fixed broadband subscribers – 2010 - 2013; 2020
  - 9.1.1 Scenario 1 – higher broadband subscriber growth
  - 9.1.2 Scenario 2 – lower broadband subscriber growth
10. Glossary of Abbreviations

Table 1 – Country statistics Czech Republic – 2012 (e)
Table 2 – Telephone network statistics – 2012 (e)
Table 3 – Internet user statistics – 2011
Table 4 – Broadband subscriber statistics – 2012 (e)
Table 5 – Mobile statistics – June 2012
Table 6 – National telecommunications authority
Table 7 – ICT expenditure and investment – 2008 - 2010
Table 8 – Telecom sector revenue – 2008 - 2010
Table 9 – Household telephony connections by type (%) – 2000; 2005; 2010
Table 10 – Household average spend on ICT – 2000 - 2010
Table 11 – Proportion of household ICT spend by type – 2005 - 2012
Table 12 – Mobile number portings – 2003 - 2011
Table 13 – Telefónica O2 financial data – 2006 - 2012
Table 14 – Telefónica O2 fixed-line accesses – 2006 - 2012
Table 15 – GTS financial data – 2009 - 2010
Table 16 – Dial Telecom revenue breakdown – 2008 - 2009
Table 17 – Workplace network usage by network type – 2006 - 2011
Table 18 – Telefónica naked DSL lines – 2009 - 2012
Table 19 – Wholesale lines by type – 2008 - 2009
Table 20 – Cost of local loop unbundling and share access – 2006 - 2009
Table 21 – Internet users, subscribers and penetration rate – 1998 - 2011
Table 22 – Broadband subscribers by access type – 2008 - 2010
Table 23 – Broadband subscribers by access type – 2009 - 2010
Table 24 – Household use of broadband by access type – 2005; 2007; 2009; 2011
Table 25 – Market share of broadband subscribers by access type – 2010 - 2011
Table 26 – Fixed broadband subscribers and penetration – 2001 - 2012
Table 27 – UPC broadband subscribers by service type – 2003 - 2012
Table 28 – Telefónica O2 broadband subscribers by access type – 2006 - 2012
Table 29 – ADSL subscribers by type – 2006 - 2011
Table 30 – Mobile broadband subscribers – 2005 - 2012
Table 31 – E-education usage by individuals – 2007 - 2011
Table 32 – E-education usage by businesses – 2007 - 2011
Table 33 – Business e-commerce sales as proportion of total – 2007 - 2012
Table 34 – Online purchases by individuals – 2005 - 2012
Table 35 – Uptake of e-government services by businesses – 2003 - 2012
Table 36 – Take up of e-government services by individuals – 2003 - 2012
Table 37 – Health practices’ use of internet, select activities – 2008 - 2012
Table 38 – Telefónica O2 pay TV subscribers – 2006 - 2012
Table 39 – UPC revenue – 2007 - 2010
Table 40 – UPC – Homes passed – 2003 - 2012
Table 41 – UPC – Subscribers by service type – 2003 - 2012
Table 42 – SkyLink subscribers – 2006 - 2011
Table 43 – Mobile operators, subscribers and annual change – Jun 2012
Table 44 – Mobile subscribers and penetration rate – 1995 - 2013
Table 45 – European roaming charges – 2007 - 2012
Table 46 – Roaming charges by operator (CZK per minute) – 2010; 2011
Table 47 – MTR charges per minute – 2005 -2012
Table 48 – Mobile number portings – 2006 - 2011
Table 49 – Telefónica O2 subscribers – 2006 - 2012
Table 50 – Telefónica O2 ARPU – 2006 - 2012
Table 51 – T-Mobile subscribers – 2006 - 2011
Table 52 – T-Mobile financial and operational data – 2004 - 2012
Table 53 – T-Mobile blended ARPU – 2004 - 2012
Table 54 – Vodafone subscribers – 2008 - 2011
Table 55 – Ratio of prepaid to postpaid subscribers – 2001 - 2011
Table 56 – Prepaid and postpaid subscribers – 2008 - 2010
Table 57 – T-Mobile prepaid subscribers – 2005 - 2011
Table 58 – Telefónica O2 CR prepaid subscribers – 2004 - 2012
Table 59 – Vodafone CR prepaid subscribers – 2005 - 2011
Table 60 – Total SMS messages sent – 2003 - 2012
Table 61 – SMS roaming charges by operator– 2010 - 2011
Table 62 – Forecast broadband subscribers – higher growth scenario – 2010 - 2013; 2020
Table 63 – Forecast broadband subscribers – lower growth scenario – 2010 - 2013; 2020

Chart 1 – Telefónica O2 financial data – 2006 - 2012
Chart 2 – Dial Telecom revenue breakdown – 2008 - 2009
Chart 3 – Telefónica O2 broadband subscribers by access type – 2006 – 2012
Chart 4 – ADSL subscribers by type – 2006 – 2011
Chart 5 – UPC – Subscribers by service type – 2003 - 2012
Chart 6 – Mobile subscribers and penetration rate – 2003 - 2013
Chart 7 – Telefónica O2 ARPU – 2006 - 2012
Chart 8 – T-Mobile financial and operational data – 2004 - 2012
Chart 9 – Prepaid and postpaid subscribers – 2008 – 2010

Exhibit 1 – The EU regulatory framework for communications
Exhibit 2 – Access, the local loop and unbundling – an overview
Exhibit 3 – 2G spectrum awarded in the Czech Republic

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