Slovenia - Telecoms, IP Networks, Digital Media and Forecasts

Publication Overview

This report provides a comprehensive overview of trends and developments in Slovenia’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:

Mobitel merges with parent company; mobile broadband accounting for over a third of mobile subscribers; Si.Mobil expands HSPA+ upgrade to 85% of the population; Mobitel launches trial LTE service; Telekom Slovenije unbundles fibre infrastructure; CATV retains 52% share of TV subscribers; FttH subscriber base increases 11% in 2010; government broadband program targets extending FttH to 90% of the population by 2020; sharp rise in VoIP connection as PSTN declines; telecoms sector investment recovers from economic downturn; regulator’s 2010 market report and Q1 2011 update; operator data to Q1 2011.

Companies covered in this report include:

Si.Mobil, Mobitel, Tušmobil, T-2, debitel, Telekom Slovenije, Telemach, Amis Telekom, Serbia Broadband, Tuštelekom.

Researcher:- Henry Lancaster
Current publication date:- August 2011 (10th Edition)

Executive Summary

Regulator’s fibre access measures kick start flagging FttH investment

BuddeComm’s annual publication, Slovenia - 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 smaller but more progressive markets. It includes the regulator’s 2010 annual report and Q1 2011 market updates as well as operator data for Q1 2011.

A comparatively prosperous Eastern European country, Slovenia was one of the ten accession countries to the European Union (EU) in 2004. It had one of the strongest economies among the new accession states, being the first among them to adopt the euro. However, the global financial crisis has negatively impacted the economy in recent years, exacerbated by the country’s reliance on exports, particularly to its main trading partners Germany and Italy. The economy contracted by an estimated 7.8% in real terms during 2009, though the EU estimates 1.1% real GDP growth for 2010, rising to 1.8% for 2011 on the back of continued government policy support and a pickup in external demand. Economic growth was estimated at 0.9% in 2010, and is forecast at 2.5% in 2011 and 3.1% in 2012 in expectation of improving conditions on the labour market and in construction and related activities.

The telecoms market has fared relatively well during the downturn due to relatively low debts levels among telcos and stable cash flows. Identified risks include subdued growth prospects and difficulty in access new financing sources. Nevertheless, the economic crisis initially affected the construction of fibre networks where the main operators largely halted their investment and programs in 2009. To stimulate the sector, the regulator has complemented its measure on unbundling copper infrastructure by unbundling the fibre loop as well.

The telecom sector overall contributed 3.6% to GDP, compared to the EU average of 2.8%. Telecom sector revenue increased 2.76% in 2009, year-on-year, reaching €1.266 billion, and is expected to reach €1.3 billion for 2010 and €1.35 billion in 2011.

Much of this steady growth is due to the recovery in network investment following the sharp fall in 2009: investment fell 47% in 2009, year-on-year, to only €146 million. Overall investment has recovered since, reaching an estimated €190 million in 2010 and €210 million in 2011. Much of this investment is being channelled to developing fibre networks and upgrading mobile networks with HSPA and LTE technologies.

In the broadband sector DSL remains the most popular platform although the growing appetite for bandwidth has led to the introduction of FTTx and upgrades to cable networks, offering speeds of up to 120Mb/s.

Slovenia’s competitive mobile market has four MNOs and a number of MVNOs. Market potential is limited by the population of only two million people. With the mobile voice sector essentially saturated, due to high SIM card penetration, MNOs have shifted their focus to defending market share from new entrants and increasing Average Revenue per User (ARPU) levels through encouraging prepaid users to take up postpaid services as stimulating the underdeveloped mobile broadband and content market. Further pressure has been placed on operators through regulatory-mandated mobile termination rate (MTR) reductions.

 Key telecom parameters – 2010; 2012

(Source: BuddeComm)

Market Highlights

• Mobitel began trialling LTE in the 1800Mhz band in mid-2011, having been allotted supplementary frequencies by the regulator. The operator plans to deploy LTE and LTE-advanced services in the 800MHz, 1800MHz and 2600MHz bands, dramatically improving broadband availability in rural areas.
• Investment in HSPA technology among MNOs will provide near universal population coverage, utilising 900MHz spectrum made available for 3G in late 2010.
• Analogue switch-off (ASO) was achieved at the end of 2010: Slovenia’s DTTV broadcasts will be provided by a total of nine multiplexes, four of which will be used for digital TV broadcasting. Two national multiplexes are complemented by seven smaller multiplexes intended mainly for covering local areas.
• Following ASO, the regulator planned to assign digital dividend spectrum by the end of 2011, principally for mobile broadband use.
• TV access is dominated CATV which has a 52% market share of subscribers, followed by IPTV with 41 %, and satellite TV with 5%. Multichannel Multipoint Distribution Service (MMDS) technology has about 1.6% market share. IPTV growth is expected to be strong in coming years as fixed networks are upgraded with DOCSIS 3.0 and FttH technologies.
• The fibre market is dominated by a few operators: T-2 with a market share of 57.4% and Telekom Slovenije with a 38.6% share. The cost of network roll-outs and the economic downturn halted investment in 2009, though recovery is now again underway as a result of the regulator’s measures to stimulate the sector by introducing access regulations on the incumbent’s ducts and infrastructure.

This report is essential reading for those needing high level strategic information and objective analysis on the telecom sector in Slovenia. 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 in 2010;
• 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.

Data in this report is the latest available at the time of preparation and may not be for the current year.

Table of Contents

• 1. Key Statistics
• 2. Telecommunications Market
  • 2.1 Overview of Slovenia’s telecom market
• 3. Regulatory Environment
  • 3.1 History
    • 3.1.1 EU Regulatory Framework
    • 3.1.2 Revised NFR
  • 3.2 Regulatory authority
    • 3.2.1 Post and Electronic Communications Agency (APEK)
  • 3.3 Telecom sector liberalisation in Slovenia
    • 3.3.1 Privatisation of Telekom Slovenije
    • 3.3.2 Interconnection
    • 3.3.3 Access
    • 3.3.4 Number portability
    • 3.3.5 Carrier selection and carrier preselection
• 4. Fixed Network Operators
  • 4.1 Overview of operators
  • 4.2 Telekom Slovenije
  • 4.3 AMIS Telekom
  • 4.4 T-2
• 5. Telecommunications Infrastructure
  • 5.1 Telekom Slovenije
  • 5.2 Alternative operators
  • 5.3 Wholesaling
• 6. Internet Market
  • 6.1 Slovenia’s emerging Internet society
  • 6.2 Strategy
  • 6.3 Legislation
  • 6.4 Identification and authorisation
  • 6.5 E-government
    • 6.5.1 Infrastructure
  • 6.6 E-health
• 7. Broadband Market
  • 7.1 Overview
  • 7.2 Fixed broadband statistics
  • 7.3 Asymmetrical Digital Subscriber Line (ADSL)
  • 7.4 Cable modems
  • 7.5 Fibre-to-the-Home (FTTH)
  • 7.6 Wireless broadband
• 8. Digital Media
  • 8.1 Overview of digital media market
    • 8.1.1 Regulatory environment
    • 8.1.2 Digital TV
• 9. Mobile Communications
  • 9.1 Overview of Slovenia’s mobile market
    • 9.1.1 Mobile statistics
  • 9.2 Regulatory issues
    • 9.2.1 GSM licences
    • 9.2.2 First 3G licence awarded
    • 9.2.3 Tender for additional 3G licences
    • 9.2.4 Sub 1GHz spectrum
    • 9.2.5 Mobile Number Portability
    • 9.2.6 Mobile Termination Rates (MTR)
  • 9.3 Mobile technologies
    • 9.3.1 Digital
    • 9.3.2 Third generation mobile
  • 9.4 Major mobile operators
    • 9.4.1 Mobitel
    • 9.4.2 Si.Mobil
    • 9.4.3 Tušmobil
    • 9.4.4 T-2
    • 9.4.5 Mobile Virtual Network Operators (MVNOs)
  • 9.5 Mobile voice services
    • 9.5.1 Prepaid
  • 9.6 Mobile data services
    • 9.6.1 Short Message Service (SMS) / Multimedia Messaging Service (MMS)
    • 9.6.2 Push-to-Talk (PTT)
    • 9.6.3 General Packet Radio Service (GPRS) / Enhanced Data Rates for GSM Evolution (EDGE)
    • 9.6.4 High Speed Packet Access (HSPA)
    • 9.6.5 Long-term Evolution (LTE)
    • 9.6.6 Mobile TV
    • 9.6.7 Mobile broadband
  • 9.7 Mobile content and applications
• 10. Forecasts
  • 10.1 Forecasts – fixed broadband subscribers to 2020
    • 10.1.1 Scenario 1 – higher fixed broadband subscriber growth
    • 10.1.2 Scenario 2 – lower fixed broadband subscriber growth
• 11. Glossary of Abbreviations

• Table 1 – Country statistics – 2011 (e)
• Table 2 – Telephone network statistics – 2010
• Table 3 – Internet user and subscriber statistics – March 2011
• Table 4 – Broadband subscriber statistics – March 2011
• Table 5 – Mobile statistics – 2011 (e)
• Table 6 – National telecommunications authority
• Table 7 – Telecom market revenue growth – 2006 - 2011
• Table 8 – Telecom market share by operator – 2010
• Table 9 – Registered operators of telecom services – Jan 2011
• Table 10 – Telekom Slovenije interconnection rates – 2006 - 2009
• Table 11 – Fixed-line number portings – 2009 – 2010
• Table 12 – Fixed-line connections – 2007 – 2010
• Table 13 – VoIP connections – 2008 – 2012
• Table 14 – Telekom Slovenije market share of fixed line – 2008 – 2011
• Table 15 – Telekom Slovenije Group financial data – 2007 – 2011
• Table 16 – Telekom Slovenije – Fixed connections by type – 2007 - 2009
• Table 17 – Telekom Slovenije domestic broadband and mobile subscribers – 2009 - 2010
• Table 18 – Telekom Slovenije Group broadband and mobile subscribers – 2009 - 2010
• Table 19 – Fixed lines in service and teledensity – 1995 - 2010
• Table 20 – Wholesale access lines by type – 2009 – 2010
• Table 21 – Cost of Local loop unbundling and shared access – 2006 - 2009
• Table 22 – Telkom Slovenije wholesale connections – 2006 – 2009
• Table 23 – E-education usage by individuals – 2007 - 2010
• Table 24 – E-education usage by businesses – 2007 - 2010
• Table 25 – Online purchases by individuals – 2006 - 2010
• Table 26 – Electronic sales as percentage of total non-VAT turnover for non-financial sector businesses with 10 or more employees – 2009
• Table 27 – Take up of e-government services by businesses – 2004 - 2010
• Table 28 – Take up of e-government services by individuals – 2004 - 2010
• Table 29 – Fixed broadband accesses by data rates – 2007 - 2010
• Table 30 – Internet users, subscribers and penetration rates – 1998 - 2011
• Table 31 – Fixed broadband market share by access type – 2007 - 2010
• Table 32 – Fixed broadband lines by access type – 2007 - 2012
• Table 33 – Wholesale broadband subscribers by access type – 2008 - 2010
• Table 34 – Fixed broadband subscribers and penetration – 2001 - 2012
• Table 35 – Telekom Slovenije broadband subscribers – 2001 - 2011
• Table 36 –FttH subscribers – 2006 - 2012
• Table 37 – Telekom Slovenije FttH subscribers – 2007 - 2010
• Table 38 – Wireless broadband subscribers by access type – January 2010
• Table 39 – Bundles services subscribers by sector – 2009 - 2012
• Table 40 – Audience share by broadcaster – prime time – 2005 - 2010
• Table 41 – Audience share by broadcaster – all day – 2005 - 2010
• Table 42 – Total TV advertising spending – 2004 - 2011
• Table 43 – TV providers and genre – 2011
• Table 44 – Market share of IPTV providers – 2006 - 2010
• Table 45 – SiOL IPTV subscribers – 2006 – 2010
• Table 46 – Mobile subscribers and penetration rate – 1997 - 2012
• Table 47 – Operator market share by subscribers – 2009 - 2010
• Table 48 – Mobile number portings – 2009 – 2010
• Table 49 – Mobile Termination Rates – 2007 – 2010; 2013
• Table 50 – Mobitel financial data – 2007 – 2010
• Table 51 – Mobitel subscribers – 2008 - 2010
• Table 52 – Si.Mobil financial data – 2004 – 2011
• Table 53 – Si.Mobil prepaid, postpaid & blended monthly ARPU – 2004 – 2011
• Table 54 – Si.Mobil mobile data ARPU – 2007 - 2010
• Table 55 – Si.Mobil Minutes of Use (MOU) – 2007 – 2011
• Table 56 – Ratio of prepaid to postpaid subscribers – 2000 - 2012
• Table 57 – Mobitel prepaid subscribers – 2005 - 2010
• Table 58 – Si.Mobil prepaid subscribers – 2004 - 2010
• Table 59 – Total SMS messages sent – 2005 - 2012
• Table 60 – Mobile broadband subscribers and penetration rate – 2004 - 2012
• Table 61 – Dedicated mobile broadband modem penetration – 2008 - 2010
• Table 62- Si.Mobil mobile broadband subscribers – 2009 - 2011
• Table 63 – Forecast fixed broadband subscribers – higher growth scenario – 2010 - 2013; 2020
• Table 64 – Forecast fixed broadband subscribers – lower growth scenario – 2010 - 2013; 2020

• Chart 1 – VoIP connections – 2008 – 2012
• Chart 2 – Telekom Slovenije Group financial data – 2007 – 2011
• Chart 3 – Fixed broadband accesses by data rates – 2007 – 2010
• Chart 4 – Fixed broadband lines by access type – 2007 – 2012
• Chart 5 – Wholesale broadband subscribers by access type – 2008 – 2010
• Chart 6 – Fixed broadband subscribers and penetration – 2001 – 2012
• Chart 7 – Bundles services subscribers by sector – 2009 – 2012
• Chart 8 – Market share of IPTV providers – 2006 – 2010
• Chart 9 – Mobile subscribers and penetration rate – 1997 – 2012
• Chart 10 – Mobitel financial data – 2007 – 2010
• Chart 11 – Si.Mobil financial data – 2004 – 2011
• Chart 12 – Si.Mobil prepaid, postpaid & blended monthly ARPU – 2004 – 2011
• Chart 13 – Ratio of prepaid to postpaid subscribers – 2000 – 2012
• Chart 14 – Mobile broadband subscribers and penetration rate – 2004 – 2012

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