2009 Austria - Telecoms, IP Networks, Digital Media and Forecasts

BuddeComm’s annual publication, Austria - Telecoms, IP Networks, Digital Media and Forecasts, provides a comprehensive overview of the trends and developments in the telecommunications and digital media markets in Austria.

Austria’s mid-sized telecom market is one of the most competitive in Europe, with numerous operators providing voice and data services, led by Telekom Austria, Tele2UTA, and eTel Austria. The main telcos are well placed to take advantage of opportunities in the less mature and rapidly developing markets of central and eastern Europe.

In recent years the Austrian telecoms market has witnessed rapid growth in revenues from mobile and data communications, generally declining rates and charges, and lower fixed-voice traffic. These trends are likely to continue through to 2010 at least, with the continuing decline in overall revenue being propped up by mobile data service revenue and broadband increasingly becoming a single service within popular broader bundled packages. Market revenue showed rapid growth until 2006, since when it has dipped, falling 3.7% in 2007 and 5.4% in 2008 and an estimated 4% in 2009 as the effects of the economic downturn reflects more constricted consumer spending habits.

In the mobile sector there are four network operators as well as a small number of MVNOs and resellers. The market has been adjusted on several occasions following a number of acquisitions – tele.ring by T-Mobile (2006), One by Orange and Mid Europa Partners (July 2007), and Tele2’s mobile division by Telekom Austria (early 2008).

Broadband penetration is slightly below the EU average, though as a result of effectively competing cable and DSL platforms, as well as low average access prices, about 55% of Internet households had a broadband connection by mid-2009 (83% if mobile broadband is also taken into account). Together, Telekom Austria and UPC Austria provide around two-thirds of all fixed broadband connections.

Austria – key telecom parameters – 2008 - 2009

(Source: BuddeComm)

Key highlights:

·         The retail market continues to be dominated by Telekom Austria, which has about 60% share of voice traffic and 90% of revenue from the residential and business rectors. Competitors such as Tele2, UPC and COLT are gradually increasing market share as their build their own networks. Nevertheless, the 10% fall in fixed-line voice revenue year-on-year will require these operators to exploit bundled offers in coming years to attract and retain customers.

·         Despite regulated access to Telekom Austria’s network since 2001, the proportion of unbundled lines remains low. The company, slow to implement LLU, was fined €1.5 million in 2009 for operating an LLU policy deemed unfair to competitors. By taking a firmer line on access, the regulator should have substantially improved the conditions for alternative operators in 2010.

·         Frequencies in the 3.5 GHz band suitable for broadband wireless access services were auctioned in December 2008, valid to 2019. The regional operators will substantially augment rural broadband access and make up for the failed and much delayed auction of frequency in the 450 MHz band.

·         Fibre continues to impact telecom networks, supported by government-sponsored rural broadband initiatives. Local operators are expected to pass about 1.2 million homes by 2015. Growth in the number of fibre subscriptions, at about 25% in 2009, will push the proportion of FttH/FttB subscribers to about bout 8% of all broadband subscribers by the end of 2010.

·         Digital switchover has progressed well, and by early 2009 most households had switched to DVB-T. About 92% of households receive the channels bundled on MUX A, and while no further expansion of the MUX B platform coverage area is planned the regulator has reserved licences for a third digital multiplex (MUX C) to regional broadcasters and initiatives.

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