2009 Czech Republic - Telecoms, Mobile, Broadband and Forecasts

Publication Overview

This report covers trends and developments in telecommunications, mobile, Internet, broadband, digital TV and converging media including VoIP and IPTV developments. 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);

·         Market forecasts through to 2018 of broadband subscribers;

·         Convergence and Digital Media Markets.

 

Researcher:- Paul Kwon

Current publication date:- July 2009 (8th Edition)

Next publication date:- July 2010

Executive Summary

BuddeComm’s annual publication, Czech Republic - Telecoms, Mobile, Broadband and Forecasts provides a comprehensive overview of the trends and developments in the telecommunications and digital media markets in the Czech Republic.

 

An open, export-driven economy with Germany as its main trading partner, the Czech Republic grew by over 6% annually from 2005 until 2008 when the global financial crisis and the resulting drop in demand for Czech exports in Western Europe saw export growth turn negative followed by real GDP growth during 2009. To its credit, domestic financial markets are relatively healthy, with low exposure to sub-prime securities and structured financial products and falling interest rates in response to lower inflation expectations for 2009.

 

Despite the difficult conditions the telecoms market is expected to fare well given the essential nature of most telecom services although it may accelerate ongoing trends such as fixed mobile substitution, evident by the ongoing annual decrease in fixed lines in service.

 

Healthy infrastructure-based competition in the fixed broadband market is evident as xDSL accounts for 40% of fixed broadband connections; fixed wireless and cable are the second and third most popular fixed broadband access methods respectively. Fibre-to-the-Home maintains only a foothold in the market although increasing availability and consumption of higher bandwidth content such as HD web TV and IPTV is creating evident demand for faster broadband connections.

 

Like its EU neighbours the Czech Republic has taken steps to develop an Internet society, with the aim of applying ICT to improve both social and economic development, primarily through capturing efficiencies by migrating existing physical processes online. The most visible example is the provision of e-government services. Recent developments such as mandated e-government usage by all businesses and legal entities by 2010 will undoubtedly increase usage of online services and have spill over effects as awareness and familiarity with such services increase among the public.

 

As in much of Europe, mobile subscriber penetration is at saturation levels; SIM card penetration has surpassed 100% with GSM/CDMA/WCDMA services available via several mobile networks from four mobile network operators. Future revenue growth is based on increasing usage and hence revenue per subscriber, mainly in the form of minutes of use and marketing of HSDPA-based mobile broadband services. The latter holds much promise given the current low mobile broadband penetration levels and hence strong annual growth rates of mobile broadband take up.

 

Key highlights:

·         Broadband accounts for majority of all fixed Internet subscriptions. Narrowband subscriptions are decreasing as users migrate to broadband services. The nature of broadband services is changing; fixed broadband growth slowed during 2008, with mobile broadband subscriber numbers growing rapidly during the same period.

·         Encouraging business usage of e-government services is evident, with up to 70% of businesses using e-government services to obtain information, forms and return forms online. New legislation mandates businesses utilise e-government services. Private uptake of e-government lags that of businesses but is expected to grow on the back of increased awareness and recognition of its benefits. Similar initiatives extend to the health and education sectors, with the scope of such initiatives expected to broaden due to EU commitments to online services.

·         Despite the launch of numerous IPTV offerings, it continues to represent only a small portion of total digital TV subscribers; cable and satellite remain the most popular digital TV platforms. The push by cable TV operators such as UPC into complementary services such as broadband access and telephony is paying off, with non-video service subscriptions representing 40% of UPC’s total service subscriptions, with this figure increasing annually.

·         Mobile broadband is the next growth opportunity for mobile network operators, with take up of CDMA/HSDPA-based mobile broadband penetration at only 13%; take up has been boosted by the introduction of mobile plans with generous data allowances. The market for mobile broadband is potentially larger than that of fixed broadband, given the individual subscription-based nature of mobile broadband services.

 

Czech Republic key telecom parameters – 2006; 2009

Category

2006

2009 (e)

Fixed broadband subscribers (thousand)

1,113

1,860

Fixed broadband penetration rate

11%

18%

Mobile broadband penetration rate

1%

20%

Fixed-line telephone subscribers (thousand)

2,890

2,100

Mobile phone subscribers (thousand)

12,200

14,200

·         3G subscribers (thousand)

190

1,100

·         3G market share of mobile base

2%

8%

(Source: BuddeComm based on industry data)

 

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

 

The following notes provide some background to our scenario forecasting methodology:

·         This report includes what we term scenario forecasts. By describing long-range scenarios we identify a band within which we expect market growth to occur. The associated text describes what we see as the most likely growth trend within this band.

·         The projections shown in the tables in this report are based on our own historical information, as well as on telecommunication sector statistics from official and non-official, national and international sources. We assume a possible deviation of 15-20% around this data.

·         All statistics for GDP, revenue, etc are shown in US$, in order to maintain consistency within and between markets. At the same time we acknowledge that this can introduce some irregularities.

Table of Contents

  • 1. Key Statistics
  • 2. Telecommunications Market
    • 2.1 Overview of the Czech Republic telecom market
  • 3. Regulatory Environment
    • 3.1 Background
      • 3.1.1 EU Regulatory Framework
    • 3.2 Regulatory authority
      • 3.2.1 Czech Telecommunications Office (CTO)
    • 3.3 Telecom sector liberalisation in the Czech Republic
      • 3.3.1 Privatisation
      • 3.3.2 Interconnect
      • 3.3.3 Carrier selection and PreSelection
      • 3.3.4 Number portability
      • 3.3.5 Access
  • 4. Fixed Network Operators in the Czech Republic
    • 4.1 Overview of operators
    • 4.2 Telefónica O2 Czech Republic
    • 4.3 Ceske Radiokomunikace (CRa)
    • 4.4 GTS Novera
    • 4.5 CD-Telematika (CD-T)
    • 4.6 VOLNÝ
  • 5. Telecommunications Infrastructure
    • 5.1 National telecom network
      • 5.1.1 Telefónica O2 CR
      • 5.1.2 Alternative operators
      • 5.1.3 Wireless Local Loop (WLL)
    • 5.2 Telecoms & IT
  • 6. Wholesaling
    • 6.1 Overview
  • 7. Internet Market
    • 7.1 Overview
      • 7.1.1 Internet statistics
    • 7.2 ISP market
    • 7.3 Internet society
      • 7.3.1 Strategy
      • 7.3.2 Legislation
      • 7.3.3 E-government
      • 7.3.4 E-health
  • 8. Broadband Market
    • 8.1 Overview
    • 8.2 Fixed broadband statistics
    • 8.3 Cable modems
    • 8.4 Asymmetric Digital Subscriber Line (ADSL)
    • 8.5 Fibre-to-the-Home (FttH) networks
    • 8.6 Broadband over Powerline (BPL)
    • 8.7 Wireless broadband
      • 8.7.1 WiFi
      • 8.7.2 Wireless Local Loop (WLL)
      • 8.7.3 Internet via satellite
      • 8.7.4 WiMAX
  • 9. Convergence
    • 9.1 Overview of media convergence
    • 9.2 Triple play models
    • 9.3 Overview of broadcasting market
      • 9.3.1 Czech Television (CT)
      • 9.3.2 TV Nova
      • 9.3.3 Prima TV
    • 9.4 Regulatory developments
    • 9.5 Digital TV
      • 9.5.1 Broadband TV (IPTV)
      • 9.5.2 Cable TV (CATV)
      • 9.5.3 Satellite-based digital pay TV developments
      • 9.5.4 Digital Terrestrial TV (DTTV)
  • 10. Mobile Communications
    • 10.1 Overview of the Czech Republic’s mobile market
      • 10.1.1 Mobile statistics
    • 10.2 Regulatory issues
      • 10.2.1 Significant Market Power (SMP) obligations
      • 10.2.2 EU roaming tariffs
      • 10.2.3 Mobile termination rates
      • 10.2.4 GSM licences
      • 10.2.5 UMTS licences
      • 10.2.6 Mobile data network tender
      • 10.2.7 Mobile Number Portability
    • 10.3 Mobile technologies
      • 10.3.1 Digital
      • 10.3.2 GSM
      • 10.3.3 Code Division Multiple Access (CDMA)
      • 10.3.4 3G UMTS
    • 10.4 Major mobile operators
      • 10.4.1 Telefónica O2 Czech Republic
      • 10.4.2 T-Mobile
      • 10.4.3 Vodafone Czech Republic
      • 10.4.4 MobilKom / U:fon
    • 10.5 Mobile voice services
      • 10.5.1 Prepaid cards
    • 10.6 Mobile data services
      • 10.6.1 Short Message Service (SMS)
      • 10.6.2 General Packet Radio Service (GPRS)
      • 10.6.3 Push-to-Talk (PTT)
      • 10.6.4 Enhanced Data for GSM Evolution (EDGE)
      • 10.6.5 Mobile broadband
      • 10.6.6 BlackBerry
      • 10.6.7 Mobile TV
    • 10.7 Mobile content and applications
      • 10.7.1 WAP usage
      • 10.7.2 Location-based services
    • 10.8 Mobile advertising
      • 10.8.1 Vodafone CR
      • 10.8.2 T-Mobile
  • 11. Forecasts
    • 11.1 Forecasts – broadband subscribers to 2018
      • 11.1.1 Scenario 1 – higher broadband subscriber growth
      • 11.1.2 Scenario 2 – lower broadband subscriber growth
  • 12. Glossary of Abbreviations
  • Table 1 – Country statistics Czech Republic – 2009
  • Table 2 – Telephone network statistics – 2008
  • Table 3 – Internet user statistics – 2008
  • Table 4 – Broadband subscriber statistics – 2008
  • Table 5 – Mobile statistics – 2008
  • Table 6 – National telecommunications authority
  • Table 7 – Telefónica O2 interconnection rates – 2006 - 2008
  • Table 8 – Telefónica O2 financial data and annual change – 2006 - 2008
  • Table 9 – Telefónica O2 fixed line accesses – 2006 - 2009
  • Table 10 – Fixed lines in service and teledensity – 1995 - 2009
  • Table 11 – Business Internet penetration by employee size – 2004 - 2008
  • Table 12 – Wholesale lines by type – January 2009
  • Table 13 – Access agreements with Telefónica O2 by type – 2006 - 2008
  • Table 14 – Cost of local loop unbundling and share access – 2006 - 2008
  • Table 15 – Internet users, subscribers and penetration rate – 1998 - 2008
  • Table 16 – Telefónica O2 Internet subscribers by access type – 2006 - 2009
  • Table 17 – Percentage of businesses receiving orders online by employee size – 2004 - 2008
  • Table 18 – Online purchases by individuals – 2005 - 2008
  • Table 19 – Take up of e-government services by businesses – 2003 - 2008
  • Table 20 – Take up of e-government services by individuals – 2003 - 2008
  • Table 21 – Fixed broadband subscribers and penetration – 2001 - 2008
  • Table 22 – Fixed broadband subscribers by access type – January 2009
  • Table 23 – Telefónica O2 ADSL subscribers – 2003 - 2009
  • Table 24 – Audience share by broadcaster – prime time – 2005 - 2009
  • Table 25 – Audience share by broadcaster – all day – 2005 - 2009
  • Table 26 – Telefónica O2 pay TV subscribers – 2006 - 2009
  • Table 27 – UPC homes passed – 2003 - 2008
  • Table 28 – UPC subscribers by service type – 2003 - 2008
  • Table 29 – Mobile operators, subscribers and annual change – 2008
  • Table 30 – Mobile subscribers and penetration rate – 1995 - 2008
  • Table 31 – Telefónica O2 ARPU & MOU – 2006 - 2009
  • Table 32 – T-Mobile financial and operational data – 2004 - 2008
  • Table 33 – Ratio of prepaid to postpaid subscribers – 2001 - 2008
  • Table 34 – T-Mobile prepaid subscribers – 2005 - 2008
  • Table 35 – Telefónica O2 CR prepaid subscribers – 2004 - 2009
  • Table 36 – Vodafone CR prepaid subscribers – 2005 - 2008
  • Table 37 – Total mobile broadband subscribers and penetration rate – 2004 - 2008
  • Table 38 – Forecast broadband subscribers – higher growth scenario – 2009 - 2012; 2018
  • Table 39 – Forecast broadband subscribers – lower growth scenario – 2009 - 2012; 2018
  • Exhibit 1 – The EU regulatory framework for communications
  • Exhibit 2 – Access, the local loop and unbundling – an overview
  • Exhibit 3 – The Economist Intelligence Unit (EIU) annual E-readiness criteria
  • Exhibit 4 – 2G spectrum awarded in the Czech Republic

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