2010 Netherlands - Telecoms, IP Networks, Digital Media and Forecasts

BuddeComm’s annual publication, Netherlands - Telecoms, IP Networks and Digital Media, provides a comprehensive overview of the trends and developments in the telecommunications and digital media sectors in this leading market.

The Dutch telecom market has one of the most developed infrastructures in Europe, providing a solid foundation for emerging bundled services offerings. The vast majority of the population uses the Internet, while broadband uptake – among the highest in the world – has benefited from government support as well as competing cable and DSL platforms. FttH networks are also a significant feature of the country’s broadband landscape, with an effective collaboration between national, regional and municipal governments working with industry and academic institutions to ensure that the country maintains its broadband lead into the fibre age. Although the majority of fibred homes lie in a small number of major towns, the sector has been stimulated by consumer demand for fast Internet connections as well as the recognition that such infrastructure is paramount for socio-economic prosperity and development. As such, dozens of smaller networks as expected to be developed by the end of the decade.

The government has hitherto maintained that the market is primarily responsible for the development of broadband infrastructure, though it has focussed on stimulating competition and new service development as well as on public/private partnerships. While the regulator favours an infrastructure facilities-based regulatory regime between telcos and cablecos to stimulate competition, this will need adjustment in relation to the development of FttH infrastructure since there remains insufficient economic viability for multiple fibre networks outside the major cities. As such FttH penetration has not progressed beyond about 15%, since most consumers do not perceive the extra value of higher-cost fibre against the existing excellent cable and upgraded DSL offerings. Stimulating fibre infrastructure is thus a continuing concern as the country moves forward.

Mobile penetration stood at about 130% in early 2010. The success in this sector in coming years will largely rest on strong competition among the network operators and the range of MVNOs which has kept consumer prices low. Operators have shifted their focus on migrating prepaid subscribers to contract plans, and while SMS is the most popular mobile data service the main players have invested in software upgrades to stimulate high-end data services.

The auction of 2.6GHz spectrum licences in mid-2010 saw the introduction of a new player in the mobile market – Ziggo 4 – which will allow the main cablecos Ziggo and UPC to deploy and run telecom and broadcast networks and so complement their existing bundled services (based on fixed-line access) with mobile voice and broadband offers. This is a welcome re-entry for the cablecos in the Dutch mobile market, for both of them had operated MVNO services until scrapping them due to low customer take-up.

Netherlands – key telecom parameters – 2009, 2011

(Source: BuddeComm)

 Market highlights

• The excellent cross-platform infrastructure in the Netherlands has helped to propel the country to the top of the international league tables for broadband penetration. KPN’s DSL network reaches 99% of all homes while cable networks reach 95%. DSL commands about 56% of broadband connections and cable 40%. The DSL base is set to fall in coming years, as the numerous municipal fibre networks increase their geographic reach, and lead to increased customer churn.
• Fibre infrastructure is the country’s strong card, acting as a foundation and stimulus for the country’s budding transactor developments and serving as a model for strategies in other European countries. The regulator was among the first in the world to institute an effective wholesale regime, guaranteeing other telcos with non-discriminatory access to the incumbent’s network at fixed rates. Similar regulation which opened the cable networks to access to third parties will further stimulate competition in coming years.
• Mobile data revenues are comparatively low in the Netherlands, representing only about 5% of total mobile revenue. About half the subscriber bases spend next to nothing on mobile data services, usually because of the cost involved. To address this reticence among consumers mobile operators have introduced flat-fee offers. Stimulated by the plethora of paid applications made available through competing mobile operating platforms, operators expect mobile data to breach 30% of total revenue by the end of 2011.
• Mobile TV was launched in late 2009 by MTVNL, competing directly with KPN’s Mobiel TV service which uses the DVB-H standard. The Netherlands remains one of the few countries where DMB and DVB-H compete with each other. National coverage should be reached by 2015. Although the uptake has been slow, events such as the football world cup and the 2012 Olympics may stimulate mobile TV use and push it as a mainstream rather than frivolous activity.

For those needing high level strategic information and objective analysis on the telecommunications sector in the Netherlands, this report is essential reading and gives further information on:

• Developments in the digital broadcast market, IPTV and VoD;
• Market liberalisation and regulatory issues;
• The impact of the global economic crisis;
• Telecoms operators – privatisation, acquisitions, new licences;
• Internet and broadband development and growth;
• VoIP, IPTV, VoD, digital TV and DTTV;
• Average Revenue per User (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.