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

Norway taking a lead in European LTE developments

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

Norway’s telecom market has shown a pronounced shift from fixed-line to mobile networks in recent years: the mobile sector has accounted for the largest part of turnover since 2004, and in 2009 it represented 48% of total turnover, compared to 22% for fixed-line telephony and 24% for the broadband market. The trend is set to continue sharply during the next few years as customers respond to LTE network builds by both Telenor and TeliaSonera.

Nevertheless, the economic downturn which affected the global economy beginning in mid-2008 has resulted in Norway’s telecom market showing lower growth: overall telecom market revenue increased by only 1.9% in 2009, largely on the back of the broadband and mobile sectors. Some recovery is expected in 2010 and 2011 as consumer confidence returns and as government stimulus investment helps develop fibre infrastructure, and so the ability of a growing number of consumers to take advantage of IP-delivered services.

Norway’s broadband penetration is among the highest in Europe, the result of a technologically savvy populace and the efforts of providers to migrate dial-up subscribers to broadband services. Telenor and NextGenTel are the leading ISPs, though a number of smaller operators and resellers are also active. Broadband revenue growth has fallen steadily during the last few years, from 35% in 2005 to 8% in 2009 and an estimated 6% in 2010. In the residential market for DSL, revenue fell 2% in 2009.

Norway has one of the smaller mobile markets in Europe, as befits the country’s small population. Mobile penetration reached about 115% in mid-2010, or 98% when accounting for the use of multiple SIM cards: about 13% of the population have two or more mobile subscriptions. Since 2007, subscriber growth has been driven by the 3G sector, while the number of GSM subscribers has diminished steadily. There are a number of Mobile Virtual Network Operators that resell subscriptions, primarily based on the networks of Telenor and NetCom. TeliaSonera launched the world’s first commercial LTE network, in Oslo in December 2009, demonstrating download peak data rates at up to 150Mb/s. In early 2010 the operator announced plans to expand its LTE network to four cities in Norway, in addition to a further 25 cities in Sweden.

The small broadcasting market is well advanced and has made good progress in developing digital TV services. The largest distributors are Canal Digital Kabel and Canal Digital, both owned by Telenor, followed by Get which distributes broadcasting over cable TV networks, and ViaSat. Revenue from satellite TV represents about 51% of total broadcasting revenue, while that from cable TV was about 35%. Analogue switch off was begun in Stavanger in September 2007 and ended in December 2009.

Key telecom parameters – 2009 – 2011

(Source: BuddeComm)

Market highlights:

• Mobile network operators are able to take advantage of digital dividend spectrum as well as 2.6GHz spectrum for services based on LTE. This development will significantly enhance network capabilities and allow operators to extend their services to rural areas with lower capex, and so help fulfil the government’ national broadband commitments.
• Telenor’s strategy is to build a multi-layered single network, incorporating some 6,500 LTE sites by the end of 2010. This would include 2.6GHz hotspots in city centres, supplemented by 3G-based systems in the 2.1MHz and 1800MHz bands in urban and semi-urban areas. A national backbone network in the 900MHz GSM and 800MHz bands will provide the coverage and service in rural areas.
• Norway’s topography is suited to wireless broadband access, particularly mobile broadband, and the country is a leader in Europe in this sector. In early 2009 the regulator established guidelines for network neutrality to ensure that Internet access remained open and non-discriminatory for all types of communication and content distribution. Most operators have endorsed the guidelines.
• The regulator has managed fibre access to help reduce the cost of deployment, facilitate works through co-ordinated schedules, and provide access to ducts for competing players. As a result of such measures, the number of FttH subscribers approached 200,000 by the end of 2010. Norway is also a pioneer in innovative business models including self-trenching and wholesale arrangements with municipalities.
• Analogue terrestrial networks were digitised between 2008 and 2009, with ASO completed at the end of 2009. Norsk Televisjon, owned by the Norwegian Broadcasting Corporation, TV2 and Telenor Broadcast Holding has a licence to both roll out and operate the DTTV network, while its sister company RiksTV offers channel packages.

This report is essential reading for those needing high level strategic information and objective analysis on the telecom sector in Norway. 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 licence 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.