2011 Austria - Telecoms, IP Networks, Digital Media and Forecasts

Austrian MNOs relying on FttX infrastructure for LTE deployment

BuddeComm’s biannual 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 a key central European market. The report provides regulator market data to Q3 2011 as well as operator data to the end of 2011 and market developments into 2012.

Although Austria’s telecom market has been progressively liberalised since the early 1990s, the incumbent Telekom Austria has remained the dominant player in all sectors despite Austria having one of the most competitive markets Europe. In the mobile sector, all network operators are international players, with the incumbent’s A1 having a particularly strong presence in Central and Eastern Europe. A significant developed in early 2012 was the acquisition of Orange Austria by the fourth-placed operator 3 Austria. This consolidation asserted 3 Austria’s commitment to the market but also reflected the fiercely competitive environment which since 2006 has seen the number of MNOs fall from five to three.

Revenue from the telecoms sector has declined steadily since 2006. The mobile sector (including mobile broadband) has become the largest in terms of revenue, representing 65.3% of the total, while fixed-line telephony has a 22.3% share and fixed-line broadband a 9.5% share. The trend in declining revenue is likely to continue during the next few years as operators adjust to competition and regulatory measure. In the mobile sector some respite is expected after 2013 as consumers make greater use of high-end mobile data services. The regulator reported that in the second quarter of 2011 total telecom sector revenue was about €1.14 billion (unchanged from the previous quarter). Revenue from the mobile sector increased 1.2% quarter-on-quarter, to some €750 million or about two-thirds of total revenue. Revenue from voice telephony fell 2.8% while that for broadband fell 1.7%.

Infrastructure investment increased substantially in 2010, to €635 million compared to €503 million in 2009. Of the total investment of €693 million, some 7.2% went to spectrum auctions to provide for LTE and next-generation mobile services. Further investment in both spectrum and infrastructure is expected during the next two to three years following the imminent auction of available spectrum in several bands.

Digital switchover in Austria was completed in mid-2011 sequentially by region. Only 5% of TV subscribers make use of the service, while the remainder rely on cable and satellite reception. During the switch-off phase additional space was made available for a further six multiplexes, some of which will be based on the new DVB-T2 technology which can provide for more channels. Multiplex D has been reserved for mobile broadcasting.

Key telecom parameters – 2010; 2012

(Source: BuddeComm)

Market Highlights

• The regulator’s auction of remaining spectrum in the 800, 900 and 1800MHz bands in late 2012 will enable MNOs to improve their services in rural areas, and expand the availability of LTE networks. The auction follows that in late-2010 for 2.6GHz frequencies which required MNOs to deploy LTE to 25% of the population by the end of 2013. These developments will dramatically improve broadband connectivity in coming years.
• Fibre infrastructure has been slow to gain traction in Austria, though considerable improvement is expected in coming years, albeit from only a small number of players. Telekom Austria has expanded its FttH infrastructure in Vienna, and by early 2011 around 52% of households were passed by its GigaNet infrastructure. The company has a target to connect 2.3 million homes by 2013.
• All MNOs have advanced plans for LTE roll-outs, with T-Mobile offering services in four cities by early 2012. Both T-Mobile and Telekom Austria are utilising existing FttX infrastructure to provide data backhaul for their LTE networks.
• Despite ASO having been completed in mid-2011, DTTV has only a small share of the TV market. The satellite TV sector is particularly strong in Austria, with the Astra system the market leader: about two thirds of digital TV households are Astra subscribers. Among DTH households, digital satellite has an 89% market share, compared to 39% for digital cable networks. The market has sufficient room to expand, with Austriasat introduced as a new competitor in late 2010.

This report is essential reading for those needing high level strategic information and objective analysis on the telecom sector in Austria. 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 new spectrum auctions and awards;
• 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.