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

Belgium’s spectrum auctions clear the path for LTE in 2012

BuddeComm’s bi-annual publication, Belgium - Telecoms, IP Networks, Digital Media and Forecasts, provides a comprehensive overview of the trends and developments in the telecommunications and digital media markets in one of Europe’s medium-sized and more complex telecom markets.

Certain sectors of Belgium’s telecom market, such as broadcasting, are influenced by its larger neighbours France and the Netherlands. The country’s population is split between two main language groups, Flemish and Walloon, with an additional strong German influence. This fragmentation affects regulatory policies. Being the base for several administrative centres of the European Union, Belgium has attracted considerable investment from multinationals, while the significant transient population has also contributed to the high mobile penetration.

Belgium has not kept up with the top performers in the European ranking of broadband penetration. Retail prices for internet access remain relatively high, despite competition enabled by LLU. Belgacom’s VDSL2 infrastructure is now open to competitors but thus far there are few ISPs making use of the wholesale offer.

The broadband sector is likely to be a key to propping up telecom market growth during the next few years, largely from network upgrades undertaken by Belgacom and the cablecos which has resulted in rapidly expanding bundled services offerings. Belgacom is continuing to roll out its FttC network (aiming to cover more than 70% of households), though FttH is as yet marginal and only affects a small number of premises. The regulator has nevertheless been active in promoting FttH, which is a cornerstone of the government’s Digital Action Plan 2010-2015. In particular the regulator aims to develop a well-performing fixed national network underpinned by legislative and administrative interventions regarding the rights of way for competitors to ducts and buildings. This infrastructure is complemented by mobile broadband: to this end, a fourth 3G licence was awarded in 2011 while an imminent auction for 2.6GHz spectrum has attracted interest from operators hitherto not involved in Belgium’s telecom landscape.

The total turnover of the Belgian telecom sector has risen steadily in recent years, despite the difficulties faced by consumers and operators alike in 2009 and 2010 as a result of the economic crisis which led to lower spend. Effective competition between Belgacom and the cablecos has also resulted in cheaper bundled service offerings. Revenue from the fixed market continues to fall slightly, year-on-year, while that from mobile markets fell sharply in 2009 before recovering since then on the back of greater spend on mobile broadband services. This pattern is expected to continue in 2011 and 2012 as consumer confidence returns and economic conditions improve. Despite liquidity issues, investment in telecom networks – partly encouraged by government stimulus funds – has grown year-on-year. Alternative operators have invested the largest proportion of the total.

Digital TV penetration reached about two-thirds of households by early 2011. Growth since 2007 has largely been due to the inclusion of DTV in bundled offers. Cable TV is the dominant pay-TV platform and is available to about 90% of households. However, less than 10% of homes subscribe to digital packages, all of which are premium services – there is a large supply of analogue basic channels, and premium pay-TV is therefore hard to sell to subscribers. Thirty-three operators serve the market, almost all owned by one of Belgium’s financial holding companies. Previously, these inter-community cable network owner/operators were the key players in the cable-TV scene. However, since 2000 broadband providers – Telenet and UPC in particular – have become the highest profile players.

Key telecom parameters – 2010; 2012

(Source: BuddeComm)

Market highlights:

• Cable TV reaches 90% of households, and most networks have been upgraded to digital. The sector has been considerably consolidated in recent years, with Telenet having purchased Interkabel and with Alé-Brutélé and other Walloon cable companies combining forces in Brussels and Wallonia under the VOO brand. UPC is the other major player. Extensive DOCSIS3.0 deployment, providing up to 120Mb/s services, has meant that cable broadband now outperforms DSL both in download speed and in subscriber growth. This development is crucial for Belgium to progress with its networked economy, enabling customers to access network applications such as remote medical services, 3D TV, VoD, mobile TV, fast file sharing, synchronisation and government online services.
• The imminent auction for spectrum in the 2.6 GHz band will enable licensees to expand their LTE commercial services, expected to be launched during 2012. This will bolster the country's broadband availability is less densely populated areas in coming years.
• The fourth 3G licence awarded to Telenet Tecteo Bidco in late 2011 has enabled the main cable player to enter the competitive mobile market. The operator will also acquire spectrum in the 900MHz and 1800MHz bands This will substantially boost the capabilities of networks to deliver high-end mobile data services in coming years.
• More than a third of broadband subscribers have data speeds of 10Mb/s or higher – one of the highest proportions in the EU – while a fifth have a speed equal to or above 30Mb/s: in this respect Belgium is among the leaders in the EU for very-high speed lines.
• Fibre networks are not widely available in Belgium but the technology is being targeted in multi-tenant buildings in both the residential and commercial markets. The government’s SuperFastBelgium scheme, based on a national FttH network, is being brought to fruition through regulatory measures obliging Belgacom to provide competitors access to its fibre network, as well as favourable conditions on duct access and the installation of ducts above ground will reduce engineering costs by up to 80%. This will help extend the reach of fibre beyond the major cities.

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