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2011 Czech Republic - Telecoms, IP Networks, Digital Media and Forecasts

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Last updated: 6 Dec 2011 Update History

Report Status: Archived

Report Pages: 71

Publication Overview

This report provides a comprehensive overview of trends and developments in the Czech telecommunications market. The report analyses the mobile, Internet, broadband, digital TV and converging media sectors. 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);
  • Convergence and digital media;
  • 3G subscriber and mobile ARPU forecasts to 2015;
  • Broadband market forecasts for selective years to 2020.

Key developments:

Wireless broadband remaining popular; Vodafone launches VDSL2 services; RIO Media building one of the largest FttH networks; BPL in Prague a success through SmartCity Platform; total broadband subscriber base approaches three million; T-Mobile, O2 and Vodafone alliance to promote m-payment services; T-Mobile extends HSPA+ coverage to most of the population; Telefónica and T-Mobile sign six-year 3G network sharing agreement; mobile market revenue grew 1.9% in 2010 to CZK45.2 billion; Telefonica approaches 66% 3G population coverage through network sharing deal with T-Mobile; Vodafone looks to upgrade half of its 3G network with 21.6Mb/s HSPA+ by March 2012; regulator decides to close analogue NMT network; mobile ARPU continues to fall; Telefónica launches joint network monitoring centres for operation in Germany and Slovakia; First DDTV multiplex reaches 100% coverage; ASO on CT1 and CT2 nears completion; Ceske Radiokomunikace buys CDG to control three muxes; SkyLink bought by M7 Group; DVB-T2 trials underway; CRa merges with majority shareholder MCCH; VOLNY transfers DSL subscribers to O2 and sues for CZK4 billion; stagnant economy since 2008 affecting consumer spend on telecom services: telecom revenue falls 4.8% in 2010; recovery in 2011 with GDP to grow 1.6-2.2%; regulator’s 2010 annual report and market update to September 2011; operator data to September 2011.

Companies covered in this report include:

Telefónica Czech, T-Mobile, GTS Czech, Èeské Radiokomunikace, T-Systems Czech Republic, BT, ÈD-Telematika, ÈEZ ICT Services and UPC Èeská republika, Vodafone Czech, MobilKom, DigiTV, CRa, CDG, Nej TV, RIO Media.

Researcher:- Henry Lancaster
Current publication date:- December 2011 (10th Edition) 

Executive Summary

Anticipated GDP growth expected to slow down decline in telecom revenue in 2012

BuddeComm’s quarterly publication, Czech Republic - 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 most dynamic markets struggling to overcome larger economic difficulties. It includes the regulator’s 2010 annual report market data and updates to September 2011, as well as operator data to the third quarter of 2011.

The Czech economy has been affected by the global financial turmoil due to weakening demand for its export products. The Czech National Bank (CNB) estimated that the economy will have stagnated for four years before showing some recovery by the end of 2011: the economy is roughly at the level it was at the end of 2007. The recovery process is jeopardised by inflationary pressures caused by a growth in costs for oil, food and raw materials, counteracted by the strengthening Czech currency. The CNB predicted that the Czech GDP would grow 1.6% year-on-year in 2011, though the Finance Ministry has suggested a 2.2% growth. Nevertheless, telecom sector revenue fell by nearly 5% in 2010, year-on-year, and though a brighter economic forecast promises higher consumer spend, regulatory measures will continue to dampen revenue for operators.

The Czech Republic joined the European Union (EU) in 2004, and thereafter the country’s telecoms market was reformed in common with EU Directives. This included full market liberalisation, which resulted in alternative operators being able to launch services competing with the incumbent, then known as Cesky Telecom and since branded as Telefónica O2 CR.

The fixed broadband market continues to show significant growth in the wake of falling prices. Fixed wireless broadband remains popular, having shown initial growth while nascent DSL and cable networks were being built: wireless broadband usage is among the highest in the EU. The fibre-to-the-home (FttH) sector is also experiencing rapid growth, while broadband access has laid the foundation for a developing internet Society, with a range of online services and activities taking place.

The Czech Republic’s media market is evolving under the weight of digital TV and convergence trends, with over half the population receiving TV services digitally. The uptake of IPTV services is growing on the back of more affordable broadband access while the cable TV market has undergone consolidation to create a major player with sufficient size to compete effectively against Telefónica O2 CR. Analogue switch-off is continuing on a regional basis before the process is completed at the end of 2012. Digital satellite TV services are widely available from a number of competing platforms.

The well developed mobile market has among the highest SIM card penetration levels in Eastern Europe, far above the EU average. With mobile voice markets saturated and opportunities for new mobile subscriber additions minimal, the three established mobile network operators have focused on developing ARPU, which have fallen as a result of market competition and regulatory measures: strategies include migrating prepaid users to contract plans and encouraging take up of mobile broadband services. To this end considerable investment has been made in upgrading HSPA networks across the country. MNOs have also expanded into offering fixed line voice and data services.

Key telecom parameters – 2010; 2012

Sector

2010

2012 (e)

Broadband:

Fixed broadband subscribers (million)

2.30

2.79

Fixed broadband penetration rate

22%

26%

Mobile broadband subscribers (thousand)

505

760

Subscribers to telecoms services:

Fixed-line telephony (million)

2.05

1.85

Mobile phone (million)

14.33

14.60

Mobile SIM penetration (population)

139%

144%

(Source: BuddeComm)

Market Highlights

  • T-Mobile has expanded its HSPA+ coverage, reaching 43% of the population (97 cities and larger municipalities, as well as some 230 smaller towns) by mid-2011. National coverage is expected by 2013, delivering capable mobile broadband to rural areas.
  • The regulator’s decision to switch off analogue mobile services based on the NMT system will allow the spectrum to be reassigned. Telefónica stopped using NMT for voice services in 2006, instead using the band to support for CMDA data transfer for mobile broadband.
  • Despite difficulties in other European markets, Telefónica, T-Mobile and Vodafone are developing a DVB-H mobile TV network in the Czech Republic based on trials undergone since 2008.
  • The alliance among MNOs to promote m-payment services, using a joint ‘Plat mobilem’ (Pay by Mobile) logo, should rapidly expedite market developments in coming years given the propensity for Czechs to use cash rather than credit cards for most purchases.
  • Vodafone CR launched VDSL2 services in mid-2011, delivering up to 25Mb/s to a third of the population.
  • In 2010, total revenues from electronic communications fell 4.8% year-on-year to CZK126.5 billion. The largest fall was in the mobile sector, which fell 7.9% to CSK74.4 billion. Nevertheless, overall investment in networks and telecoms services increased 4.1% in 2010 to CZK 15.02 billion. Respectable growth in GDP expected for 2011 and 2012 promises some recovery in consumer spend and telecom sector revenue.
  • With the switch to DTTV progressing, the first multiplex now reaches nearly 100% of the population, the second multiplex covers over 89%, the third over 85% and the fourth 25% (concentrated on Prague, Plzen, Brno and Ostrava).

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

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