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

Telenor completes mobile network upgrade in preparation for LTE

BuddeComm’s 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, including the regulator’s market data for the first half of 2011 and operator data for the third quarter of 2011.

Norway’s telecom market has shown a pronounced shift from fixed-line to mobile networks in recent years, a trend which is set to continue during the next few years as customers take up services made available through LTE networks being built by both Telenor and TeliaSonera.

The economic downturn which affected the global economy, and which has morphed into a European crisis undermining regional economies, has resulted in Norway’s telecom market showing lower growth, generally supported by the broadband and mobile sectors. Stronger recovery is expected in 2011 and 2012 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.

Up to and including 2003 fixed telephony accounted for the largest part of turnover, being overtaken by mobile telephony since 2004. Overall retail sales fell 0.7% in the year to June 2011, compared to a 2.2% growth a year earlier. Revenue for fixed telephony fell 13% (the sharpest fall since 2006), while mobile telephony revenue increased by only 0.4% and internet subscription revenue grew 3.6%. The share of mobile broadband to overall internet revenue reached 4.1% while overall internet revenue now represents 24.3% of total telecoms revenue. Mobile telephony represents about 54% of total revenue while fixed telephony has seen its share fall to 18%

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 7% in 2010. In the residential market for DSL, both revenue and the subscriber base fell in 2010 as customers migrated to mobile broadband and fibre alternatives.

Norway has one of the smaller mobile markets in Europe, as befits the country’s small population. High mobile penetration, at about 119%, is largely due to use of multiple SIM cards. Since 2007, subscriber growth has been driven by the 3G sector, while the number of GSM subscribers has diminished steadily. There are 26 providers of services, including a number of MVNOs that resell subscriptions, primarily based on the networks of Telenor and NetCom. TeliaSonera launched the world’s first commercial LTE network, in Oslo in late 2009, demonstrating download peak data rates at up to 150Mb/s. The operator has expanded its network to a number of cities, carving up the northern and southern regions of the country between its two main hardware suppliers Huawei and Ericsson.

The small broadcasting market is well advanced and has made good progress in developing digital TV services. The largest distributor is Canal Digital, owned by Telenor, followed by Get which distributes broadcasting over cable TV networks, and ViaSat. Revenue from satellite TV represents about 40% of total broadcasting revenue, while that from cable TV was almost 37%. Analogue switch off was completed in late 2009, paving the way for the reassignment of sub-1GHz spectrum for mobile broadband services.

Table 1 - Key telecom parameters – 2010; 2012

(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. This includes 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 reached 240,000 by early 2011. 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 (NTV), owned by the Norwegian Broadcasting Corporation (NRK), 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 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.