2013 Slovenia - Telecoms, IP Networks, Digital Media and Forecasts

Auctions in 2013 and 2014 address spectrum shortfall for LTE

BuddeComm’s annual publication, Slovenia- Telecoms, IP Networks, Digital Media and Forecasts, provides a comprehensive overview of the trends and developments in the telecommunications and digital media sectors of one of Europe’s markets. The report includes the regulator’s 2012 market report, telcos’ financial and operating data to Q1 2013 and market developments to mid-2013.

Economic background

Slovenia joined the EU in 2004 and adopted the euro three years later. The country lagged behind its peers in privatising state enterprises, and the state still controls about half of economic output. The global financial crisis negatively impacted Slovenia’s economy, exacerbated by its reliance on exports, particularly to its main trading partners Germany and Italy. The economy contracted by 8% in real terms during 2009, and though GDP grew 1.4% in 2010 is has since faltered, shrinking by 0.2% in 2011 and worsening to an expected 1% fall for 2012 before showing slight recovery in 2013. The government hopes to cut the budget deficit to the EU-approved maximum of 3% of GDP by 2015, from 7.9% anticipated for 2013. The government is aiming to sell of its interest in 15 concerns, including the dominant telco Telekom Slovenije in a bid to avoid an EU-funded bailout.

Telecom market overview

Telecom market revenue has fallen steadily since the high point of 2008. The market remains dominated by Telekom Slovenije though its lead in all sectors is gradually falling. In the FttH sector the market leader is T2: its advantage is partly due to its own network build, but also the result of regulated access to Telekom Slovenije’s network. In the fixed-telephony market the incumbent retains a high market share compared to the EU average, though the collapsing number of PSTN lines is eroding this share as customers migrate to VoIP. The IPTV sector is particularly strong, with the country having the highest IPTV penetration in the EU. 

Identified risks for telcos include subdued growth prospects and the continuing difficulty in accessing finance. The economic crisis initially affected the construction of fibre networks, leading to the main operators largely halting their investment and programs in 2009. To stimulate the sector, the regulator complemented its unbundling copper infrastructure measures to include unbundling the fibre loop as well. Investment has since grown, largely channelled to fibre networks and upgrading mobile networks with HSPA and LTE technologies. The auction of spectrum in mid-2013, a precursor to a larger auction expected in 2014, was aimed at addressing the shortfall in available frequencies for MNOs to develop their LTE plans.

Key telecom penetration parameters – 2010; 2013

(Source: BuddeComm)

Market Highlights

• Telekom Slovenije contract to Ericsson to multi-band LTE and VoLTE services will extend LTE provision to major cities in Slovenia by 2014.
• The number of SMS sent in the first quarter of 2013 grew 27% year-on-year, largely due to the large number of messages bundled with mobile plans, as well as the perception that an SMS message is a cheaper way to communicate than voice calls.
• Telekom Slovenije, Si.Mobil and Tušmobil were awarded licences for additional frequencies in the 1800MHz and 2100MHz bands in mid-2013. Suitable for LTE-based services, the allocations addressed the shortfall in available spectrum which had thus far held back commercial LTE launches.
• Telekom Slovenije offers FttH services, providing speeds of up to 1Gb/s. The operator aims to reach 70% household coverage with FttH by 2015. Priority for FttH deployments is given to new buildings and regions where demand for high transfer speeds is highest.
• In terms of operators, Telekom Slovenije has seen its market share of broadband subscribers fall steadily in the face of competition, to about 38% by mid-2013 compared to 45% in 2009. The other major players include T-2, Telemach and Amis.
• The state’s sale of the incumbent operator was rekindled in mid-2013. The government needs to raise about €3 billion annually in debt issuance to manage its finances and avoid an EU-funded bailout.

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