2014 Switzerland - Telecoms, IP Networks and Digital Media

Swisscom makes progress towards FttP goal for end-2015

Although not a member of the EU, Switzerland’s economic integration has meant that its telecom market deregulation has followed the EU’s liberalisation framework, including recent regulations on international roaming.

Switzerland has Europe’s highest broadband penetration rate. The country benefits from universal DSL infrastructure and an expansive cable broadband network, with effective cross-platform competition. The DSL sector is dominated by Swisscom’s retail offerings, while UPC Cablecom also offers cable broadband in most cities and towns, and its extension of 250Mb/s services since 2014 has spurred Swisscom to intensify its VDSL and FttP network rollouts in a bid to remain competitive. To this end, Swisscom has set aside for fibre networks a significant proportion of its planned CHF8 billion infrastructure investment to 2015.

There has been a government focus on broadband deployment of ‘ultra-fast’ broadband, or that defined as at least 100Mb/s. This depends on the growing footprint of fibre, LTE and DOCSIS technologies. By the 2020, DOCSIS and fibre are expected to deliver 100Mb/s services to at least 80% of the population, while LTE should provide national coverage by that date.

The mobile market has undergone a number of changes in recent years, with the Orange Switzerland being acquired by NJJ Capital in February 2015, Sunrise being acquired by a private equity firm which completed an IPO in early 2015, and with the main cableco UPC Cablecom entering the mobile market as an MVNO, thus being able to provide a quad-play bundle and so compete more effectively with Sunrise and Swisscom. Mobile penetration is on a par with the European average while mobile data use among consumers has increased rapidly in line with the expended reach of technologies including HSPA and LTE. Customer use of mobile data services is helping to offset declining ARPU and lower traffic in the SMS segment as consumers adopt a range of OTT messaging services. The regulator has encouraged operators to share LTE infrastructure, so reducing investment costs, while all MNOs have launched commercial LTE services and have extended LTE-A technologies to increase data throughput. By early 2015 Orange had upgraded much of its LTE infrastructure to LTE-A, offering data at up to 300Mb/s. In addition, spectrum assets held by licenses have been successfully refarmed following the 2012 auction, so consolidating holdings. A further refarming exercise affecting the 2100MHz band is due in 2016.

Key developments:

• Sunrise completes IPO;
• regulator redefines USO minimum broadband speed at 2Mb/s;
• five key telcos set up network neutrality framework;
• regulator measures eliminate FttP network duplication, Swisscom expands FttP network construction sharing contracts, plans for one million households to be connected to FttP by end-2015, launches 1Gb/s service;
• Laussane to be entirely connected with FttP by 2017;
• Swisscom contracts Huawei for FttS network upgrade;
• UPC Cablecom expands network reach by acquisitions of several municipal cablecos;
• Swisscom trials three-band LTE-A offering data at up to 450Mb/s;
• MNOs join to develop NFC-based payment platform;
• Orange Switzerland sold by Apax Partners to NJJ Capital for CHF2.8 billion;
• multiple band spectrum auction raises CHF996 million;
• Swisscom launches M2M services;
• UPC Cablecom provides backhaul services for Orange’s LTE network;
• regulator’s 2014 market report;
• telcos’ operating and financial data to Q4 2014;
• recent market developments.

Companies mentioned in this report

Swisscom, Sunrise, UPC Cablecom, Swisscom, Sunrise, Cybernet, UPC Cablecom, Hospitality Services, Swisscom, Sunrise, Cybernet, UPC Cablecom, Hospitality Services; Swisscom trials three-band LTE-A offering data at up to 450Mb/s; MNOs join to develop NFC-based payment platform; Orange Switzerland sold by Apax Partners to NJJ Capital for CHF2.8 billion; multiple band spectrum auction raises CHF996 million; Swisscom launches M2M services; all MNOs launch LTE launch; Cablecom provides backhaul services for Orange’s LTE network; regulator’s market reports; telcos’ operating and financial data to Q4 2014; recent market developments.