Austria Telecommunications Report Q1 2012
Includes 3 FREE quarterly updates
This quarter sees BMI extend its forecasts for Austria's fixed-line, mobile and broadband markets through to 2016 and these have been revised extensively following the disclosure of new baseline historical data from the regulator as well as the latest operating statistics of Austria's largest telecommunications companies. Essentially, the fixed-line market continues to grow (albeit very modestly), the rate of expansion in the mobile sector continues to slow due to market saturation and the fixed and mobile broadband services sectors is seen to be growing less vibrantly than previously reported.
The situation in the broadband sector is most interesting as the regulator has changed its methods for counting the number of mobile broadband customers - thought to be the real engine of growth for broadband in general. The regulator now splits mobile broadband into data-only and smartphone (ie: voice and high-speed data packages). The data-only market grew by just 11.8% in the year to June 2011, yielding a total of 1.583mn connections. The 'smartphone' segment grew by 207.4% to 1.199mn over the same period. It was the smartphone segment - previously left unexposed by regulatory data - that led us to believe that the mobile broadband market was growing much faster than it actually was. With fixed-line broadband connections growing by a more sedate 5.5% year-on-year, we have reined-in our expectations for the coming five years. By 2016, we now expect there to be 4.22mn broadband accesses in all, though we caution that the new LTE services launched in Q411 could yet lead to another surge in growth rates.
Over-reliance on mobile virtual network operators (MVNOs) and heavily-discounted multi-play packages, as well as a growing preference on the part of consumers for inexpensive 'no-frills' postpaid mobile broadband services, means that mobile customer addition rates remain relatively high despite market saturation, yet still do not generate meaningful revenue growth. Price promotions, free minutes and unlimited data allowances also conspire to prevent premium non-voice revenues from growing as strongly as they might. Further mobile termination rate (MTR) reductions also hobble revenue growth. Therefore, we forecast a slightly steeper rate of ARPU decline through to 2016, despite the launch of high-end services over LTE networks. Similarly, we are now less bullish concerning overall mobile subscriber and 3G subscriber growth prospects. BMI forecasts there will be 14.24mn mobile subscribers by 2016, of which 9.05mn will be dedicated 3G connections. We have yet to generate forecasts for LTE, bearing in mind that spectrum and licences have yet to be formalised and the market may consolidate around three operators.
At the time of writing it was being reported that the country's two smallest mobile network operators - Orange and 3 - would combine in a EUR1.4bn merger orchestrated by 3. As surplus network assets and spectrum would be distributed to one or other of the remaining networks and as the combined entity would still be the smallest player, BMI sees no reason why this merger would be blocked. We also think the arrangement to be highly complementary for the companies involved, though we are less bullish about its long term revenue growth outlook.
Finally, it seems increasingly possible that incumbent Telekom Austria could come under new management as minority investors have banded together to give a small group of individuals a considerable stake in the operator. The investors wish to see Telekom Austria return to growth but have not said how they expect to achieve this goal. Meanwhile, the Austrian government remains intent on keeping control of the company. While we acknowledge that a far-ranging review of the business may be needed to ensure its long-term survival, we are less happy that the company could soon be managed by two groups of investors with very different views regarding business development and strategy.
This quarter sees BMI extend its forecasts for Austria's fixed-line, mobile and broadband markets through to 2016 and these have been revised extensively following the disclosure of new baseline historical data from the regulator as well as the latest operating statistics of Austria's largest telecommunications companies. Essentially, the fixed-line market continues to grow (albeit very modestly), the rate of expansion in the mobile sector continues to slow due to market saturation and the fixed and mobile broadband services sectors is seen to be growing less vibrantly than previously reported.
The situation in the broadband sector is most interesting as the regulator has changed its methods for counting the number of mobile broadband customers - thought to be the real engine of growth for broadband in general. The regulator now splits mobile broadband into data-only and smartphone (ie: voice and high-speed data packages). The data-only market grew by just 11.8% in the year to June 2011, yielding a total of 1.583mn connections. The 'smartphone' segment grew by 207.4% to 1.199mn over the same period. It was the smartphone segment - previously left unexposed by regulatory data - that led us to believe that the mobile broadband market was growing much faster than it actually was. With fixed-line broadband connections growing by a more sedate 5.5% year-on-year, we have reined-in our expectations for the coming five years. By 2016, we now expect there to be 4.22mn broadband accesses in all, though we caution that the new LTE services launched in Q411 could yet lead to another surge in growth rates.
Over-reliance on mobile virtual network operators (MVNOs) and heavily-discounted multi-play packages, as well as a growing preference on the part of consumers for inexpensive 'no-frills' postpaid mobile broadband services, means that mobile customer addition rates remain relatively high despite market saturation, yet still do not generate meaningful revenue growth. Price promotions, free minutes and unlimited data allowances also conspire to prevent premium non-voice revenues from growing as strongly as they might. Further mobile termination rate (MTR) reductions also hobble revenue growth. Therefore, we forecast a slightly steeper rate of ARPU decline through to 2016, despite the launch of high-end services over LTE networks. Similarly, we are now less bullish concerning overall mobile subscriber and 3G subscriber growth prospects. BMI forecasts there will be 14.24mn mobile subscribers by 2016, of which 9.05mn will be dedicated 3G connections. We have yet to generate forecasts for LTE, bearing in mind that spectrum and licences have yet to be formalised and the market may consolidate around three operators.
At the time of writing it was being reported that the country's two smallest mobile network operators - Orange and 3 - would combine in a EUR1.4bn merger orchestrated by 3. As surplus network assets and spectrum would be distributed to one or other of the remaining networks and as the combined entity would still be the smallest player, BMI sees no reason why this merger would be blocked. We also think the arrangement to be highly complementary for the companies involved, though we are less bullish about its long term revenue growth outlook.
Finally, it seems increasingly possible that incumbent Telekom Austria could come under new management as minority investors have banded together to give a small group of individuals a considerable stake in the operator. The investors wish to see Telekom Austria return to growth but have not said how they expect to achieve this goal. Meanwhile, the Austrian government remains intent on keeping control of the company. While we acknowledge that a far-ranging review of the business may be needed to ensure its long-term survival, we are less happy that the company could soon be managed by two groups of investors with very different views regarding business development and strategy.
Contents
Executive SummarySWOT Analysis
Mobile .
Fixed-Line/Broadband .
Political SWOT .
Economic SWOT .
Business Environment SWOT
Industry Business Environment Overview
Regional Overview .
Table: Western Europe Business Environment Ratings, Q112 .
Austria .
Industry Forecast
Mobile
Table: Austria Telecoms Sector -- Mobile -- Historical Data & Forecasts .
ARPU .
Table: Austria Telecoms Sector -- Blended Mobile ARPU -- Historical Data & Forecasts (EUR) .
Fixed-Line
Table: Austria Telecoms Sector -- Fixed Line -- Historical Data & Forecasts
Internet .
Table: Austria Telecoms Sector -- Internet -- Historical Data & Forecasts .
Market Data Analysis
Mobile
Net Additions .
Table: Austria Mobile Net Additions, Q311 .
Market Share .
Table: Austrian Mobile Market, Q311 .
Subscriber Mix .
ARPU .
Usage .
3G .
4G (LTE)
Mobile Contract Wins
Table: Austria Mobile Contract Wins
Mobile Operator Data
Table: A1 Telekom Austria .
Table: T-Mobile Austria
Table: 3 Austria
Table: Orange Austria
Mobile Regional Content
LTE-Mobile Broadband
The Machines Are Taking Over
Table: Smart Meter Race Is On .
Country Outlook .
Fixed-Line
Broadband .
Regulatory Development
Table: Austria: Regulatory Bodies And Their Responsibilities .
Competitive Landscape
Table: Key Players - Austria Telecoms Sector .
Table: Selected Operators Financial Indicators, 2007-2010
Company News Alert
Operator Profiles
Telekom Austria
T-Mobile Austria .
Orange .
Hutchison 3G
Market Overview
Mobile
Table: Table: Regional Mobile Penetration Overview
Fixed Line
Table: Table: Regional Fixed-Line Penetration Overview
Broadband .
Table: Table: Regional Broadband Penetration Overview
Glossary
Table: Glossary Of Terms
Methodology
Table: Key Indicators For Telecommunications Industry Forecasts
Telecoms Business Environment Ratings
Table: Ratings Indicators .
Table: Weighting Of Indicators . Skip to top