Sweden Telecommunications Report Q1 2012
Includes 3 FREE quarterly updates
The Q112 update of the BMI report on Sweden's telecommunications market utilises the latest data published by the country's incumbent operator, TeliaSonera, Swedish-based international operator Tele2 and Norwegian incumbent operator Telenor, to the end of September 2011, and data from international conglomerate Hutchison Whampoa's subsidiary Hi3G, to the end of June 2011. The report also draws on the latest mobile, fixed-line and broadband market published by the regulator, PTS, for the period ended June 2011. In addition, this report draws on fixed network retail data published by TeliaSonera, Tele2, and Telenor, as well as cable operator Com Hem, and contains wireline operator data tables at the end of the broadband data analysis section. The focus on converged service operators enables BMI to analyse the interaction of the country's fixed-line, broadband, and pay-TV markets and highlight technology and service-based trends in the sector.
Our forecasts for the mobile, fixed-line, and broadband markets have been revised this quarter to reflect market trends we have derived from operator data covering the first nine months of 2011. With the release of data by PTS for the first six months of 2011, we have also made a significant revision to our historical broadband data and forecast drawing on refined data for mobile broadband. The regulator has released figures for dedicated mobile broadband subscriptions, which has now been incorporated into our broadband forecast. We have also revised our five-year mobile ARPU forecast up slightly on the basis of 9M11 data published by the country's three mobile operators and represents more than 90% of the market by subscribers. As well as revising our forecasts in the Q112 update, we have also extended our forecast period through to YE16 for the first time.
At the end of September 2011, BMI estimates there were 13.276mn subscribers. This estimate is based on subscriber figures published TeliaSonera, Tele2, Telenor and our estimates for Hi3G. Based on this market figure, the mobile penetration rate rose to 140.6% in Q311, up from 137.8% in Q211 as the market recorded 2.2% quarter-on-quarter (q-o-q) growth. The market has continued to exhibit strong growth even with already-high penetration rates, although we continue to forecast a slowdown in growth over the duration of our forecast period.
Incumbent TeliaSonera recorded the strongest growth in Q211 with net additions of 114,000 subscribers, ahead of Tele2, which added 95,000 subscribers and Telenor, which added 38,000. This performance fits the pattern witnessed over 9M11 that has seen TeliaSonera outperform its smaller rivals. BMI calculates that the incumbent accounted for 50.7% of net additions in 9M11, slightly above its market share of 46.6% in Q311. Meanwhile, Tele2 added 142,000 subscribers in 9M11, accounting for 22.9% of net additions and Telenor added 96,000 net additions, equivalent to a 15.5% share of net additions. Finally, we estimate Hi3G to have added 67,000 subscribers in 9M11, a 10.8% share of net additions.
With the three largest operators reporting strong growth in 9M11, and Hi3G in H111, BMI now expects the market to grow by 5.4% in 2011, to bring the penetration rate to 141.3%. This is an upgrade to our forecast from the previous report of 4.9% growth over FY11 to 13.28mn subscribers. Despite this upgrade, we still forecast a slowdown over the duration of our forecast period. From YE11 to YE16 we forecast the market to average 0.8% annual growth, with the market reaching 13.857mn subscriptions by YE16, equating to a penetration rate of 142.8%. While we forecast continued positive growth y-o-y to 2016, we expect it to fail to keep pace with population growth, and as such penetration rates will decline slightly from 2014.
Fixed-line market data for the first six months of 2011 published by PTS reveals an acceleration in the decline of fixed-line subscriptions. The regulator reported a total of 4.618mn fixed-line subscriptions at the end of June 2011, down 5% y-o-y. The decline has quickened from the 4.8% y-o-y decline to June 2010 and 3.5% y-o-y decline to June 2009. We believe the decline in demand is representative of continued demand for alternative services that are both cheaper and more convenient to access, such as mobile and internet services such as Skype.
Notably, while overall demand for fixed lines fell, much of this related to PSTN and ISDN lines, while demand for IP-based telephony increased. PSTN lines and ISDN lines were down by 11.8% and 4.9% y-o-y respectively, while VoIP lines increased by 18.9% y-o-y, becoming increasingly important to the overall market. Looking ahead, with the functionality of fixed-voice easily replicated by alternate technologies, BMI believes that subscriber bases locked into bundled packages with pay-TV, broadband, and even mobile will experience the least erosion.
Sweden's broadband sector is one of - if not - the most advance in the world with high-speed LTE mobile broadband in competition with high-speed fixed services over cable and fibre infrastructure, often bundled together with pay-TV services. Regulatory data for H111 shows a decisive shift to have taken place in the market towards mobile broadband, which grew 24.4% y-o-y, and away from fixed, which declined 0.4% yo- y. However, in terms of total subscriptions fixed connections still dominate, accounting for 62.9% of total subscriptions. It is also important to note that while DSL subscriptions are in decline, down 5.3% y-o-y, faster fibre technologies performed well, up by 17% y-o-y to the end of June 2011. Nonetheless it is in dedicated mobile broadband that BMI expects operators to benefit the most, where TeliaSonera leads with 25.9% market share, but Tele2, Telenor and Hi3G are also benefitting from the market growth.
The Q112 update of the BMI report on Sweden's telecommunications market utilises the latest data published by the country's incumbent operator, TeliaSonera, Swedish-based international operator Tele2 and Norwegian incumbent operator Telenor, to the end of September 2011, and data from international conglomerate Hutchison Whampoa's subsidiary Hi3G, to the end of June 2011. The report also draws on the latest mobile, fixed-line and broadband market published by the regulator, PTS, for the period ended June 2011. In addition, this report draws on fixed network retail data published by TeliaSonera, Tele2, and Telenor, as well as cable operator Com Hem, and contains wireline operator data tables at the end of the broadband data analysis section. The focus on converged service operators enables BMI to analyse the interaction of the country's fixed-line, broadband, and pay-TV markets and highlight technology and service-based trends in the sector.
Our forecasts for the mobile, fixed-line, and broadband markets have been revised this quarter to reflect market trends we have derived from operator data covering the first nine months of 2011. With the release of data by PTS for the first six months of 2011, we have also made a significant revision to our historical broadband data and forecast drawing on refined data for mobile broadband. The regulator has released figures for dedicated mobile broadband subscriptions, which has now been incorporated into our broadband forecast. We have also revised our five-year mobile ARPU forecast up slightly on the basis of 9M11 data published by the country's three mobile operators and represents more than 90% of the market by subscribers. As well as revising our forecasts in the Q112 update, we have also extended our forecast period through to YE16 for the first time.
At the end of September 2011, BMI estimates there were 13.276mn subscribers. This estimate is based on subscriber figures published TeliaSonera, Tele2, Telenor and our estimates for Hi3G. Based on this market figure, the mobile penetration rate rose to 140.6% in Q311, up from 137.8% in Q211 as the market recorded 2.2% quarter-on-quarter (q-o-q) growth. The market has continued to exhibit strong growth even with already-high penetration rates, although we continue to forecast a slowdown in growth over the duration of our forecast period.
Incumbent TeliaSonera recorded the strongest growth in Q211 with net additions of 114,000 subscribers, ahead of Tele2, which added 95,000 subscribers and Telenor, which added 38,000. This performance fits the pattern witnessed over 9M11 that has seen TeliaSonera outperform its smaller rivals. BMI calculates that the incumbent accounted for 50.7% of net additions in 9M11, slightly above its market share of 46.6% in Q311. Meanwhile, Tele2 added 142,000 subscribers in 9M11, accounting for 22.9% of net additions and Telenor added 96,000 net additions, equivalent to a 15.5% share of net additions. Finally, we estimate Hi3G to have added 67,000 subscribers in 9M11, a 10.8% share of net additions.
With the three largest operators reporting strong growth in 9M11, and Hi3G in H111, BMI now expects the market to grow by 5.4% in 2011, to bring the penetration rate to 141.3%. This is an upgrade to our forecast from the previous report of 4.9% growth over FY11 to 13.28mn subscribers. Despite this upgrade, we still forecast a slowdown over the duration of our forecast period. From YE11 to YE16 we forecast the market to average 0.8% annual growth, with the market reaching 13.857mn subscriptions by YE16, equating to a penetration rate of 142.8%. While we forecast continued positive growth y-o-y to 2016, we expect it to fail to keep pace with population growth, and as such penetration rates will decline slightly from 2014.
Fixed-line market data for the first six months of 2011 published by PTS reveals an acceleration in the decline of fixed-line subscriptions. The regulator reported a total of 4.618mn fixed-line subscriptions at the end of June 2011, down 5% y-o-y. The decline has quickened from the 4.8% y-o-y decline to June 2010 and 3.5% y-o-y decline to June 2009. We believe the decline in demand is representative of continued demand for alternative services that are both cheaper and more convenient to access, such as mobile and internet services such as Skype.
Notably, while overall demand for fixed lines fell, much of this related to PSTN and ISDN lines, while demand for IP-based telephony increased. PSTN lines and ISDN lines were down by 11.8% and 4.9% y-o-y respectively, while VoIP lines increased by 18.9% y-o-y, becoming increasingly important to the overall market. Looking ahead, with the functionality of fixed-voice easily replicated by alternate technologies, BMI believes that subscriber bases locked into bundled packages with pay-TV, broadband, and even mobile will experience the least erosion.
Sweden's broadband sector is one of - if not - the most advance in the world with high-speed LTE mobile broadband in competition with high-speed fixed services over cable and fibre infrastructure, often bundled together with pay-TV services. Regulatory data for H111 shows a decisive shift to have taken place in the market towards mobile broadband, which grew 24.4% y-o-y, and away from fixed, which declined 0.4% yo- y. However, in terms of total subscriptions fixed connections still dominate, accounting for 62.9% of total subscriptions. It is also important to note that while DSL subscriptions are in decline, down 5.3% y-o-y, faster fibre technologies performed well, up by 17% y-o-y to the end of June 2011. Nonetheless it is in dedicated mobile broadband that BMI expects operators to benefit the most, where TeliaSonera leads with 25.9% market share, but Tele2, Telenor and Hi3G are also benefitting from the market growth.
Contents
Executive SummarySWOT Analysis
Mobile .
Wireline
Political
Economic .
Business Environment
Industry Business Environment Overview
Regional Overview .
Table: Western Europe Business Environment Ratings, Q112 .
Sweden .
Industry Forecast
Mobile
Table: Industry Forecast - Mobile
ARPU .
Table: Industry Forecast - Mobile ARPU
Fixed Line
Table: Industry Forecast - Fixed-Line
Internet .
Table: Industry Forecast - Internet .
Market Data Analysis
Mobile
ARPU .
Mobile Contract Wins
Table: Mobile Contract Wins .
Mobile Operator Data
Table: Sweden Mobile Market Overview, Q309 - Q311 ('000 unless otherwise stated) .
Table: TeliaSonera Operational And Financial Data, Q309 - Q311 ('000 unless otherwise stated)
Table: Telenor Mobile Operational And Financial Data, Q309 - Q311 ('000 unless otherwise stated) .
Table: Tele2 Sweden Operational And Financial Data 2009-2011 ('000, unless otherwise stated) .
Mobile Regional Content
LTE-Mobile Broadband
The Machines Are Taking Over
Table: Smart Meter Race Is On .
Country Outlook .
Table: Value-Added Services Timeline .
Fixed Line
Broadband .
Market Shares
Wireline Contract Wins .
Table: Wireline Contract Wins .
Wireline Operator Tables
Table: TeliaSonera
Sweden Telecommunications Report Q1 2012
© Business Monitor International Page
Table: Com Hem
Regulatory Development
Table: Sweden: Regulatory Bodies And Their Responsibilities .
Competitive Landscape
Table: Key Players: Sweden Telecoms Sector .
Table: Selected Operator Financial Parameters .
Company News Alert
Gemalto Ready For The Age Of Machines
Table: Recent Contracts: .
Operator Profiles
TeliaSonera AB
TeliaSonera Mobile
Com Hem .
Tele2 AB .
Hi3G Access Sweden
Telenor Sweden .
Market Overview
Mobile .
Table: Regional Mobile Penetration Overview
Fixed Line .
Table: Regional Fixed-line Penetration Overview
Broadband
Table: Regional Broadband Penetration Overview .
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