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Czech Republic Telecommunications Report Q4 2009
Market |
Telecommunications |
Report Type |
Market Research |
Country |
Czech Republic |
Published |
23 September 2009 |
Number of Pages |
89 |
Download |
|
Immediate |
|
Publisher |
Business Monitor International |
Czech Republic Telecommunications: At the end of 2008, mobile market penetration had reached 127.7%
Our Q409 Telecommunications Report for the Czech Republic sees some significant changes to the mobile forecast and mobile market data analysis sections as Telefónica O2 Czech Republic has changed the method it uses to measure SIM inactivity. This has resulted in Telefónica O2 having over 400,000 fewer mobile subscribers in Q108 than previously thought.
At the end of 2008, mobile market penetration had reached 127.7%, and this fell to 127.3% at the end of Q109. The sector is fast approaching saturation, and we have forecast limited growth prospects over the remainder of our five-year forecast period. The drying up of fresh subscriber growth opportunities has pushed the operators to increasingly focus on higher value customers in their efforts to maintain revenue streams. Mobile market leader T-Mobile Czech Republic and second-placed Telefónica O2 are the two operators leading the pursuit of higher value customers and have been concentrating on migrating prepaid customers to postpaid contracts. Third-ranked operator Vodafone Czech Republic had historically been the operator with the highest proportion of postpaid customers in its subscriber mix, but, in the third quarter of 2008, Telefónica O2 wrested this mantle from Vodafone. Both Telefónica O2 and Vodafone had more than half of their customer bases on postpaid subscriptions at the end of Q109, and T-Mobile is fast approaching the 50% mark. The country’s smallest operator U:fon, a CDMA-based operator, saw its market share grow to almost 1% by the end of the first quarter of 2009, and while we are not expecting it to threaten Vodafone for third place in the market, the operator should aid competition, particularly in the mobile internet segment.
The mobile operators have been rolling out a number of mobile internet promotions along with innovative new multimedia content in an effort to drive up demand for mobile data services. While demand does appear to be increasing, consumer willingness to pay for such services is apparently muted. The increased data usage has yet to filter through to ARPU rates, and the continued promotions and tariff improvements are expected to hold back operator ARPU in future.
The country’s fixed-line sector continues to fall, having witnessed a decline of 5.2% in 2008. However, this was a significant improvement on the 16.8% decline seen in 2007. This is in part due to the slowdown seen in the mobile subscriber growth, which is impacting fixed-to-mobile substitution, but the main factor appears to be the greatly improved fixed-line tariffs along with the bundling of fixed lines with services such as broadband, IPTV and mobile telephony.
Subscriber growth in the broadband sector came to 17.6% in 2008, almost half the rate seen in 2007 but still robust given the Czech market’s maturity relative to some of its peers in the region. The Czech Republic has one of the most competitive broadband markets in Central and Eastern Europe, with the incumbent, Telefónica O2, holding around a third of the market. Competition from alternative operators with their own network infrastructure such as UPC Czech Republic and GTS Novera is constantly growing, resulting in falling prices and improved services. In contrast to much of the rest of the region, Telefónica O2’s wholesale and unbundling (LLU) business is beginning to stumble as alternative operators increasingly use their own network infrastructure. Going forward, further improvements to service quality and download speeds as well as the launch of advanced services such as Telefónica O2’s IPTV service, O2 TV, are expected to be at the forefront of the broadband sector’s development.
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