Annual Economic Report 2013
Driving the digital Future
European Telecommunications Network Operator s’ Association publication November 2013
2
3
Contents
Introductions
6
Market trends
10
Revenue and service trends
12
Investment trends
18
Broadband
20
Next generation access networks (NGA)
23
New broadband services
24
Ranking in European and World Top companies
26
Annual Economic Report
ETNO
4 European Telecommunications Network Operators’ Association
Introducing ETNO ETNO has been the voice of Europe’s telecommunications network operators since 1992. With their investment and innovation in new e-communications services and networks, ETNO member companies create economic growth & jobs and improve the daily lives of citizens. ETNO’s 37 member companies and 12 observers* from Europe and beyond represent a significant part of total ICT activity in Europe. They account for an aggregate annual turnover of more than 600 bn EUR and employ over 1.6 million people. ETNO companies are the main drivers of broadband and are committed to its continual growth in Europe. ETNO members also hold new entrant positions outside their national markets. ETNO brings together the main investors in innovative and high-quality e-communications platforms and services, representing 70% of total sector investment , 71% of total revenues of telecom services and 77% of European jobs in the sector. ETNO strongly contributes to shaping a favourable regulatory and commercial environment for its members to continue to deploy innovative and high quality services and platforms for the benefit of European consumers and businesses.
* December 2012
ETNO
Annual Economic Report
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ETNO members’ presence in EU and neighbouring markets
ICELAND
FINLAND
ETNO represents 38 operators in 35 countries*, far beyond the boundaries of the European Union.
SWEDEN
NORWAY
ETNO members’ total revenue from European operations amounted in 2012 to approximately 202 bn EUR.
ESTONIA
LATVIA
55 % of the turnover originates from fixed line operations, and 45 % from mobile services.
LITHUANIA
DENMARK
First estimates for 2013 would lead to revenues of 189 bn EUR with close to 56% from fixed operations.
IRELAND
POLAND
UNITED KINGDOM NETHERLANDS
BELGIUM LUXEMBOURG
CZECH REP.
GERMANY
SLOVAKIA
AUSTRIA
LIECHTENSTEIN
ROMANIA
HUNGARY
FRANCE
SWITZERLAND SLOVENIA
CROATIA BOSNIA-HERZEGOVINA
BULGARIA
ITALY
F.Y.R.O.M
(Former Yugoslav Republic of Macedonia)
ALBANIA
TURKEY
PORTUGAL
GREECE
SPAIN
CYPRUS
MALTA
1 member
3 members
2 members
4 members & more
* ALBtelecom (Albania), Belgacom, BH Telecom (Bosnia and Herzegovina), Telefónica O2 Czech Republic, Croatian Telecom, Cyprus Telecommunications Authority (CYTA), Deutsche Telekom, Entreprise des Postes et Télécommunications Luxembourg, eircom, Elisa Communications Corporation (Finland), Elion (Estonia), Finnet Group (Finland), France Telecom, Go (Malta), Invitel (Hungary), Koninklijke KPN, Lattelecom (Latvia), Makedonski Telekom (F.Y.R of Macedonia), Magyar Telekom (Hungary), OTE (Greece), Portugal Telecom, Romtelecom (Romania), Síminn (Iceland Telecom Ltd.), Slovak Telekom, Societatea Nationala de Radiocomunicatii (SNR-Romania), Swisscom, TDC, TDF (France), Telecom Italia, Telecom Liechtenstein, Telefónica, Telekom Austria, Telekom Slovenije, Telekomunikacja Polska, Telenor (Norway), TeliaSonera (Sweden-Finland), TEO (Lithuania), Türk Telekomünikasyon (Turkey), Vivacom (Bulgaria).
Annual Economic Report
ETNO
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Introduction Introduction by Daniel Pataki, ETNO Director
Back in 2012 ETNO released the AT Kearney report entitled “A Future Policy Framework for Growth” which pointed out areas for growth upon which ETNO association members have based their positions over the last year. These areas are: pricing of core services and networks and new NGA/LTE infrastructure; content distribution; adjacent businesses; and efficiency and scale measures, including consolidation. Shortly thereafter, in July 2012 Vice-President Kroes announced a new policy and regulatory environment for broadband investment. This was a major step forward for building investor trust and as such, ETNO welcomed the development. In 2013, the debate around the challenges faced by the telecoms sector and the need for regulatory reform intensified. In order to contribute constructively to this discussion, ETNO along with the Boston Consulting Group, embarked on a study to assess the underlying reasons for these sector challenges and proposed a comprehensive program to get the Digital Agenda back on track. The comprehensive study, entitled “Reforming Europe’s Telecoms Regulation to Enable the Digital Single Market”, quantifies the impact of the required measures. Change needs to happen otherwise the sector will keep course with its annual
ETNO
Annual Economic Report
2% drop in revenues. The report estimates that the shortfall in investment needed to meet EU Digital Agenda targets for broadband coverage and penetration will aggregate between 110 bn EUR and 170 bn EUR, leading to an enormous missed opportunity for the broader EU economy: up to 750 bn EUR in GDP growth and as many as 5.5 million jobs. A pro-investment policy environment and a consolidated regulatory framework are needed in order to allow the European telecoms industry to contribute to growth and jobs in the EU. The European Commission announced its Connected Continent proposals in September of this year, combining a Regulation, Communication and Recommendation. This is proof that the telecoms industry holds centre-court and policy makers recognise that it is time to push Europe to the front of the competitive edge and regain its status as a global digital leader. As the main ICT sector association in Europe and representing those companies that invest the most in EU telecoms/ICT infrastructure, ETNO drives those initiatives that provide a sustainable Internet ecosystem and the most efficient use of the networks, to the benefit of all. As such, ETNO will be heavily engaged in the legislative process throughout 2014 and I look forward to working in close co-operation with our members on this important new chapter for our sector.
Daniel Pataki, ETNO Director
7
Introduction by Luigi Gambardella, ETNO Executive Board Chair
Do you remember the days when Europe led the way for technology that served as the backbone of the digital economy? Today the Asian and North American markets enjoy that position with fibre access penetration that is up to 20 times higher than that of Europe. Obviously, their markets are larger and there are different dynamics at play, but there is still real reason for concern and we cannot afford to continue to lag behind. Cloud computing, smart grids, the Internet of Things, big data, e-Government, e-Education and e-health all rely on fast connection speeds. However, in order to achieve such velocity, innovation is needed and, more importantly, a strong economy to provide such resources. At the moment, Europe is not delivering on these fronts. Up to 750 bn EUR in GDP growth and as many as 5.5 million jobs in the economy of the EU are at risk by 2020 because of the lack of next generation network investment. Over the last five years, investment in the telecoms sector has been falling by 2% each year for almost 5 years now. By 2020, we estimate that that the shortfall in investment needed to meet EU Digital Agenda targets for broadband coverage and penetration will be between 110 and 170 bn EUR, leading to an enormous missed opportunity for the broader EU economy. Meanwhile, investment in international telecoms markets is increasing. Europe must fight to keep a seat at the global competition table!
President Barroso has recognised that the telecoms sector is far from being fully integrated. Even if we have an internal market for physical goods, we still have 28 national digital markets. We need a winning industrial strategy which recognises that the furious pace of technological change means that only substantial and rapid deregulation of basic telecoms markets promises a real solution. We also need to take a full view of the ICT value chain, including content provision, in a technology agnostic manner and with a differentiated geographic lens, based on the service provided. I often talk about level playing fields and this is because right now we are trying to play the game on a slope littered with regulatory mines and moving goal posts Therefore, we see an urgent need to update the overall European regulatory regime, to ensure a predictable and consistent approach across communications services to the extent that they are comparable and substitutable. In this way, consumers will be able to make informed choices between providers competing on a level playing field. We have to think ahead.
Luigi Gambardella, ETNO Executive Board Chair
Annual Economic Report
ETNO
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Introduction Introduction by IDATE ETNO represents an important part of the European telecoms industry, with its members accounting for 71% of all service revenues of telecom services. ETNO weighs even more heavily in terms of employment. More than 77% of the jobs in the sector in Europe are created by ETNO member companies.
As in the previous years, this edition of ETNO's Annual Economic Report will present the main figures on the evolution of European telecom markets and shed a light on the role played by ETNO members in these markets. The growing number of accesses and the diversification of usages show that telecommunication services continue to be high in demand and mobile and data services are indeed more popular than ever before. However, despite the positive evolution of demand, 2012 has seen a continuation of the negative growth trend that has affected the region's telecom revenues since 2009. Overall revenues of telecom services were 1.8% lower in 2012 than the year before and reached 273.8 bn EUR. Driven by rising demand for data, mobile services accounted for the biggest share of this figure with 143.3 bn EUR. Yet, despite the success of wireless broadband this figure is 1.7bn EUR lower than the year before. Like mobile, fixed Data and Internet services have surpassed fixed telephony in terms of revenue. This segment turns out to be the only one that continues to show positive growth with revenues attaining 71.5 bn EUR in 2012; up from 69.8bn EUR the year before. As expected, fixed telephony continued on its long-term downward evolution. Under pressure from VoIP and mobile communications, fixed telephony revenues have declined by 5bn EUR during the year 2012, falling to 59bn EUR.
Despite a difficult environment with shrinking revenues, telecom operators throughout Europe are upholding their investment efforts to roll out ultra-fast fibre-based fixed broadband infrastructures and fourth generation mobile networks. After significantly stepping up their investment in 2011, operators in Europe have maintained their commitment to upgrading the continent's communications networks and even spent slightly more in 2012, with total Capex reaching 46bn EUR. Of this amount, 26 bn EUR were channelled to fixed networks and 20bn EUR went into mobile infrastructures. Again, ETNO members play a leading role in this context. They account for almost 2/3 of capital expenditure in fixed (65%) and for more than half (56%) of the investments made in mobile networks. At the end of 2012, ultra-fast broadband infrastructures cumulatively passed 54% of European homes according to the European Commission. This figure includes cable networks, which enjoy a cost advantage over their telco rivals for upgrading to their networks NGA standards and which are largely unregulated. In ultra-fast broadband, cable-cos have therefore emerged as main rivals of ETNO members in many markets. Still the share ETNO members amounts to 37% of all homes passed. The above figures illustrate that ETNO members are a key pillar of Europe's telecom markets. However, if communication services are "economic oxygen" (Commissioner Kroes), the conditions must be in place for the sector to thrive. Regulatory certainty and incentives to invest in infrastructure are important elements of making telecoms the engine and facilitator of overall economic recovery in Europe.
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Annual Economic Report
Didier Pouillot, IDATE Christoph Pennings, Head of Regulation Practice
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Annual Economic Report
ETNO
10
Market Trends The European telecom industry going through dire straits Across Europe, revenues of telecoms services have reached 273.8 bn EUR in 2012. This level is 1.8% lower than in 2011 and the fourth consecutive decline of aggregated revenues of telecom services in the region. The decline of fixed telephony revenues due to price competition as well as substitution of mobile and OTT VoIP services is a long-term trend, which has continued in 2012. The growth of mobile revenues has turned negative for the first time in 2011. This trend has accelerated in 2012 with revenues shrinking by 1.2%, compared to 0.4% in the previous year. Data and Internet services thus again been the sole growth drivers for the industry in Europe. Data and Internet revenues grew by 2.3% on a yearly basis, which is still healthy but well below 3.8% growth in the preceding year and the lowest growth rate in the 2007-2012 period.
ETNO
Annual Economic Report
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Comparing the European markets with their counterparts in the USA and Japan shows that markets have performed better in these countries. While growth in Japan is negative, too, the decrease of 1.2% is smaller than in Europe (EU5: -2.9%, ETNO perimeter: -1.8%). In the United States, growth has slowed down in 2012 compared to 2011 but remains solidly positive at 2.5% year-on-year. This evolution also translates into a decline of Europe's weight in the global telecoms services market. Europe's share of this market peaked at 30% in 2002 and has declined to 22% in 2012 (2011: 25%).
2011 the number of fixed lines fell by 5% and by 4.4% in 2010. Mobile is by far the most frequently adopted form of access with the number of lines growing moderately by 1.9%, to reach 774 million connections at the end of the year. There were nearly 160 million fixed broadband lines in 2012. This represents a growth of 4%, which is still sizeable but well below the double-digit growth levels that were still reach in 2009. ETNO members' revenues were also affected by the adverse revenue growth trend. Their total revenues across Europe and other regions reached 275 bn EUR, corresponding to a 1% decrease compared to 2011. However, ETNO members performed better than the industry as a whole which saw its revenues diminish by 2% to reach 390 bn EUR. ETNO therefore accounts for 70% of the telecom sector's revenues.
In all geographies growth of telecom services revenues has trailed GDP growth in 2012, indicating a global need to identify new levers for growth. The gap between the growth rates of telecoms services and GDP has been more marked in Europe than in the US or Japan.
Telecom operators and notably ETNO member companies continue employing a significant number of staff. Across the ETNO perimeter, its members had 668k employees in 2012, accounting for more than 77% of total sector employment in this geography.
In terms of access lines, 2012 has seen a continuation of the existing broad trends. The number of fixed telephony lines shrinks and is doing so at an increasing speed. In 2012 there were 5.7% less traditional fixed lines than a year before. In
Over al l f i gur e s Total telecoms services revenues in Europe
Fixed telephony
Data & Internet
(incl. Turkey, excl. Russia, Ukraine & Georgia) | € billion
Mobile services
TOTAL
TOTAL : 273.8
TOTAL : 278.9
TOTAL : 282.8
250
TOTAL : 285.4
TOTAL : 288.3
TOTAL : 292.1
300
143.3
145.6
143.1
144.8
142.8
150
147.9
200
2009
2010
2011
Source : IDATE
71.5
59.0
69.8
64.0
67.3
69.9
2008
65.3
2007
75.3
62.1
0
58.1
50
82.2
87.4
100
2012
Annual Economic Report
ETNO
12
Market Trends Telecoms market revenue growth in EU compared to US/Japan & overall economic growth | % 3
Source : IDATE
2
2.5 -1.2
-.5
-1.8
-1.7
-1.8
3.0 -0.8
-1.4
-1.9
-1.7
-2.0
1.0 -1.4
-0.9
-1.5
-1.2
-1.0
-2.3
-0.7
-2.3
-2.5
-2.3
-2.3
1.8 -4.4
1.3
0.8
0.4
0
0.5
1
-1 -2 -3 -4 -5 2007-2008
2008-2009
2009-2010
2010-2011
2011-2012
Current GDP growth | % 4 3
-1 -2 -3 -4 -5 -6 2007-2008
EU-5
ETNO
Annual Economic Report
EU-15
2008-2009
EU-27
EU (ETNO perimeter)
2009-2010
USA
2010-2011
Japan
2011-2012
1.1
4.0
1.5
1.1
0.9
1.0 -2.4
4.0
3.7
3.0
2.8
2.9
2.4
3.8
3.8
3.3
3.3
3.3 -6.0
-2.2
-3.2
-3.2
-3.3
-3.3
-2.3
1.9
3.3
2.7
2.2
0
2.1
1
Source : IDATE
2
13
EU telecoms market growth 2011-2012 compared to IT services & TV services ETNO perimeter
|%
1.5 1.0
0 %
IT services
TV services
Telecom services
Source : IDATE
u +1.2 %
0.5 0.0 -0.5
t -1.8 %
-1.0 -1.5 -2.0
Investment in EU telecoms sector compared to US/Japan CAPEX growth of the EU telecoms sector vs. CAPEX in the USA and in Japan
|%
8 6
7.5
6.7
0.3 -0.2
0.1 -0.1
3.6 -4.7
4.8
3.7
4.0
4.5
5.1 -2.6
0.3
1.9
3.1
4.6
-8.2
-6.3
-8.6
-7.9
-8.0
-1.0
-4.1
-1.2
-2.6
-2.0
-3.0
0
3.3
2
Source : IDATE
4
-2 -4 -6 -8 -10 2007-2008
EU-5
EU-15
2008-2009
EU-27
EU (ETNO perimeter)
2009-2010
USA
2010-2011
2011-2012
Japan
Annual Economic Report
ETNO
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Market Trends Fixed access lines Mobile subscribers
Access to telecoms services in Europe
Internet subscribers
(incl. Turkey, excl. Russia, Ukraine & Georgia) | million lines/subscribers
of which broadband subscribers
760.0
737.3
709.1
664.4
600
725.0
700
774.1
800
500 400
2009
2011
2012
Source : IDATE
158.7
195.1
153.7
206.8
145.7
2010
164.3
128.8
2008
160.6
126.9
2007
155.7
217.8
151.3 136.4
109.5
0
227.7
144.6 124.1
137.4
100
239.8
200
249.9
300
Teledensities in Europe
fixed teledensity
Annual Economic Report
mobile density
2009
internet density
2010
of which broadband density
2012
Source : IDATE
26.4
25.7
2011
27.3 32.5
26.8
34.5
24.4
21.0
2008
26.1
22.9
25.4
36.5
121.9 38.3
119.7
2007
ETNO
24.4
18.6
23.3
40.5
112.8 42.4
150 140 130 120 110 100 90 80 70 60 50 40 30 20 10 0
123.6
(incl. Turkey, excl. Russia, Ukraine & Georgia) | lines/subscribers per population
15
ETNO m e mb e r s Split of ETNO members’ turnover |€ billion
12 NMS*
EU-27
ETNO perimeter
outside EU-27
165.1
15.3
180.4
202.0
21.6
of which fixed
93.2
5.2
98.4
111.5
13.1
of which mobile
71.9
10.1
82.0
90.4
8.5
2011 European turnover
Source : IDATE
EU-15
202.0
111.5
93.2
98.4
100
82.0
180.4
150
71.9
165.1
200
90.4
250
8.5
10.1 15.3
0 EU-15
Source : IDATE
50 21.6
5.2
12 NMS
EU-27
ETNO perimeter
13.1
outside EU-27
Aggregated revenue of ETNO members
ETNO members’ employees
Europe + non Europe | € billion
ETNO perimeter | thousand
Share of total sector revenue = 70.5 %
Share of total sector employment = 77.3 %
E O members m s : 275.2 5 ETNO
t – 1 %
Total a sector c revenue e : 390.3 9
O members e : 667.9 . ETNO
t -2.3 %
Total sectorr employees: e 863.8 .
t -2 %
t -1.4 % Source : IDATE
Source : IDATE
0
50 100 150 200 250 300 350 400
0
200
400
600
800
1000
Annual Economic Report
ETNO
16
Revenue & Service Trends Broadband the industry's remaining growth driver Facing intense competition and regulatory pressure telecom service revenues continued to shrink in 2012. Still growing uptake make fixed broadband the only remaining source of growth. The investment needed in order to meet EU DA targets for BB coverage has been estimated between 110 and 170 bn EUR, contributing to the overall EU economy with an additional growth of 750bn EUR in GDP and as many as 5.5 million jobs (Source: The Boston Consulting Group 'Reforming Europe's Telecoms Regulation to Enable the Digital Single Market' July 2013).
Whereas the decline in fixed-line revenues should be expected, given the negative trend for take-up of services, the 3.8% fall in mobile retail revenues despite the growing number of subscribers and the huge popularity of smartphones seems more unusual. Intense price competition between operators (MNOs and MVNOs), the substitution of OTT offers for SMS and other services as well regulatory intervention as in the case of international roaming play into this equation. Attractive broadband offers continue boosting demand with related revenues up by 3.5% in 2012.
Overa l l f i g ure s
Although traditional fixed line telephony is on a lasting downward trend, analogue telephony lines continue to be the dominant form of managed fixed access. In 2012 there were 195 million circuit-switched telephony access lines compared to merely 66 million managed VoIP lines. However, the trend clearly speaks in favour of packet-switched telephony lines. Since 2007, the latter grew by 171%, whereas the number of legacy lines shrank by 22%. This trend will accelerate as an increasing number of operators will fully switch over to All-IP networks in the years to come. The number of mobile telephony subscribers has risen by 16% over the same period, from 664 million to 774 million.
Fixed telephony vs mobile telephony take up growth + take up of VoIP services in Europe (incl. Turkey, excl. Russia, Ukraine & Georgia) | million
800 700
664.4
709.1
725.0
737.3
760
774.1 Mobile subscribers POTS lines
600
VoIP lines
500
300
249.9
239.8
227.7
217.8
206.8
195.1
200 100
24.4
34.6
44.8
52.1
59.4
66.1
2007
2008
2009
2010
2011
2012
0
ETNO
Annual Economic Report
Source : IDATE
400
17
ETNO me mb e r s
Total retail revenues
Retail services revenues in Europe | â‚Ź billion
o/w
Fixed services
o/w
Mobile services
300
2008
2009
2010
2011
Source : IDATE
85.3
84.3
169.7
89.2
87.6
176.9
90.8
94.7
184.6
93.8
0
95.8
190.7
100.6 99.7
100
200.4
200
2012
Annual Economic Report
ETNO
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Investment Trends ETNO members driving force behind network upgrades As the demand for data traffic in fixed and mobile networks is ever-growing, operators keep upgrading their infrastructures to NGA and LTE-standards. More than 150 million European homes are already passed by FTTx-networks and more than 22 million mobile users had an LTE-subscription in 2013.
Growing at a rate of 0.3% investment levels have remained fairly stable in 2012 after a strong acceleration in 2011. Against the background of a shrinking market, this means that operators are devoting a higher share of their revenues to investing in new networks than before. Operators' investments in the ETNO perimeter reached 46 bn EUR in 2012. The lion's share of this sum (28 bn EUR or 61%) came from the members of ETNO.
ETNO
Annual Economic Report
At 25.6 bn EUR, Capex in fixed networks continues to be higher than in mobile networks in 2012 (+0.2% y-o-y). ETNO members account for almost two thirds (64.6%) of the total amount. While ETNO members increased their spending on fixed infrastructure upgrades by 0.7% in 2012, the investments of other operators fell by 0.8%. In the mobile sector, too, ETNO member firms show a high degree of activity. They invested 11.4 bn EUR in their networks, representing 56% of the mobile sector's total investment of 20.3 bn EUR.
19
Ove ra l l f i gur e s Total sector investment for 2012
ETNO members' CAPEX (ETNO perimeter) and share of total sector CAPEX | € billion
Share of ETNO members = 60.8 % 50 40
46
30
+ 0.3 %
28
20
- 0.3 % Source : IDATE
10 0
Total sector CAPEX
ETNO members' CAPEX
Investment in fixed vs mobile segments Telcos' tangible CAPEX (ETNO perimeter) | € billion
35 30.3
30.0 11.4 16.6
8.9
11.6 16.4
16.0
18.0
17.8
16.8
8.4
16.0
28.0
8.6
17.1
16.4 8.1
17.9
16.6 8.1
17.8
20 15
10.9
10.5
25
28.0
26.9
26.5
8.6
12.0
12.6
30
Source : IDATE
9.1
9.2
8.6
8.4
5
8.1
8.5
10
0 2007
ETNO members operators
2008
2009
other operators
2010
fixed
2011
2012
mobile
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Investment Trends ETNO m e mb e r s Aggregated investment by ETNO members in Europe
28.0
4.0 21.4 2.6
24.0
3.6
28.0
24.5
21.9 2.6
26.9
24.1 2.9
26.5
21.4 2.6
20
23.5 3.0
30.0
27.0
25
20.7 2.8
3.4
30
27.7 3.0
ETNO members' tangible CAPEX in Europe (ETNO perimeter) | € billion
15 10 Source : IDATE
5 0
2008
EU-15 EU-15 12 NMS
2009
2010
12 EU-27 NMS
EU-27
Outside EU-27
2011
outside EU-27
2012
ETNO perimeter
ETNO perimeter
Share of revenue devoted to CAPEX in 2012
ETNO
Annual Economic Report
EU-15
12 NMS
EU-27
ETNO perimeter
outside EU-27
Tangible CAPEX/turnover
13.1%
14.2%
13.2%
13.7%
17.7%
fixed
15.5%
16.6%
15.6%
16.0%
18.8%
mobile
10.6%
12.8%
10.9%
11.3%
16.2%
Source : IDATE
Part of turnover devoted to investment (ETNO members) | %
21
Broadband Increasing adoption of NGA and mobile broadband Broadband continues to be on the rise in Europe with 6 EU homes out of 10 subscribing to a fixed broadband service in 2012. The Digital Agenda's goal of universal availability of basic broadband has virtually been achieved with coverage standing at 100% in 17 countries and reaching 99% in the EU27 and ETNO perimeters. DSL continues to be the dominant form of fixed access, holding a 74% share of access lines in the ETNO perimeter. There has nevertheless been a gradual shift towards other technologies. Cable accounted for 17.2% of the lines at the end of 2012 compared to 16.1% a year earlier. The share of FTTH/B has grown from 3.5% of the fixed broadband market to 5.3%. More largely, superfast broadband connections now account for 16% of total (11% in 2011).
3G subscriptions have outnumbered fixed line accesses since 2009 and the gap is widening as an increasing number of users adopts not only smartphones but also other connected devices, notably tablets. While LTE adoption is still limited, increasing availability of services will drive demand and reinforce the mobile's popularity in the broadband segment.
Over al l f i gur e s Broadband penetration per technology Structure of the European fixed broadband market (ETNO perimeter) | % of total broadband connections
3.6 %
Fixed vs mobile broadband Fixed and mobile broadband subscribers (ETNO perimeter) | thousand subscribers
350
5.3 %
335.6
300 285.1
250
End 2012 73.9 %
Total fixed broadband connections in 2012 = 158.7 millions of which : DSL: 117.3
Source : IDATE
230.0
200 150 100
Cable modem: 27.3 FTTx: 8.4 Other technologies: 5.7 (LAN, FBWA, satellite…)
50
109.5
173.1 136.4 124.1
145.5
153.9
158.7
2010
2011
2012
117.5 Source : IDATE
17.2 %
77.7
2007
2008
2009
Fixed broadband subscribers 3G subscribers Annual Economic Report
ETNO
22
NGA ETNO members at the forefront of NGA deployments NGA networks continue gaining traction in the European market. More than 50% of European homes can effectively sign up to ultra-fast broadband services today. Coverage of superfast broadband services has grown by 13% compared to 2011. More than 150 million homes are now passed. Out of these, 23.7 million have actually taken a subscription at the end of 2012. Even more important is the significant growth in actual take-up of services. In 2011, 11% of the homes passed had signed up to the services, compared to 16% one year later. While this certainly still leaves significant upward potential, the trend is encouraging. In terms of FTTH/B, coverage rose to 34.9 million homes in the EU, compared to 29 million in the previous year. FTTH/B subscriptions reached 6.4 million. In the European Union, ETNO members account for 36.7% of homes passed, across all FTTx technologies. When considering FTTH/B only, this share rises to 48.5%. VDSL is also an important piece in the high-speed broadband puzzle and particularly so for ETNO members, with some of having achieved coverage of 50% of homes in their respective domestic markets. With the use of vectoring technology, VDSL becomes even more relevant. Deutsche Telekom, for instance, recently announced covering 24 million homes with vectoring by 2016.
Ov e ra l l f i gur e s Main technologies/network architecture models
Homes passed at end 2010
Total EU
ETNO members
% ETNO members
FTTH/B
34.9
16.9
48.5%
FTTx* (incl. VDSL, FTTLA, LAN‌)
150.5
54.9
36.5%
*All cable/DOCSIS 3.0 deployments are taken into account in the FTTx category
ETNO
Annual Economic Report
Source : IDATE
NGA deployment (Homes passed at end 2012 ) | million
23
NGA deployment in Europe FTTx deployments and share of ETNO members per country (end 2012)
Belgium
FTTx homes passed (000s)(1)
share ETNO
3.847
63%
6.952
D.A. 2013
digital agenda 2020
Standard (2)
VDSL (3) (4)
FTTLA (3) (4)
58%
Austria
100%
63%
36%
FTTH/B (3) 6%
100%
82%
60%
0%
Bulgaria
1.720
16%
Belgium
Croatia
670
47%
Bulgaria
100%
0%
0%
61%
Cyprus
0
100%
Croatia
97%
14%
18%
3%
Czech Republic
2.715
17%
Cyprus
100%
na
na
na
Denmark
3.596
71%
Czech Republic
98%
29%
0%
5%
685
46%
Denmark
100%
50%
54%
35%
96%
15%
64%
38%
Estonia Finland
869
94%
Estonia
France
9.660
17%
Finland
100%
na
11%
22%
Germany
36.184
34%
France
100%
0%
13%
21%
Greece
130
96%
Germany
100%
32%
55%
3%
Hungary
3.290
36%
Greece
100%
3%
0%
na
98%
7%
57%
21%
Iceland
179
40%
Hungary
Ireland
963
22%
Iceland
98%
na
na
na
3.073
97%
Ireland
98%
12%
44%
2%
883
49%
Italy
99%
8%
0%
11%
1.320
58%
Latvia
99%
25%
0%
80%
285
100%
Lithuania
98%
0%
0%
97%
0%
Luxembourg
100%
100%
0%
35%
66%
Malta
100%
na
na
na
100%
67%
37%
23% 31%
Italy Latvia Lithuania Luxembourg Malta Netherlands
0 9.558 705
49%
Poland
3.896
28%
Norway
98%
na
0%
Portugal
6.069
26%
Poland
98%
12%
12%
3%
Romania
5.147
na
Portugal
100%
0%
96%
53%
Slovakia
1.144
60%
Romania
98%
0%
17%
34%
Slovakia
93%
0%
20%
40%
Slovenia
98%
3%
35%
41%
Spain
99%
na
41%
19%
Slovenia
675
26%
Spain
10.300
21%
Sweden
2.150
44%
Switzerland
6.399
76%
Turkey
7.250
81%
UK
20.199
0%
(1) aggregated data
Source : IDATE for ouncil Europe
Norway
Netherlands
Sweden
100%
na
0%
47%
Switzerland
100%
100%
42%
17%
Turkey
100%
21%
0%
17%
UK
100%
26%
47%
1%
Total EU-15
100%
19%
34%
12%
Total EU-27
99%
17%
31%
14%
ETNO
99%
19%
29%
15%
Source : IDATE for FTTH Council Europe
Austria
Broadband coverage at end 2012(1)
(2) as a % of population (3) homes passed as a % of households (4) capable of speeds over 30 Mbps
Annual Economic Report
ETNO
24
New Broadband Services Over the Top services and applications become more and more popular Online search remains the staple food of internet usage. However, new applications keep arising with mobile broadband facilitating their development. Online search is the most frequently used service in any of the countries sampled. More than 90% of UK, French and German fixed internet users call on the services of search engines to find their way through the Internet. Social networks are another service that is highly popular and will remain being so. However, the growth of users joining social networks seems to have passed its peak. More than half of all users have already signed to a social network of virtual world and more of them will be doing so by 2017, however the progression will be moderate, ranging from less than 3 percentage points in Germany and France to 7.1 percentage points in Italy. It is interesting to note that there is no catch-up effect in Germany and France, which are the countries in which overall adoption of social networks is the lowest in the given sample. With respect to e-commerce, the picture is remarkably contrasted. Almost 80% of users in the UK and more than three quarters of German users buy online, but only 34% of Spanish users and less than a quarter of Italian fixed internet users engage in online shopping.
Overa l l f i gur e s Proportion of Internet users searching online by country in 2013 and 2017 | % of fixed Internet users 87.1%
81.9%
84.0%
60
78.8%
97.0%
93.9%
98.3%
93.9%
91.5%
80
95.3%
100
40 20
2013
0
UK
France
Source: IDATE, in "World Internet Services Market", June 2012-3
ETNO
Annual Economic Report
Germany
Italy
Spain
2017
25
Use of social networks by country in 2013 and 2017 | % of Internet users
62.0%
62.0%
72.0%
64.9%
58.5%
55.7%
40
57.7%
50
66.7%
60
71.0%
70
60.6%
80
30 20 2013
10 0
UK
France
Germany
Italy
2017
Spain
Source: IDATE, in "World Internet Services Market", June 2012-3
Proportion of Internet users shopping online by country in 2013 and 2017 | % of Internet users
UK
France
Germany
Italy
34.1%
22.5%
0
43.1%
79.6%
20
32.9%
40
73.6%
59.2%
79.2%
60
82.0%
80
64.0%
100
2013 2017
Spain
Source: IDATE, in "World Internet Services Market", June 2012-3
Use of Location Based Services by country in 2013 and 2017 | % of mobile subscribers
10 0
38.0%
29.1%
35.0%
35.0%
27.0%
20
25.0%
40.6% 30.0%
30
42.0%
40
48.5%
50
2013
UK
France
Germany
Italy
Spain
2017
Source: IDATE, in "World Internet Services Market", June 2012-3
Annual Economic Report
ETNO
26
Ranking in world & european companies Top 50 telecom operators in the world 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50
ETNO
Annual Economic Report
Company
Country
NTT AT&T Verizon China Mobile Telefónica Deutsche Telekom Vodafone Comcast América Movil Orange KDDI China Telecom Softbank China Unicom Telecom Italia Sprint Nextel Vimpelcom BT Telstra Time Warner Cable KT BCE Century Link Telenor MTN KPN TeliaSonera SingTel Bharti Airtel STC SFR Oi SK Telecom Rogers MTS Swisscom Hutchison Whampoa Telus Everything Everywhere Rostelecom Liberty Global LG U+ Ooredoo MegaFon Etisalat Portugal Telecom Belgacom PT Telkom Turk Telekom Bouygues Telecom
Japan USA USA China Spain Germany UK USA Mexico France Japan China Japan China Italy USA Russia UK Australia USA South Korea Canada USA Norway South Africa Netherlands Sweden Singapore India Saudi Arabia France Brazil South Korea Canada Russia Switzerland HK Canada UK Russia USA South Korea Qatar Russia UAE Portugal Belgium Indonesia Turkey France
2012 sales (€ million) 104377 99181 90162 69097 62356 58169 54643 48698 45805 43515 35723 34902 32953 30692 29503 27525 23061 22441 20443 16645 16437 15559 14302 13608 12808 12409 12050 11724 11697 11668 11288 11207 11047 9726 9679 9449 9033 8507 8184 8107 8025 7534 7209 6880 6834 6599 6462 6396 5506 5226
Source : IDATE
Rank
27
Top 20 European telecoms operators Company
Country
1
Telefónica
Spain
2012 sales (€ million) 62356
2
Deutsche Telekom
Germany
58169
3
Vodafone
UK
54643
4
Orange
France
43515
5
Telecom Italia
Italy
29503
6
BT
UK
22441
7
Telenor
Norway
13608
8
KPN
Netherlands
12409
9
TeliaSonera
Sweden
12050
10
SFR
France
11288
11
Swisscom
Switzerland
9449
12
Everything Everywhere
UK
8184
13
Portugal Telecom
Portugal
6599
14
Belgacom
Belgium
6462
15
Turk Telekom
Turkey
5506
16
Bouygues Telecom
France
5226
17
Virgin Media
UK
5041
18
Tele2
Sweden
5023
19
Telekom Austria
Austria
4330
20
TDC
Denmark
3509
Source : IDATE
Rank
Further information: • ALBtelecom (Albania) www.albtelecom.al
• RomTelecom (Romania) www.romtelecom.ro
• Belgacom (Belgium) www.belgacom.com
• Síminn (Iceland) www.simi.is
• BH Telecom (Bosnia and Herzegovina) www.bhtelecom.ba
• Slovak Telekom (Slovakia) www.slovaktelekom.sk
• Croatian Telecom (Croatia) www.t.ht.hr
• Societatea Nationala de Radiocomunicatii (Romania) www.radiocom.ro
• Cyprus Telecommunications Authority (Cyprus) www.cyta.com.cy
• Swisscom (Switzerland) www.swisscom.com
• Deutsche Telekom (Germany) www.telekom.com
• TDC (Denmark) www.tdc.com
• Eircom (Ireland) www.eircom.ie
• TDF (France) www.tdf.fr
• Elion (Estonia) www.elion.ee
• Telecom Italia (Italy) www.telecomitalia.it
• Elisa Communications Corporation (Finland) www.elisa.com
• Telecom Liechtenstein www.telecom.li
• POST Group Luxembourg www.postgroup.lu
• Telefónica (Spain) www.telefónica.com
• Finnet Group (Finland) www.finnet.fi
• Telefónica O 2 (Czech Republic) www.cz.o2.com
• GO (Malta) www.go.com
• Telekom Austria (Austria) www.telekom.at
• Koninklijke KPN (The Netherlands) www.kpn.com
• Telekom Slovenije (Slovenia) www.telekom.si
• Lattelecom (Latvia) www.lattelecom.lv
• Telekomunikacja Polska (Poland) www.telekomunikacja.pl
• Magyar Telekom (Hungary) www.magyartelekom.hu
• Telenor (Norway) www.telenor.com
• Makedonski Telekom (F.Y.R. of Macedonia) www.telekom.mk
• TeliaSonera (Sweden – Finland) www.teliasonera.com
• Orange (France) www.orange.com
• Teo Lt (Lithuania) www.teo.lt
• OTE (Greece) www.ote.gr
• Türk Telekom (Turkey) www.turktelekom.com.tr
• Portugal Telecom (Portugal) www.telecom.pt
• VIVACOM (Bulgaria) www.vivacom.bg
Annual Economic Report
ETNO
ETNO Members
Albania
Estonia
Greece
Switzerland
Czech Republic
Lithuania
Belgium
Finland
Luxembourg
Denmark
Austria
Turkey
Net Croatia Bosnia & Herzegovina
Malta
Portugal
France
Poland
Cyprus
The Netherlands
Romania
Italy
Norway
Deutschland *
Latvia
Romania
Liechtenstein
Slovenia
Ireland
France
Iceland Telecom Ltd.
Spain
Sweden-Finland
Bulgaria
* Deutsche Telekom Group companies who are members of ETNO: Deutsche Telekom, Hrvastki Telekom, Magyar Telekom, Makedonski Telekom & Slovak Telekom
ETNO Observers
ETNO a.i.s.b.l. • Av.Louise 54 • 1050 Brussels, Belgium • Tel:+32 (0)2 219 32 42 • Fax: +32 (0)2 219 64 12 • eMail: etno@etno.be • www.etno.eu