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Iceland - Telecoms, IP Networks, Digital Media and Forecasts
Market Briefing
Published: July 2011
Pages: 36
Tables: 62
From: GBP 289.00 Buy Now!
Research from: Paul Budde Communication Pty Ltd.
Sector: Broadband & Fixed
Executive summary
Revived investment in Iceland’s telecom market following economic crash
BuddeComm’s annual publication, Iceland - Telecoms, IP Networks and Digital Media and Forecasts, provides a comprehensive overview of the trends and developments in the telecommunications market in Iceland. It incorporates the latest operator and regulator data, and provides an overview of the telecoms market including the mobile voice and data, broadband and digital media sectors.
Restricted by having one of Europe’s smallest economies, there is little room for growth within Iceland’s telecom market. The market continues to suffer from the grim effects of the recent economic downturn, a situation which is likely to persist for the next two to three years at least. Iceland recorded Europe’s first and worst economic collapse during the recent downturn, though telecom revenue proved resilient – mainly due to the nature of its being a crucial utility. Investment crashed by about 50% in 2009 as a result of liquidity difficulties, though it recovered in 2010 and further growth is anticipated in 2011 and 2012.
The government’s economic forecast for 2011-2016 predicted that the economy would grow 2.5% in 2011 and 3.1% in 2012, driven by increased investments and consumption. Unemployment will remain high but falling steadily with economic growth.
The incumbent, Síminn, remains in a precarious position with creditors as a result of it having hedged against the falling króna and the failure of banks to honour their currency swap agreements. The company saw a 15% fall in revenue in 2010, obliging it to adopt efficiency measures and streamline its operations. Most other operators have also suffered as consumers reign in their discretionary spend. As a result, operators are unlikely to see revenue growth in the short term. Services on which they had hoped to realise significant returns, such as high-end mobile data applications, are expected to generate only moderate income during the next few years.
There is effective competition in all market sectors, with a small number of new players having emerged to challenge the dominance of the two leading players Síminn and Vodafone Iceland. The new entrants Nova and Tal have expanded their launched fixed-line services, complementing their existing presence in the mobile phone market.