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Belgium - Telecoms, IP Networks, Digital Media and Forecasts
Market Briefing
Published: March 2011
Pages: 107
Tables: 65
From: GBP 419.00 Buy Now!
Research from: Paul Budde Communication Pty Ltd.
Sector: Mobile Markets
Belgium’s 2011 spectrum auction clears the path for LTE
Certain sectors of Belgium’s telecom market, such as broadcasting, are influenced by its larger neighbours France and the Netherlands. The country’s population is split between two main language groups, Flemish and Walloon, with an additional strong German influence. This fragmentation affects regulatory policies. Being the base for several administrative centres of the European Union, Belgium has attracted considerable investment from multinationals, while the significant transient population has also contributed to the high mobile penetration.
The telecom market is expected to continue to grow steadily in coming years, largely from the broadband sector which has benefited from network upgrades, resulting in rapidly expanding bundled offers and converged services. Belgacom is continuing to roll out its fibre-to-the-curb network (aiming to cover more than 70% of households), though the fibre-to-the-home build is marginal and only affects a small number of households through a number of trials.
The regulator has nevertheless been active in promoting FttH, which is a cornerstone of the government’s Digital Action Plan 2010-2015. In particular the regulator aims to develop a well-performing fixed national network, complemented by new licences for 3G mobile services in the sub-GHz band, supported by legislative and administrative interventions regarding the rights of way for competitors to ducts and buildings.
The total turnover of the Belgian telecom sector has fallen since 2008, largely as a result of the economic crisis which has led to lower consumer spend, also the effective competition between Belgacom and the cablecos has resulted in cheaper bundled service offerings.
Revenue from the fixed-line and mobile markets fell in 2008 and 2009, a pattern which is expected to have reversed slightly in 2010 and again during 2011 as consumer confidence returns and economic conditions improve. Despite liquidity issues, investment in telecom networks – partly encouraged by government stimulus funds – has grew since, and is expected to remain stable for the next two years at least. Alternative operators now invest the largest proportion of the total.
Belgium has not kept up with the top performers in the European ranking of broadband penetration. Retail prices for Internet access remain relatively high, despite competition enabled by wholesale access. One difficulty is that the market is highly concentrated, with Belgacom and Telenet commanding 83% market share between them – Belgacom alone has about 49% of the broadband market.
As consumers increasingly move towards bundled offers, alternative DSL operators are unable to compete nationally because LLU is not economically viable everywhere, and bitstream offers do not allow ISPs to provide TV services. As a result, bundled offers are largely restricted to Belgacom (nationally) and the main cablecos in their respective geographical areas.
Growth in mobile services revenue has slowed since 2006, largely due to price reductions resulting from increased competition, as well as the effects of regulatory measures on MTRs and caps on voice and data roaming. Marginal revenue growth is anticipated for 2011, principally from greater consumer use of high-end mobile data services. The country’s mobile penetration is on a par with the EU average, reaching about 125% by early 2011. Three GSM networks operate, with Belgacom’s Proximus well ahead of France Telecom’s Mobistar and KPN’s BASE. 3G spectrum has been licensed to three operators, but only two have launched services.
Digital TV penetration reached about two-thirds of households by early 2011. Growth since 2007 has largely been due to the inclusion of DTV in bundled offers. Cable TV is the dominant pay-TV platform and is available to about 90% of households. However, less than 10% of homes subscribe to digital packages, all of which are premium services – there is a large supply of analogue basic channels, and premium pay-TV is therefore hard to sell to subscribers.
Thirty-three operators serve the market, almost all owned by one of Belgium’s financial holding companies. Previously, these inter-community cable network owner/operators were the key players in the cable-TV scene. However, since 2000 the broadband companies – Telenet and UPC in particular – have become the highest profile players.
Market highlights:
- Cable TV reaches 90% of households, and most networks have been upgraded to digital. The sector has been considerably consolidated in recent years, with Telenet having purchased Interkabel and with Alé-Brutélé and other Walloon cable companies combining forces in Brussels and Wallonia under the VOO brand. UPC is the other major player. EuroDOCSIS 3.0 has been deployed extensive, providing up to 120Mb/s services. This development is crucial for Belgium to progress with its networked economy, enabling customers to access network applications such as remote medical services, 3D TV, VoD, mobile TV, fast file sharing, synchronisation and government online services.
- Spectrum in the 2.6 GHz band is expected to be auctioned in late 2011, following the auction for 2.1GHz licences. Although technology neutral, LTE is most likely to be deployed. This will bolster the country's broadband availability is less densely populated areas in coming years.
- In addition, during 2011 operators will be able to acquire 4G frequencies in the 3410MHz-3500MHz and 3510MHz-3600MHz bands. The 10-year licences will be renewable on a five-year basis. Licensees can offer fixed, nomadic or mobile radio services, with no restriction on the type of technology used.
- Mobile data is dominated by SMS services, though from 2012 consumers will be able to make greater use of high-end services on the back of LTE technology, expected to be deployed by the MVNO Telenet and by Mobistar.
- DSL represents about two-thirds of retail broadband connections, with cable making up most of the remainder. By early 2011 about 36% of broadband subscribers had data speeds of 10Mb/s or higher – one of the highest proportions in the EU.
- Fibre networks are not widely available in Belgium but the technology is being targeted in multi-tenant buildings in both the residential and commercial markets. Since 2009 the government has promoted its SuperFastBelgium scheme based on a national FttH network. Regulations obliging Belgacom to provide competitors access to its fibre network, as well as favourable conditions on duct access and the installation of ducts above ground will reduce engineering costs by up to 80%, and so extend the reach of fibre beyond the major cities.
This report is essential reading for those needing high level strategic information and objective analysis on the telecom sector in Belgium. It provides further information on:
- Market liberalisation and regulatory issues;
- The impact of the global economic crisis;
- Telecoms operators – privatisation, acquisitions, new licences;
- Mobile data market developments in coming years in light of spectrum auctions and new license awards;
- 3G developments, regulatory issues and technologies including HSPA and LTE;
- Broadband migration to an FttH architecture;
- Historical and current subscriber statistics and forecasts;
- ARPU statistics and forecasts.
Data in this report is the latest available at the time of preparation and may not be for the current year.