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Over the next five years, we expect Germany's total market revenue to grow at a CAGR of 1.8%, hindered by the weakness of the fixed market, persistent economic problems in Europe and the relatively low mobile ARPU levels, due to competitive pressures as well as slower deployment of LTE. Mobile data posted substantial growth despite the overall decline. Increasing uptake of 3G, expected to peak in 2014, is the primary driver of the growing data usage. Besides mobile data, pay-TV, broadband Internet and fixed VoIP will contribute to market growth.
Introduction and Landscape
The German telecom market generated $54.1bn in service revenue in 2012, 7.7% less than the previous year. Mobile data posted substantial growth despite the overall decline, generating $470m more revenue in 2012 than in 2011. Increasing uptake of 3G, which reached a 65.3% share of mobile subscriptions in 2012 and is expected to peak at 85.3% in 2014, is the primary driver of the increased data usage. Besides mobile data, pay-TV, broadband Internet and fixed VoIP will contribute to market growth. With regard to pay-TV, we project IPTV and DTH/satellite to grow in both subscriber and revenue terms over the forecast period, driving an increase in the subscriber base and penetration rate. Revenue from fixed circuit-switched voice has been declining and is expected to drop by $6.8bn between 2012 and 2018, leaving fixed and pay-TV revenue stable at $28.2bn between 2012 and 2018. Over the next six years, we expect the market to grow at a CAGR of 2% in USD terms, reaching $61bn by 2018.