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Czech Republic Mobile Network Operator
Subscriber Data 2008-2011
Table & Charts
Czech DTTV multiplex reaches 100% coverage, paving the way for ASO in 2012
BuddeComm's quarterly publication, Czech Republic - Telecoms, IP Networks, Digital Media and Forecasts, provides a comprehensive overview of the trends and developments in the telecommunications and digital media markets in one of Europe's most dynamic markets struggling to overcome larger economic difficulties. It includes the regulator’s 2010 annual report market data and operator data to the first quarter of 2011.
The Czech economy has been affected by the global financial turmoil due to weakening demand for its export products. The Czech National Bank (CNB) estimated that the economy will have stagnated for four years before showing some recovery by the end of 2011: the economy is roughly at the level it was at the end of 2007. The recovery process is jeopardised by inflationary pressures caused by a growth in costs for oil, food and raw materials, counteracted by the strengthening Czech currency. The CNB predicted that the Czech GDP would grow 1.6% year-on-year in 2011, though the Finance Ministry has suggested a 2.2% growth.
The Czech Republic joined the European Union (EU) in 2004, and thereafter the country’s telecoms market was reformed in common with EU Directives. This included full market liberalisation, which resulted in alternative operators being able to launch services competing with the incumbent, then known as Cesky Telecom and since branded as Telefonica O2 CR.
The fixed broadband market continues to show significant growth in the wake of falling prices. Fixed wireless broadband remains popular, having shown initial growth while nascent DSL and cable networks were being built: wireless broadband usage is among the highest in the EU. The fibre-to-the-home (FttH) sector is also experiencing rapid growth, while broadband access has laid the foundation for a developing internet Society, with a range of online services and activities taking place.
The Czech Republic's media market is evolving under the weight of digital TV and convergence trends, with over half the population receiving TV services digitally. The uptake of IPTV services is growing on the back of more affordable broadband access while the cable TV market has undergone consolidation to create a major player with sufficient size to compete effectively against Telefonica O2 CR. Analogue switch-off is continuing on a regional basis before the process is completed at the end of 2012. Digital satellite TV services are widely available from a number of competing platforms.
Source: The Worldwide Directory of Mobile Network Operators 2011 Copyright: TelecomsMarketResearch.com 2011
Source: The Worldwide Directory of Mobile Network Operators 2011 Copyright: TelecomsMarketResearch.com 2011
Source: The Worldwide Directory of Mobile Network Operators 2011 Copyright: TelecomsMarketResearch.com 2011
Source: The Worldwide Directory of Mobile Network Operators 2011 Copyright: TelecomsMarketResearch.com 2011The well developed mobile market has among the highest SIM card penetration levels in Eastern Europe, far above the EU average. With mobile voice markets saturated and opportunities for new mobile subscriber additions minimal, the three established mobile network operators have focused on developing ARPU, which have fallen as a result of market competition and regulatory measures: strategies include migrating prepaid users to contract plans and encouraging take up of mobile broadband services. To this end considerable investment has been made in upgrading HSPA networks across the country. MNOs have also expanded into offering fixed line voice and data services.
Table 1 - Key telecom parameters – 2010; 2012
Sector
2010
2012 (e)
Broadband:
Fixed broadband subscribers (million)
2.30
2.79
Fixed broadband penetration rate
22%
26%
Mobile broadband subscribers (thousand)
505
760
Subscribers to telecoms services:
Fixed-line telephony (million)
2.05
1.85
Mobile phone (million)
14.33
14.60
Mobile SIM penetration (population)
139%
144%
Market Highlights
> T-Mobile has expanded its HSPA+ coverage, reaching 43% of the population (97 cities and larger municipalities, as well as some 230 smaller towns) by mid-2011. National coverage is expected by 2013, delivering capable mobile broadband to rural areas.
> Vodafone's 3G network population coverage reaches 30%, complemented by 95% EDGE coverage.
> Despite difficulties in other European markets, Telefónica, T-Mobile and Vodafone are developing a DVB-H mobile TV network in the Czech Republic based on trials undergone since 2008.
> The alliance among MNOs to promote m-payment services, using a joint 'Plat mobilem' (Pay by Mobile) logo, should rapidly expedite market developments in coming years given the propensity for Czechs to use cash rather than credit cards for most purchases.
> FttX deployments remain low key though the government’s National Broadband Access Policy has provisioned for network infrastructure access to promote fibre deployments in coming years.
> Cable TV market consolidation has left UPC Czech as the dominant player, with geographic scale to have upgraded most of its network with DOCSIS 3.0 technology offering download speeds of up to 100Mb/s. This company provides effective cross-platform competition in most urban areas.
> With the switch to DTTV progressing, the first multiplex now reaches nearly 100% of the population, the second multiplex covers over 89%, the third over 85% and the fourth 25% (concentrated on Prague, Plzen, Brno and Ostrava).
Key developments:
VOLNY transfers DSL subscribers to O2 and sues for CZK4 billion; stagnant economy since 2008 affecting consumer spend on telecom services, recovery expected in 2011 with GDP to grow 1.6%-2.2%; T-Mobile, O2 and Vodafone alliance to promote m-payment services; T-Mobile HSPA+ coverage reaches half the population; Telefónica and T-Mobile sign six-year 3G network sharing agreement; Wireless broadband remaining popular; Vodafone launches VDSL2 services; RIO Media building one of the largest FttH networks; BPL in Prague a success through SmartCity Platform; first DDTV multiplex reaches 100% coverage; Ceske Radiokomunikace buys CDG to control three muxes; operator data to Q1 2011.
Business Monitor's Czech Republic Telecommunications Report Q3 2011 report noted that during 2010, the Czech mobile market was constrained by continued sluggish growth at the two leading mobile operators while third ranked Vodafone made some headway but at a much slower pace than in previous years. The mobile market therefore grew a little slower than BMI had expected, but with a new focus on mobile broadband services and success in winnowing out inactive subscriptions, as well as a potential new lease of life for the fourth operator, we have raised our forecasts for the saturated mobile sector. Meanwhile, the country's fixed-line and broadband internet markets grew within expectations and we have not needed to alter our outlook or forecasts for these sectors. We have, however, introduced forecasts for the key operators' blended ARPUs through to 2015.
The average blended mobile ARPU for the Czech market came in at around CZK 436.9 in 2010, down by 9.2% from CZK481.0 a year earlier and almost CZK100 less than the CZK534.2 seen in 2008. Newlymandated Mobile Termination Rate (MTR) reductions and cuts to interconnection rates impacted heavily on service revenues in both 2009 and 2010, and further reductions are expected to be phased in over the next couple of years. These reductions caused blended ARPUs to fall across the board and are likely to continue to affect ARPUs in the years ahead. Inactive customer eliminations will also be seen over the next couple of years, impacting further on ARPUs.
In all, there were 13.631mn mobile subscribers in the Czech Republic at the end of 2010, up by just 0.3% year-on-year (y-o-y). The underlying positive growth in the postpaid market was driven by the operators' newfound emphasis on their 3G networks and mobile broadband services. All four operators instigated tariff cuts during 2010 and we think these moves will help boost subscriber numbers appreciably in the years ahead. By 2015, we expect the market to be supporting a little over 13.99mn subscribers in all. This would yield a penetration rate of 131.9%.
Notable developments in the mobile market include T-Mobile's launch of pay-TV services, leveraging one of the country's four satellite TV operators. The company has yet to say how many subscribers it has signed up and whether the offer is influencing customers' decisions to join or stay on its network. Another key development came in February 2011 when MobilKom, the smallest mobile network operator, agreed to be acquired by Divenno Holdings Ltd and merged with Divenno's existing fixed-line, data services and broadband services business, Dial Telecom. BMI believes the move will be a good one for MobilKom, which has struggled to make an impact with its technically limited CDMA wireless network, while Divenno's telecoms operations will be greatly enhanced by the ability to offer enterprise-based wireless broadband services through the MobilKom network.