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Italy Telecommunications Report Q1 2011
Business Monitor International, Dec 2010, Pages: 99
Business Monitor International's Italy Telecommunications Report provides industry professionals and strategists, corporate analysts, telecommunication associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on Italy's telecommunications industry.
BMI’s Q111 telecommunications report for Italy contains an update on the country’s mobile, fixed-line and broadband markets as well as our new forecast period now extended to 2015. Our analysis for this quarter uses financial and operational published by the major service providers across the three main segments and the latest market data from the telecoms regulator, ANCOM.
Using Q310 subscriber figures released by Telecom Italia, Vodafone Italia and WIND, and Q210 figures released by 3 Italia, BMI estimates that there were around 82.9mn mobile subscribers in Italy at the end of September 2010. After four consecutive quarters of net gains, the market seems to firmly be on a positive growth trajectory. However, BMI cautions that considerable net losses could occur again over the medium term in view of the likelihood of further discounting of inactive subscribers. Telecom Italia remains the market leader in the mobile sector, despite significant subscriber losses in 2009 and into the first quarter of 2010.
Vodafone's challenge to the top spot appears to have been impeded by its subscriber losses in the latter part of 2009. WIND and 3 Italia saw their market shares improve considerably over the past two years as their two bigger rivals lost subscribers, however, it should be noted that an attempt to discount inactive subscribers on both operators' networks could see a significant contraction of their subscriber bases and, by implication, market shares. We expect growth to remain positive, albeit muted, over the forecast period. By 2015, we believe Italy's mobile market will have more than 84.3mn subscribers and a penetration rate of almost 140%.
Meanwhile, the latest operational data published by Telecom Italia, Fastweb, WIND, Vodafone and Tiscali, appears to affirm our earlier estimate regarding the size of Italy’s broadband subscriber market at the end of 2009. We estimate that Italy’s broadband subscriber base grew by 9.5% in 2009 to reach almost 12.4mn at the end of the year. Competition among main alternative service providers WIND-Infostrada, Fastweb and Vodafone is intensifying with the offer of competitively priced multiplay packages. They are, however, still a long way behind market leader and fixed line incumbent Telecom Italia, which controls around 53% of the retail broadband market.
In the fixed sector, alternative operators, including WIND and Vodafone, continue to record strong subscriber growth, but this has been insufficient to offset the net losses of incumbent operator Telecom Italia, leading to a contraction in the total fixed line subscriber base. We expect this trend to continue over the forecast period and anticipate that the number of active fixed lines in Italy will fall 21mn by 2015.
Italy edged up two places to 11th position in this quarter’s update to BMI’s Business Environment Ratings for Western Europe, largely due to a stronger Industry Rewards score. Italy’s Country Risk score remains well below the regional average for Western Europe. The Italian economy is one of the most vulnerable economies in an already shaky eurozone. We still expect a return to positive growth in 2010, although we caution that weak domestic and external demand will allow for a fairly modest rate of economic expansion.
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