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Norway Telecommunications Report Q4 2011
Business Monitor International, Sep 2011, Pages: 94
Business Monitor International's Norway Telecommunications Report provides industry professionals and strategists, corporate analysts, telecommunication associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on Norway's telecommunications industry.
The Q411 update to BMI's Norway Telecommunications Report contains the latest forecasts covering the country's mobile, fixed-line, broadband, internet and 3G markets through to 2015. There have been no significant developments in the country's mobile market. We have therefore left our forecasts unchanged, believing they represent an accurate picture of how Norway's different telecoms market sectors are progressing based on operator data for H111. However, our fixed-line forecast has been downgraded slightly following the release of new data by the regulator, the Norwegian Post and Telecommunications Authority, covering the period to the end of 2010. Likewise, the broadband forecast has been downgraded slightly following the release of new data by the regulator that came in slightly under our expectations.
Based on the available data from operators TeliaSonera and Telenor, BMI estimates Norway had about 5.589mn mobile subscribers at the end of Q211 and a penetration rate of 113.6%. The market and operators rebounded following a weak Q410 and Q111, with net additions of 31,000 subscriptions in Q211. The operators and many of their reseller partners recorded a very weak Q410 and Q111 with a number of customer base reductions seen. Despite the uptick in subscriber growth in Q211 we continue with our longterm view that saturation of the market is close at hand and that operators focusing on customer acquisition strategies will be less successful than those looking to retain customers and enhance their value proposition.
We expect Norway's network operators to continue emphasising the development of 3G, 3.5G and 4G services as a way of driving future growth.
A key development, although with little immediate market impact was the announcement in the July 2011 that Tele2 plans to purchase Network Norway, consolidating two of the major alternative mobile service providers in the country. We expect this to help Tele2 achieve sufficient scale to be able to compete against the larger operators in an environment of falling MTRs. The announcement followed the April 2011 announcement that Hi3G Access, holder of the country's third 3G licence, had handed that licence back to the authorities as it no longer saw any commercially viable opportunities in the market. Hi3G had been reluctant to invest in network construction and, even with an extension to its roll-out obligations, it was always highly likely that it would simply write off its limited investment. While Hi3G was yet to launch services for Tele2 as an existing provider, we believe it makes strategic sense to go the acquisition route to achieving scale and a sustainable business. During H111 there have been interesting developments in terms of mobile ARPUs. While both operators are significantly down in terms of ARPUs from 12 months ago, NetCom reversed the downward trend in Q211. This reversal was built on its success in raising its postpaid ARPU, while Telenor's subscriber acquisition strategy saw its postpaid ARPU decline. In terms of blended ARPU, NetCom began to close the gap on Telenor, and BMI will be watching closely to see if this trend extends into H211. While NetCom may close the relative gap, we expect ARPUs to generally trend downwards, albeit at a slow rate. Reduced mobile termination rates (MTRs) and network interconnection fees - key revenue-generators - have resulted in reduced service revenues and, as Telenor and NetCom continue shedding inactive prepaid customers, so blended ARPU values have continued to fall. We suspect that the proportion of data within ARPUs is increasing, but the operators are careful not disclose such information, so we cannot be certain that an increased focus on VAS and bundling of additional services and products is paying off.
Norway moved back another place to eighth in in BMI's updated Business Environment Ratings for Western Europe in Q211. This followed a fall from fifth to seventh position in Q311. The decline was primarily the result of a fall in its Industry Rewards score that is derived from falling ARPU rates and a slowing in overall subscriber growth. However, it remains a high value and stable market at the forefront of technological development.
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