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Finland Telecommunications Report Q1 2012
Business Monitor International, Jan 2012, Pages: 87
Business Monitor International's Finland Telecommunications Report provides industry professionals and strategists, corporate analysts, telecommunication associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on Finland's telecommunications industry.
In this quarter's update of BMI's Finland Telecommunications Market report, BMI has extended its forecasts for the country's fixed-line, broadband and mobile telephony sectors through to 2016. BMIhas also taken the opportunity to integrate new market data from the regulator, FICORA, regarding the fixedline market, which appears to be declining at a faster rate than expected. Some minor adjustments have been made to BMI's mobile and broadband forecasts as operators' growth in these areas during Q311 were broadly within expectations.
The fixed-line market is now believed to have declined by 14.7% in 2010, much faster than previously reported and faster than the decline in previous years. Data covering the period through to June 2011 suggest an even faster rate of decline, which is borne out by Q311 data from the three largest players:
TeliaSonera, Elisa Communications and DNA (the fourth operator, Finnet Group, does not disclose subscriber numbers). BMI now expects the number of fixed-line connections to fall below 1mn before the end of the forecast period. By 2016, there will be 981,000 lines in service, a penetration rate of 17.9%. Key operators have, for some time, been saying that they are forsaking investment in traditional fixed-line platforms in favour of wireless and fibre technologies as Finns increasingly turn to broadband for their communications needs.
xDSL remains the primary means of fixed broadband access, but demand has slowed as traditional copper access lines are abandoned and the emphasis has switched to wireless. Here, mobile broadband dominates, accounted for 1.8mn subscribers by June 2011.
Operators are rapidly deploying HSPA/HSPA+ upgrades, allowing data transfer rates of up to 42Mbps, while also beginning to roll out fourth-generation (4G) networks based on the LTE technology standard. BMI therefore expects mobile to drive broadband uptake over the coming five years and forecast 4.67mn broadband subscribers by 2016, a penetration rate of 85.3%. IPTV services are increasingly being deployed as an incentive to keep customers to fixed connections, but uptake has been poor due to the highly cabled nature of the Finnish pay-TV sector.
The mobile sector itself continues to have robust growth rates, although TeliaSonera's net losses have been mounting in 2011 and it has relinquished its market leader position to Elisa. TeliaSonera's poor performance is indicative of the highly saturated nature of the market and BMI expects to see a fairly rapid slowdown in customer addition rates from 2012.
Efforts to shed low-value prepaid customers in favour of focusing on more valuable postpaid subscribers appears to be reaping rewards, as data service revenue continue to grow. However, regulator-imposed mobile termination rates (MTR) and interconnection charge reductions are mostly offsetting those gains. It will be another two or three years yet before conditions truly favour the new focus on postpaid and non-voice services. By 2016 BMI forecasts there will be 10.059mn mobile subscribers, of which 4.698mn will be on 3G services
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