2012 Slovakia - Telecoms, IP Networks, Digital Media and Forecasts

Slovakian FttX subscriber base shows steady growth as investment is channelled to NGNs

BuddeComm’s annual publication, Slovakia- Telecoms, IP Networks, Digital Media and Forecasts, provides a comprehensive overview of telecoms and digital media trends and developments in one of Central Europe’s key markets. The report includes the regulator’s market data to June 2012, telcos’ financial and operating data to September 2012, and market developments to the end of 2012.

Telecom market overview

Slovakia enjoyed strong economic growth after joining the European Union (EU) in mid-2004: from 2004 until 2009 real GDP grew by an average 7.4% while unemployment dropped significantly. With an export-dependent economy, the recent global economic turmoil has hit Slovakia’s exports to its principal trading partners Germany, the Czech Republic and France. It also softened domestic demand for goods due to falling consumer confidence and rising unemployment: the country entered its first recession since independence in 1993. Real GDP contracted 4.9% in 2009 before recovering since: although growth has slowed from 4.2% in 2010 to an estimated 2.3% for 2012, the country has fared better than many others in the European Union. 

This quick recovery has also benefited the telecoms and IT services sectors, which have been less affected than areas such as such as manufacturing and finance. This is partly due to telecoms and IT being productivity enablers, and many services (particularly broadband and mobile telephony) are considered essential by most consumers who make use of them. However, it has exacerbated difficulties in securing funding for telecoms projects, while contributing to lower revenue among the major players. This is expected to continue through to the first half of 2013 at least before showing moderate growth thereafter largely on the back of the developing broadband and mobile telephony sectors.

Mobile market

The mobile market remains a triopoly of three MNOs (T-Mobile Slovakia, Orange Slovakia and Telefonica O2), and though several MVNOs operate their collective market share of subscribers is small. Operators have invested in network upgrades, while trial LTE services have also been launched. The key driver for future revenue growth will be in mobile broadband and data services, and so further investment and wide-scale deployment of LTE are anticipated during 2013 and 2014.

Key telecom parameters – 2010; 2012

(Source: BuddeComm)

Market Highlights

• LTE trials have been underway since mid-2012 with a view to commercial launches in early 2013.
• Although the public broadcaster switched off analogue signals in late 2011, DTTV has been slow to develop a strong viewer base. Nevertheless, a digital information campaign has focussed on DTT to develop consumer interest.
• The DTH platform saw consolidation during 2012 with the merger of M7 Group’s two providers SkyLink and CS Link
• About 40% of TV households subscribe to CATV services. The market is dominated by UPC, which has a digital offering including about 70 channels.
• The FttX subscriber base is continuing to develop steadily, which is expected to lead to a slow-down and contraction of the DSL subscriber base by the end of 2013 as customers on copper-based networks are migrated to the new fibre infrastructure.

This report is essential reading for those needing high level strategic information and objective analysis on the telecom sector in Slovakia. It provides further information on:

• Market liberalisation and regulatory issues;
• The impact of the global economic crisis;
• Telecoms operators – privatisation, acquisitions, new licences;
• Mobile data market developments in coming years in light of spectrum auctions and new license awards;
• 3G developments, regulatory issues and technologies including HSPA and LTE;
• Broadband migration to an FttH architecture;
• Historical and current subscriber statistics and forecasts;
• ARPU statistics and forecasts.

Data in this report is the latest available at the time of preparation and may not be for the current year.