The Swedish telecommunications market 2000
30/06/2001
The past year has been characterised in a clear and positive way by the traditional forms of communications making way for the new forms. There has been a manifest growth of, among other things, mobile subscriptions, SMS, ISDN, Internet subscribers and broadband access. At the same time the market for fixed telephony is entering a more stable phase where the market turnover for 2000 is at the same level as for the preceding year.
Overall, fixed telephony and mobile telecommunications services had a turnover of SEK 39.9 billion during 2000, which corresponded to a growth of 4 % compared with the previous year. Since 1994, when PTS commenced its measurements, the value of the market, viewed overall, has grown by a full 67 %. Today, mobile telecommunications services comprise 36 % of the market for telecommunications and have since 1994 continuously taken shares from fixed telephony. In 1994, the corresponding share for mobile telecommunications services was 18 %.
At the end of the year, there were just more than 5,786,000 PSTN subscriptions in Sweden, which is almost 106,000 less than the previous year. A probable cause for this reduction is that increasing numbers of people – both private customers and business customers – choose instead to use ISDN. A further cause may be that some customers are satisfied with only using their mobile telephone. The number of ISDN subscriptions in total was at the end of the year 270,000, which is an increase of 34 % from just over 200,000 the previous year. On the private side, the number of subscriptions virtually doubled and amounted to 50,000 on 31 December.
PTS concludes that the major telecommunications reform in 1999, the so-called pre-selection reform, had a positive outcome with a manifest impact on the Swedish telecommunications market. At the turn of the year 2000, 1,116,000 telephony customers had chosen an alternative operator to Telia as a pre-selected operator. Of these, 930,000 were private customers, which corresponds to almost a fourth of all private directly connected subscribers. PTS was also able to conclude that there is great awareness among households in Sweden of the possibility to choose an operator by pre-selection.
The market value for fixed telephony during 2000 amounted to SEK 25.5 billion, which means that the market for fixed telephony, for the first time during those years that PTS has implemented analysis of the telecommunications market, reduced in value. The market reduced by approximately 1 %. Telia had 85 % of the market value at the end of 2000 and has steadily lost some percentage points each year since the measurements commenced in 1994. Tele2 had 7 % and Telenordia just less than 2 %. Other operators had 7 %.
For the first time in the last five years the market has not grown in value both as regards national calls and for calls from fixed networks to mobile networks. The market value for national calls amounted during 2000 to just more than SEK 8.2 billion, which is somewhat less than in 1999, when the value for national calls amounted to SEK 8.8 billion. Calls from fixed networks to mobile networks continue to constitute a relatively large proportion of the total market value for fixed telephony. During 2000, the market value for this market segment was almost SEK 4.7 billion, while the value was very close to SEK 4.9 billion in 1999.
The market for international calls is one of the sub-markets in Sweden with the greatest competition. The result of this is clear when one looks at the market shares of various operators: Telia had in 2000 a market share of 59 %, Tele2 had 13 %, Telenordia 5 % and the group ‘other operators’ a full 23 %.
In 2000 alone, the number of mobile subscriptions increased by 1,212,000 from 5,126,000 to 6,338,000, which corresponds to an annual growth of almost 24 %. This represents good growth in view of the already high penetration in Sweden. This growth may be compared with the growth for 1999, which was almost 25 %. Computed as the number of subscriptions, growth has never been greater. Of all GSM customers, the proportion who are pre-paid card customers is approximately 44 %, which is an increase of five percentage points from a level of almost 39 % at the end of 1999. Telia is Sweden’s largest mobile operator with a market share of just more than 51 % of all Swedish mobile subscriptions. Telia consequently has the same market share as it had at the end of 2000. Tele2 is the next largest mobile operator with 33 % of the subscriptions, which constituted a marginal increase of one per cent. Europolitan has retained its market share of 16 % also for 2001. The new service providers for mobile telecommunications services are still extremely small, and have an aggregate market share that hardly exceeds a few thousandths of the total proportion of subscriptions.
The turnover for mobile telecommunications services increased from SEK 12.7 billion for 1999 to SEK 14.4 billion for 2000, representing an increase of almost 14 %. Telia had at the turn of the year 2000/2001 a market share of the turnover for mobile telecommunications services of almost 53 % and has consequently lost some of its share to its competitors Tele2 and Europolitan, which both increased a little. Tele2 had a market share of this turnover amounting to almost 23 % and Europolitan almost 25 %.
The use of SMS messages has undoubtedly gained ground during 2000. During 2000, approximately 494 million SMS messages were sent from mobile telephones. This should be compared with approximately 141 million SMS messages being sent during the whole of 1999 and 161 million during the first half of 2000. In Sweden, during 2000, an average of 90 SMS messages per annum were sent by every individual mobile subscriber (GSM). The turnover for SMS is substantial and comprised, with a value of approximately SEK 632 million, approximately 4.4 % of the total turnover for mobile telecommunications services during 2000.
During 2000, there was a relative shift in attitude in the Swedish mobile telecommunications market. The mobile operators appeared to adopt new positions as regards accepting other service providers into their mobile networks. This has resulted in a number of new actors, so-called service providers, having established themselves in the mobile market. At the same time, PTS has become aware that certain operators have been denied network capacity in mobile networks, which in turn has resulted in PTS initiating supervision in the sector.
The Internet continued to grow during 2000. In aggregate, there were 2,530,000 Internet subscriptions at the end of the year. The rate of growth during 2000 was 25 % or 510,000 further subscriptions. The number of private Internet subscribers was at the end of the year 2000 approximately 2,158,000 and the number of business subscribers approximately 369,000. The rate of growth for the Internet may be given a further lift by the development of broadband access to households, i.e. potential subscribers waiting for a change of technology. The largest ISPs at present are Telia, Tele2, Telenordia and Spray/BIP. Together, these five ISPs at the end of the year 2000 held approximately 77 % of the Swedish market for Internet subscriptions. The Internet market had a turnover during 2000 of approximately SEK 3.4 billion.
The broadband development attracted great attention from the media during 2000, and during the spring hopes were expressed that it would at the end of the year be possible to find up to one million households connected. Retrospectively, one can conclude that this was far too optimistic. The development that took place during the autumn must nonetheless, in the assessment of PTS, be regarded as good.
At the end of the year, it was estimated that the number of Internet subscribers who used cable TV, ADSL or other fixed access, i.e. connections with some form of higher bandwidth, were approximately 190,000. A large part of these relate to Internet connections for households. PTS estimates that just more than 160,000 households are Internet subscribers connected with higher transfer capacity, which corresponds to almost 8 % of all Internet subscribers. Broadband penetration computed on the basis of the proportion of Swedish households is just more than 4 %. Of all private Internet subscribers who are connected with a higher transfer capacity, 63,000 were connected by cable TV, 22,000 used ADSL and 80,000 had access via an Ethernet LAN, i.e. new property networks.