The Swedish telecommunications market 2001 - PTS-ER-2002:11
27/05/2002
During 2001 it has become even clearer that it is the new forms for communications that dominate developments in the market. It is primarily text messaging (SMS) and Internet access with higher transmission capacity that have experienced the greatest growth. At the same time, other previously strong growth services have entered a calmer phase of growth. We can see, among other things, a more modest rate of growth in the number of mobile subscriptions, which probably is mainly due to the penetration in Sweden being rather high.
The number of pre-selection customers for fixed telephony is continuing to increase rapidly, and at even a more rapid pace during 2001 than during 2000. During 2001, the number of preselection customers increased by 35%, or 396 000. At the end of 2001, 1 541 000 fixed telephony customers had thereby chosen an alternative operator than Telia as pre-selection operator. Of these pre-selection customers, 1 324 000 were private, corresponding to one-third of all private subscriptions for fixed telephony (PSTN and ISDN). This high number of pre-selection customers confirms that the pre-selection reform that was implemented by PTS in September 1999 has developed into a significant success for increased competition in the Swedish market for fixed telephony services.
The market value of fixed telephony during 2001 amounted to SEK 27.1bn, which means that the market for fixed telephony only continues to develop marginally. Growth during 2001 lay at something more than 1%. Telia had 76% of the market value at the end of 2001 and has lost on average almost 3 percentage units each year since the measurements commenced in 1994.
The market value for national calls during 2001 amounted to just over SEK 8.8bn. The revenues for this kind of call are basically at the same level as for 2000 and 1999, possibly a little lower. At the same time, it should be emphasised that ‘national calls’ also includes Internet calls, i.e. dial-up access via PSTN and ISDN. These constitute between one-fourth and one-third of the revenues. During 2001, Telia had a market share of 69% of the value of national calls. This is a full 8 percentage units less than during 2000, when Telia’s market share was 77%. It may be added that Telia, between 1999 and 2000, also lost a further 11 percentage units. The impact that the pre-selection reform has had is reflected in these figures.
Calls from fixed networks to mobile networks, with their SEK 5.5bn, constitute a rather large proportion of the total market value of fixed telephony. Telia continues to lose rather great market shares within this segment; during 2001, Telia’s market share reduced by 8 percentage units, from 64% to 56%. The average revenues of the operators per traffic minute for calls from fixed networks to mobile networks has reduced during the last one-year period, from 1.96 kronor per minute during 2000 to 1.73 kronor per minute during 2001.
International calls are the kind of calls within fixed telephony that have been exposed to competition longest in Sweden, something which has meant continuously reducing call tariffs for the consumer. Smaller operators often have several suppliers of international traffic to choose between, which provides them with a rather good position in this sub-market. In principle, the market for international traffic is one of the few markets that really works well. The decreasing call tariffs have not been counterbalanced by the traffic volume having increased to a corresponding extent. Even if the traffic volume increased by 4% during 2001, the value of the market for international calls fell by a full 26%. In 2001, Telia had a market share of 43%, which is 6 percentage units less than the year before.
Thereafter comes WorldCom, which had 17% of the market, Tele2 with 15% and the group ‘other operators’ with 25%.
The mobile market now appears to have entered a new, calmer phase. The number of subscriptions and pre-paid cards is not increasing as much as before. During 2001, these increased by only 12%. The corresponding figure for 2000 was 24% and for 1999, 25%. The number of subscriptions and pre-paid cards was 7 157 000 as of 31 December 2001. Pre-paid cards continue to grow and now comprise 49% of GSM subscriptions and pre-paid cards combined.
During 2001, the number of service providers of mobile telecommunications services increased from two to about ten. However, some of these are subsidiaries of the network-owning mobile operators. The new service providers for mobile telecommunications services are indeed still small, with an aggregate market share of only 1.1% of the total number of subscriptions and prepaid cards, but at the same time it can be concluded that during 2001 the service providers succeeded rather well in netting new customers for their GSM subscriptions. Of the total growth in the number of subscriptions and pre-paid cards of 788 000, the service providers have taken almost 6%.
During 2001, the growth in the number of SMS sent continued to be very high. More than twice as many SMS were sent in 2001 than in 2000. In practice, this means growth of 116% or, computed as a number, an increase of 547 million text messages sent; from 473 million to 1.02 billion. Private customers sent 85% of these. SMS is therefore responsible for 7% of the total average revenues per customer for mobile telecommunications services. Looking only at private customers, the corresponding portion is a full 12%.
The growth in the number of customers in Sweden with Internet access continues to be strong. During 2001, the number of customers increased by 542 000, from 2 307 000 to 2 849 000, which corresponds to growth of 23%. PTS estimates that on 31 December 2001, 455 000 private customers with Internet access were connected to the Internet via some form of access with higher transmission capacity. The corresponding figure for 31 December 2000 was 138 000. It is primarily ADSL that has emerged as a clear leader, with almost 9% of the total market for private Internet accesses with high transmission capacity. However, only one-fourth of all private customers with higher transmission capacity have access to transmission capacity of 2 Mbps or above.