The Swedish Telecommunications Market first half-year 2004 - PTS-ER-2004:43
22/12/2004
The market for Internet services represents the largest change in turnover during the first half-year 2004, growing by 9 per cent. Otherwise, none of the large end-user markets demonstrate any increase in turnover: the market for fixed call services reduced by more than 5 per cent, the market for mobile call services reduced its turnover by 2 per cent and the market for data communications services reduced by almost 7 per cent. Viewed overall, the end-user market for electronic communications in Sweden had a turnover of SEK 24.9bn during the first half-year 2004, which means that the end-user market reduced in total by 2 per cent when compared with the first half-year 2003.
On 30 June 2004 there were 5 744 000 fixed telephone subscriptions in Sweden. Approximately 1 per cent of these telephone subscriptions are provided by an operator other than TeliaSonera. The National Post and Telecom Agency (PTS) estimates that there were just more than 56 000 subscriptions for IP telephony on 30 June 2004. The potential customer base for IP telephony is increasing in pace with more operators starting to offer IP telephony in various kinds of network.
The increase in the number of pre-selection customers that we have seen in recent years now appears to have halted. During the first half-year 2004 it seems that the number appears to have actually reduced. The reduction in the number of pre-selection customers may possibly be explained partly by a number of pre-selection customers having instead chosen subscriptions with IP telephony, partly by the number having attained a rather high level and that new kinds of offers are now required to generate further interest in choosing alternative operators. In mid-2004 there were 1 959 000 pre-selection customers. Of the total number of pre-selection customers, 1 776 000 were private.
The proportion of the population of Sweden using mobile telephones is currently high. According to the PTS Survey of Individuals, 91 per cent of Sweden’s population aged 16 to 75 years use mobile telephones. A year ago this proportion was 90 per cent. The growth rate in the number of mobile subscriptions is nevertheless high. Between the first half-year 2003 and the first half-year 2004, the number of subscriptions increased in total by 11 per cent. The number of subscriptions was 9 302 000 as of 30 June 2004. The number of traffic minutes in the mobile networks increased by 10 per cent during the corresponding period, which is a greater increase than during the corresponding period in 2003, when the traffic increased by just less than 6 per cent. The fact that traffic in the networks is increasing rather greatly although the change in the proportion of Swedes using mobile telephones is marginal may possibly indicate that we are now starting to increase our use of mobile telephones. One reason for this increase occurring just now may very well be that since the autumn of 2003 it has become somewhat less expensive to call with a mobile telephone. The proportion of mobile voice traffic of the total voice traffic (i.e. voice traffic in fixed and mobile networks) was 17.5 per cent during this period, an increase from just over 15 per cent during the corresponding period a year ago.
The service providers of mobile call services are still small, with an aggregate market share of 3.2 per cent of the total number of subscriptions, which corresponds to 297 000. Considering that these service providers have been operating in the Swedish mobile telecommunications market since 1999, a few hundred thousand customers is not much.
Turnover for mobile services declined by 2 per cent from SEK 8.6bn to SEK 8.4bn between the first half-year 2003 and the first half-year 2004. This is the first time that the turnover in the mobile market has not demonstrated growth. As the number of customers is not reducing while the traffic in the mobile networks is increasing, this reduction in turnover is a further indication that mobile telephony prices have reduced slightly.
During the first half-year 2004, 960 million SMS were sent, which is an increase of 18 per cent compared with the first half-year 2003. During the period, an average of 17.9 SMS per customer and month were sent. The number of MMS that were sent during the first half-year 2004 was 10.7 million, which is an increase from 2.0 million during the corresponding period a year ago.
According to an estimate by PTS, the value of the market for data communications services to end-user amounts to SEK 1.96bn. This means that the value of the market has reduced by just less than 7 per cent in relation to the same period in 2003. The reason why the value of the market is declining is that a rapid shift is taking place from traditional data communications services to primarily IP-VPN.
Growth in the total number of customers with Internet access seems to have entered a phase of stagnation a couple of years ago. Between 31 December 2003 and 30 June 2004, the number of customers reduced by 128 000, from 3 243 060 to 3 115 070. The entire reduction is found within dial-up access. As of 30 June 2004, PTS estimates that 1 011 000 private customers with Internet access were connected via some form of fixed connection. The corresponding figure for 30 June 2003 was 764 000. The relationship between the number of private customers connected to the Internet via some form of fixed connection and the number of households in Sweden was almost 23 per cent on 30 June 2004, an increase from 17 per cent in one year. ADSL is the access form that has the greatest number of customers in the market for fixed connections and now represents 20 per cent of the total market for private Internet accesses. Between 30 June 2003 and 30 June 2004, the number of private ADSL customers increased by 34 per cent, from 419 900 to 560 700. LAN networks and cable television networks each had 7 and 8 per cent respectively of the total private market.
The economic importance of Internet access as a service in the Swedish telecommunications market continued to increase during the first half-year 2004. It is primarily the fixed charges for fixed connection that are providing the operators with increasingly great revenues. These revenues alone rose by 19 per cent in value during the first half-year 2004 compared with the corresponding period in 2003. In total, turnover in the market for Internet access amounted to SEK 3.25bn, which is just more than 9 per cent more than during the first half-year 2003, when the turnover was SEK 2.98bn.