The Swedish Telecommunications Market - first half year 2005 - PTS-ER-2005:40

06/12/2006

Viewed overall, the end-user market for electronic communications in Sweden had a turnover of SEK 24.5bn during the first half-year 2005, which means that the end-user market reduced in total by 0.3 per cent when compared with the first half-year 2004.

On 30 June 2005 there were 5 683 000 fixed telephone subscriptions in Sweden, of which 5 363 000 were PSTN subscriptions. At that time just under 14 per cent of the total number of telephone subscriptions were provided by an operator other than TeliaSonera, which is an increase of 12.5 per cent since 30 June 2004. This increase is mainly due to the introduction of the distributor product wholesale product for telephone subscriptions (GTA), which PTS decided during February 2005 that TeliaSonera is under an obligation to offer. GTA makes it possible for other operators to invoice the subscription charge to the end-user. Sales were substantial during the spring of 2005 and the number of subscription customers amounted to 645 000 in June 2005. The remaining increase is found within IP-based telephony. There were 126 000 subscriptions for IP-based telephony on 30 June 2005, which corresponds to an increase of 123 per cent since 30 June 2004, when the number was 56 000. The vast majority, that is 119 000, were household customers. On 30 June 2005 there were 4 254 000 household customers of fixed telephony, of which 44 per cent have chosen to place calls with an alternative operator to TeliaSonera.

The market value of fixed call services amounted during the first half-year 2005 to SEK 11.3bn, which is 0.8 billion less than during the same period 2004. The market for fixed call services demonstrates in other words a negative growth of 7 per cent.

PTS has, as of this report, changed the definition for how long a pre-paid card may be inactive to be included in the statistical information-base. This change entails an adjustment in the number of mobile subscriptions. With the new three-month definition, the number of mobile subscriptions was 8 981 000 on 30 June 2005, which corresponds to approximately 11 per cent less mobile subscriptions than when applying the previous definition.

The annual growth in mobile subscriptions has been at a relatively stable level of around ten per cent during recent years. Between the first half-year 2004 and the first half-year 2005, the number of mobile subscriptions (contract subscriptions and pre-paid cards) increased by just under 7 per cent, in other words, somewhat less than previously.

The service providers of mobile call services are still small, with an aggregate market share of 3 per cent of the total number of mobile subscriptions, which corresponds to 268 000.

The number of traffic minutes in the mobile networks increased greatly, by 31 per cent, between the first half-year 2004 and the first half-year 2005. Between the corresponding period 2003 and 2004 growth in traffic was only 10 per cent. The fact that the traffic in the networks is increasing so greatly despite marginal change in the proportion of Swedes using mobile telephones clearly demonstrates that we are increasing our use of mobile telephones. It is primarily private customers who call more. One important reason for the rather great increase occurring now is almost certainly due to it having become increasingly less expensive to call with mobile telephones during 2004 and 2005. The proportion of mobile voice traffic of the total voice traffic (i.e. the total voice traffic in fixed and mobile networks) was 22 per cent during this period, an increase from just over 18 per cent during the corresponding period a year ago.

Turnover for mobile call services increased by 2.6 per cent from SEK 7.9bn to SEK 8.1bn between the first half-year 2004 and the first half-year 2005.

PTS estimates that the value of the market for data communications services to end-user amounts to SEK 2.00bn. This means that the value of the market has reduced by 6 per cent in relation to the same period in 2004. For the first half-year 2004 the value was SEK 2.14bn. The reason for the value of the market decreasing is that there is a rapid shift in progress from traditional data communications services to primarily IP-VPN.

Growth in the total number of customers with Internet access is increasing again after a couple of years of stagnation. The number of customers increased by 8 per cent, from 3 130 000 to 3 373 000, between 30 June 2004 and 30 June 2005. On 30 June 2005, PTS estimates that 1 468 000 household customers with Internet access were connected via some form of fixed connection. The corresponding number of customers on 30 June 2004 was 1 013 000. On 30 June 2005, almost 33 per cent of households were connected to the Internet via some form of fixed connection. On 30 June 2004, the proportion was 23 per cent.

ADSL is the access form that has the greatest number of household customers in the market for fixed connections and now represents 62 per cent of the market for fixed connections and 30 per cent of the total market for Internet accesses to households. This is a proportion that is increasing. Cable television networks and LAN networks had 20 and 18 per cent respectively of the market for fixed connections and 10 and 9 per cent respectively of the total household market. Between 30 June 2004 and 30 June 2005 the number of household customers with ADSL increased by 58 per cent, from 576 000 to 908 000.

The economic importance of Internet access as a service in the Swedish telecommunications market continued to increase during the first half-year 2005. In total, turnover in the market for Internet access amounted to SEK 3.68bn, which is just over 13 per cent more than during the first half-year 2004, when the turnover was SEK 3.26bn. It is primarily the charges for fixed connection that are providing the operators with increasing revenues. These revenues rose by 28 per cent in value during the first half-year 2005 compared with the corresponding period in 2004. The revenues from fixed connection, which amounted to SEK 3.01bn, currently comprise 82 per cent of the total revenues for the Internet. The revenues for dial-up Internet amounted to SEK 0.6bn under the first half-year 2005 and are continuously reducing.