The Swedish Telecommunications Market 2006 - PTS-ER-2007:15

07/06/2007

Viewed overall, the Swedish retail market for electronic communications in Sweden had a turnover of SEK 48.0bn during 2006, which means that the retail market reduced in total by two per cent when compared with 2005.

On 31 December 2006 there were 5 551 000 fixed telephone subscriptions in Sweden, which corresponds to a decrease of a little less than one per cent compared with the same period in 2005. Of these, 4 987 000 were PSTN subscriptions.

Of the total number of subscriptions, almost 26 per cent were provided by an operator other than TeliaSonera, which is an increase of seven per cent since 31 December 2005. This increase is mainly due to the introduction of the resale product wholesale product for telephone subscriptions (GTA), which has made it possible for more operators to invoice the subscription charge. Sales were substantial during 2005 and 2006, and the number of subscription customers amounted to 1 011 000 in December 2006. The remaining increase is found within IP-based telephony. There were 410 000 subscriptions for IP-based telephony on 31 December 2006, which corresponds to an increase of 87 per cent since 31 December 2005, when the number was 219 500. The vast majority, that is 392 000, were household customers. On 31 December 2006 there were 4 258 000 household customers of fixed telephony, of which 45 per cent have chosen to place calls with an alternative operator to TeliaSonera.

The market value of fixed call services amounted during 2006 to SEK 19.5bn, which is 2.4 billion less than during the same period 2005. The market for fixed call services demonstrates in other words a negative growth of eleven per cent.

On 31 December 2006 there were 9 607 000 mobile subscriptions in Sweden, compared with 9 104 000 subscriptions on 31 December 2005. The number of private subscriptions on 31 December 2006 was 7 716 000, with corresponds to 80 per cent of all subscriptions.

The annual growth for mobile subscriptions was at a relatively stable level of around ten per cent in recent years. As of 2005 this growth has diminished. Between 2005 and 2006, the number of subscriptions (contract subscriptions and pre-paid cards) increased by almost six per cent. The market has reached a certain degree of saturation.

The service providers of mobile call services continued to reduce in importance, and the aggregate market share currently amounts to just less than one per cent of the total number of subscriptions, which corresponds to 88 000 subscriptions.

The number of traffic minutes in the mobile networks continued to increase greatly, by 27 per cent, in 2006. Between 2004 and 2005 the growth in traffic was 30 per cent. Prior to this, the traffic had not increased to the same extent. 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. Both private and business customers call more, and one important reason for traffic continuing to increase so much is due to it having become less expensive to call with mobile telephones in recent years. The proportion of mobile voice traffic in relation to total voice traffic (i.e. the total voice traffic in fixed and mobile networks) was 31 per cent during 2006, an increase from 24 per cent during 2005.

Mobile customers continue to use mobile data services increasingly more regularly. During 2006 almost 203 000 Gbytes of data were sent, which is almost a quadrupling compared with 2005, when 60 000 Gbytes were sent.

However, the growth in turnover for mobile call services was marginal and increased only by 0.3 per cent, to SEK 16.8bn, in 2006.

PTS estimates that the value of the market for data communications services to end-user amounts to SEK 4.22bn. This means that the value of the market has reduced by 0.2 per cent in relation to 2005, when the turnover amounted to SEK 4.23bn. Compared with 2002, the turnover has reduced by 13 per cent. The reason for the value of the market decreasing is that there is a rapid shift in progress from traditional data communications services, such as Frame Relay and leased lines, to primarily IP-VPN.

The total number of customers with Internet access increased once again after having been on an even level for a couple of years. The number of customers increased by 182 000, from 3 289 900 to 3 471 000 between 31 December 2005 and 31 December 2006. The trend towards a growing proportion of fixed connections continued in 2006, and the number of subscriptions with fixed access was 2 365 000, or 68 per cent of the total number of subscriptions, at the end of 2006. The number of customers for dial-up access (PSTN and ISDN) was 1 105 000, or 32 per cent, during the same period. PTS estimates that on 31 December 2006, 2 188 000 household customers with Internet access were connected via some form of fixed connection. The corresponding number of customers on 31 December 2005 was 1 728 000. Of the total number of connections in the private market, 68 per cent are fixed connections.

ADSL is the access form that has the greatest number of household customers in the market for fixed connections and now represents 43 per cent of the total market for Internet accesses to households. This is a proportion that has increased greatly. Between 31 December 2005 and 31 December 2006 the number of household customers with DSL increased by 27 per cent, from 1 083 000 to 1 378 000.

The economic importance of Internet access as a service in the Swedish telecommunications market continued to increase during 2006. In total, turnover in the market for Internet access amounted to SEK 7.97bn, which is ten per cent more than during 2005, when the turnover was SEK 7.24bn. It is primarily the subscriptions to fixed connections that are providing the operators with increasing revenues. These revenues rose by 19 per cent in value during 2006. They amounted to SEK 7.27bn and comprised 91 per cent of the total revenues for the Internet. The revenues for dial-up Internet amounted to SEK 0.7bn during 2006 and are continuously reducing.