The Swedish telecommunications market first half-year 2007 - PTS-ER-2007:27

21/12/2007

There were 5 518 000 fixed telephone subscriptions in Sweden on 30 June 2007, which corresponds to a reduction of just over two per cent compared with the corresponding point in time in 2006. Of these, 4 873 000 were PSTN subscriptions. Almost 28 per cent of the total number of subscriptions were provided by an operator other than Telia Sonera, which is an increase of just over four per cent since 30 June 2006. This increase is partly due to the fact that sales of WLR (Wholesale Line Rental) are still increasing and that IP-based telephony provided by stakeholders other than Telia Sonera is continuing to grow. There were 502 000 subscriptions for IP-based telephony on 30 June 2007, which corresponds to an increase of 60 per cent since 30 June 2006 when this number was 314 000. The vast majority of the customers, that is 478 000, were residential customers. On 31 December 2006, the total number of residential customers with fixed telephony was 4 224 000; of these, 1 787 000, or 42 per cent, chose to make calls with an operator other than Telia Sonera.

During the first half-year of 2007, the market value for fixed call services amounted to SEK 9.2bn, which is nearly one billion less than during the corresponding period in 2006. In other words, the market for fixed call services demonstrates a reduction of nine per cent.

On 30 June 2007, there were 9 921 000 mobile telephone subscriptions in Sweden compared with 9 222 000 subscriptions on 30 June 2006. Of these subscriptions, 1.7 million were actively used for services in UMTS networks. The number of private subscriptions was 7 824 000, which corresponds to 80 per cent of all subscriptions.

Between the first half-year of 2006 and the first half-year of 2007, the number of mobile telephone subscriptions (contract subscriptions and pre-paid cards) increased by 7.6 per cent. The number of business subscriptions is increasing at a more rapid rate then previously. In absolute figures, private subscriptions are still increasing more than business subscriptions.

The service providers of mobile call services are still small. Their aggregate market share amounts to just less than one per cent of the total number of subscriptions, which corresponds to 88 000 subscriptions.

There has been a sharp increase in the number of traffic minutes in mobile networks over the past two years. Growth remained strong during the first half-year of 2007. This increase was just over 27 per cent between the first half-year of 2006 and the first halfyear of 2007. The fact that traffic in these 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 are making more calls, and one important reason for this traffic continuing to increase so considerably is largely due to the fact that over the past few years it has become less expensive to make mobile telephone calls. The proportion of mobile voice traffic of the total voice traffic (i.e., the total voice traffic in fixed and mobile networks) was 35 per cent during this period, which is an increase from 28 per cent compared with the first half-year of 2006.

Mobile customers continue to use mobile data services increasingly more regularly. From January to June 2007, just over 246 000 Gbytes of data were sent, which is three times more compared with the corresponding period of the previous year, when 71 000 Gbytes were sent. More and more people are also using their computers for mobile surfing. The number of subscriptions with data plug-in cards or USB modems increased from 92 000 on 30 June 2006 to 182 000 on 30 June 2007.

The growth in turnover for mobile call services increased by 7.5 per cent to SEK 8.8bn during the first half-year of 2007, which is a more rapid rate of growth than previously.

According to PTS's calculations, the market for data communications services to endusers has continuously reduced at around the same rate since the first half-year of 2002 onward. For the first half-year of 2007, turnover is estimated at SEK 2bn, which lies at the level of the first half-year of 2006. One reason for the value of the market decreasing is that there is a shift in progress from traditional data communications services, such as Frame Relay and leased lines, to primarily IP VPN.

The number of active customers with some form of Internet access increased from 3 377 000 to 3 526 000 between 30 June 2006 and 30 June 2007, which corresponds to a growth of approximately four per cent. The trend towards a growing proportion of fixed connections at the expense of dial-up connections continued during the first half of 2007. The number of subscriptions with fixed access increased by 23 per cent, from 2 126 000 to 2 609 000 between 30 June 2006 and 30 June 2007, while the number of customers with dial-up access decreased by 27 per cent, from 1 250 000 to 917 000. Subscriptions with fixed access now comprise 74 per cent of the total number of subscriptions.

As regards forms of access, xDSL is by far the most common form of access on the Internet services market. On 30 June 2007, 45 per cent of all residential customers were provided with Internet services via xDSL. The corresponding figure on 30 June 2006 was 39 per cent. The annual rate of growth in proportion of residential customers with Internet access lines with high transmission capacity increased considerably between 30 June 2006 and the corresponding point in time in 2007. On 30 June 2007, 41 per cent of households had Internet access with a transmission capacity of 2 Mbps or more and 16 per cent had Internet access with a transmission capacity of 10 Mbps or more. The corresponding figures for the previous year were 26 and 11 per cent respectively.

The economic importance of Internet access as a service in the Swedish telecommunications market continued to increase during the first half-year of 2007. In total, turnover in the market for Internet access was SEK 4.2bn, which is six per cent more than during the first half-year of 2006. It is primarily the subscriptions with fixed connections that are providing the operators with increasing revenues. These revenues increased by 12 per cent in value between the first half-year of 2006 and the corresponding period in 2007. The proportion of revenues from fixed access of total revenues for Internet revenue is continuously increasing and now comprises a full 94 per cent.

On 30 June 2007, the total number of television subscriptions in the Swedish market was 2 979 000. Cable networks represent the greatest proportion; just below 47 per cent of the total number of subscriptions were cable television subscriptions. The number of IPTV subscribers via the metallic access network has multiplied. On 30 June 2007, there were just over 163 000 subscribers, while the number of IPTV customers via access networks on 30 June 2006 was 13 000.

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