In our Q309 Telecommunications Report for the Czech Republic, we have expanded our fixed-line andinternet market data analyses sections while leaving the mobile market data analysis section stagnant, tobe updated in the subsequent quarter.
The Czech Republic has one of the most developed telecommunications markets in the Central andEastern European region. Growth in the mobile sector slumped to 4% in 2008, down from a disappointing5.9% in 2007. The mobile sector is approaching saturation, and we have forecast muted growth prospectsover the remainder of our forecast period as mobile penetration had reached 131.1% by the end of 2008.As subscriber growth opportunities dry up, market leader T-Mobile Czech Republic and the secondlargest operator Telefónica O2 Czech Republic have been pursuing higher value customers,concentrating on improving their subscriber mixes and encouraging users to use mobile data services.
Vodafone, the smallest GSM operator, has been growing both its prepaid and postpaid subscriber basesin an effort to prop up its market share, which stood at 21.3% at the end of 2008, up from 20.4% at theend of 2007. However, going forward, we are expecting the focus of all three operators to increasinglyturn to postpaid and mobile data customers. Growth in the 3G sector has been muted to date, but demandfor mobile internet does appear to be growing as demonstrated by Vodafone signing up over 400,000subscribers to a free mobile internet promotion in less than one quarter.
In our mobile content section, we explore the mobile value-added service (VAS) offered by the country’smobile operators. Free mobile internet promotions and innovative new multimedia content and VAS suchas Vodafone’s M-Wallet are being used to help drive up demand for mobile data services. However, thepromotions and prices cuts are expected to eat into operator ARPU, despite the expected growth in mobiledata usage.
The Czech Republic’s fixed-line sector is in decline, falling by an estimated 6% during 2008 to apenetration of 21.8%. However, this represented a slowdown in the rate of fixed-line decline, whichincumbent Telefónica O2 attributed, in part, to the marketing of double- and triple-play packages offeringfixed lines, broadband and TV or mobile. Nevertheless, the market is still expected to continue its decline,albeit at a slowing rate, as customers to continue to drop their fixed lines in favour of the more expedientmobile and the cheaper VoIP services. Owing to the intense competition in a declining sector, a numberof alternative operators have revealed plans to concentrate on the more lucrative corporate segment.
The Czech Republic’s broadband sector grew by over 14% during 2008, taking the country’s broadbandsubscriber base to just over 1.5mn but with penetration still under 15%. Telefónica O2 is dominant in thebroadband sector with its ADSL offering, although competition is increasing from alternative operatorsand different technologies. Cable operator UPC Czech Republic had an estimated more than 20% marketshare at the end of 2008 after reporting solid growth during the year, both in its broadband and bundledservice lines. To combat cable, Telefónica O2 offers an IPTV service called O2 TV, which grew over56% during 2008 to reach 114,500 subscribers.
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