Central and Eastern Europe telecoms market: interim forecast update (14 countries)

Transcription

1 Research Forecast Report Central and Eastern Europe telecoms market: interim forecast update (14 countries) January 2015 Pablo Iacopino and William Hare

2 2 About this report This report for the European Core Forecasts programme provides: an interim update of our 5-year forecast of almost 250 mobile and fixed KPIs for the Central and Eastern Europe region as a whole and for 14 countries, which was previously published in August an explanation of the significant changes in this edition, compared with our previous forecasts. Revisions to our previous forecasts occurred mainly for the following reasons: market developments based on recent market events and latest reported operator and regulator data (2Q 2014) changes to the macroeconomic outlook, and competitive and regulatory environment changes to historical data because of newly available information. For the complete data set, see the accompanying Excel file at 1 For more information, see Analysys Mason s Central and Eastern Europe telecoms market: complete trends and forecasts (14 countries) Available at Figure 1: Summary of report coverage [Source: Analysys Mason, 2015] Geographical coverage Regions modelled: Central and Eastern Europe Countries modelled individually: Bulgaria Croatia Czech Republic Estonia Hungary Latvia Lithuania Poland Romania Russia Slovakia Slovenia Turkey Ukraine Major KPIs 1 Connections Mobile Handset, mobile broadband 2, M2M 3 Prepaid, contract 2G, 3G, 4G Smartphone, non-smartphone Fixed Voice, broadband, dial-up, IPTV, pay TV 5 Narrowband voice, VoBB ADSL/SDSL, VDSL, FTTH/B, cable, other Voice traffic Fixed and mobile Outgoing minutes, MoU Revenue Mobile Service 4, retail Prepaid, contract Handset, mobile broadband 2, M2M 3 Handset voice, messaging, data Fixed Service 4, retail Voice, broadband, dial-up, BNS, IPTV, pay TV 5 DSL, FTTH/B, cable, other ARPU Mobile SIMs, handset Prepaid, contract Handset voice, data 1 Data for business and residential segments is provided for many of these data series. 2 Includes USB modem, and mid- and large-screen, but not handset-based data. 3 M2M connections and revenue figures include mobile services only. 4 Service revenue is the sum of retail and wholesale revenue. 5 Traditional pay TV (excluding OTT video services).

3 3 Contents Slide no. 6. Executive summary 7. Telecoms and pay-tv service revenue will decline in Central and Eastern Europe as Russia peaks and growth in Turkey slows down 8. Mobile handset data presents the highest growth by far because smartphones and LTE take-up will offer monetisation opportunities 9. Pay-TV revenue will grow, driven by satellite and IPTV penetration, and the migration from analogue to digital cable 10. 3G smartphone momentum looks solid in most countries, but LTE takeup will be slow because devices are expensive and coverage is limited 11. By 2019, 72% of fixed broadband connections in CEE will be superfast two-thirds of them will use FTTH/B 12. Key regional changes since previous forecast: Major upward revisions to smartphone and FTTH/B connections, but downward revisions for voice 13. Forecast revision: Service revenue for 2019 is unchanged, but the shift from voice ( EUR2 billion) to data (+EUR2 billion) is faster than expected 14. Our 2019 telecoms retail revenue forecast is unchanged in most countries downward revisions occurred mainly in Czech Republic and Ukraine 15. Individual country forecasts 16. Czech Republic: Service revenue will decline faster than expected as MVNO competition intensifies and voice becomes a commodity Slide no. 17. Czech Republic: Residential mobile revenue will decline faster than business, and pay DTT will drive pay-tv net additions and revenue 18. Poland: Our service revenue forecast is unchanged, but faster-thanexpected LTE take-up will drive stronger data revenue growth 19. Poland: Traditional pay-tv household penetration will fall slightly between 2013 and 2019 as customers switch to free alternatives 20. Russia: Increased smartphone take-up is boosting contract revenue, and the migration from DSL to FTTH/B is accelerating 21. Russia: Business mobile revenue will outperform residential mainly because of M2M, while greater coverage will drive IPTV penetration 22. Turkey: LTE will arrive in 2015 and drive handset data revenue, while fixed broadband ARPU will remain high 23. Turkey: Turkcell Superonline s IPTV launch will drive pay-tv growth, and connected tablets are key to residential mobile growth 24. About the authors and Analysys Mason 25. About the authors 26. About Analysys Mason

4 4 List of figures Figure 1: Summary of report coverage Figure 2: Telecoms retail revenue by service type and total service revenue (telecoms and including pay TV), Central and Eastern Europe, Figure 3: Telecoms and pay-tv retail revenue growth by service type, Central and Eastern Europe, Figure 4: Telecoms retail revenue by business and residential service type, Central and Eastern Europe, Figure 5: Summary of key residential and business drivers and assumptions, Central and Eastern Europe Figure 6: Smartphones as a percentage of handsets, and LTE s share of total connections (excluding M2M), Central and Eastern Europe, 2013 and 2019 Figure 7: NGA penetration by country, Central Europe, Figure 8: NGA penetration by country, Eastern Europe, Figure 9: Summary of major changes compared with our August 2014 forecast for Central and Eastern Europe Figure 10: Telecoms retail revenue by service type and total service revenue, previous and new forecasts, Central and Eastern Europe, 2013 and 2019 Figure 11: Telecoms retail revenue by service type, total service revenue and growth rates, Central and Eastern Europe, Figure 12: Connections by type, and growth rates, Central and Eastern Europe, Figure 13: Telecoms retail revenue by country, previous and new forecasts, Central and Eastern Europe, CAGR Figure 14: Telecoms retail revenue by service type, and total service revenue (retail and wholesale), new and previous forecasts, Czech Republic, Figure 15: Summary of major changes compared with our previous forecast, Czech Republic Figure 16: Telecoms retail revenue by business and residential service type, Czech Republic, Figure 17: Summary of key residential and business drivers and assumptions, Czech Republic Figure 18: Telecoms retail revenue by service type, and total service revenue (retail and wholesale), new and previous forecasts, Poland, Figure 19: Summary of major changes compared with our previous forecast, Poland Figure 20: Telecoms retail revenue by business and residential service type, Poland, Figure 21: Summary of key residential and business drivers and assumptions, Poland Figure 22: Telecoms retail revenue by service type, and total service revenue (retail and wholesale), new and previous forecasts, Russia, Figure 23: Summary of major changes compared with our previous forecast, Russia Figure 24: Telecoms retail revenue by business and residential service type, Russia, Figure 25: Summary of key residential and business drivers and assumptions, Russia

5 5 List of figures Figure 26: Telecoms retail revenue by service type, and total service revenue (retail and wholesale), new and previous forecasts, Turkey, Figure 27: Summary of major changes compared with our previous forecast, Turkey Figure 28: Telecoms retail revenue by business and residential service type, Turkey, Figure 29: Summary of key residential and business drivers and assumptions, Turkey

6 Bulgaria Croatia Czech Republic Estonia Hungary Latvia Lithuania Poland Romania Russia Slovakia Slovenia Turkey Ukraine Rest of CEE Central and Eastern Europe Percentage of handsets Percentage of connections Central and Eastern Europe telecoms market: interim forecast update (14 countries) G smartphone momentum looks solid in most countries, but LTE take-up will be slow because devices are expensive and coverage is limited Figure 6: Smartphones as a percentage of handsets, and LTE s share of total connections (excluding M2M), Central and Eastern Europe, 2013 and 2019 [Source: Analysys Mason, 2015] 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 70% 60% 50% 40% 30% 20% 10% 0% Smartphones: LTE: G smartphone take-up has been rapid in CEE many markets have jumped from about 30% to 50% penetration (share of handsets) between 2012 and Growth will remain solid, particularly in countries with larger populations (Poland, Romania, Russia and Turkey). Price competition will make mobile data plans more affordable for the low-end market. Ukraine will have the region s lowest smartphone share of handsets in 2019 (52%) because 3G coverage will continue to lag behind other CEE markets. 4G take-up in CEE will generally be slower than in WE. Poland will lead LTE adoption in the region (19% of connections will be LTE in 2015, and 60% in 2019). The leading operators all had more than 60% LTE population coverage as of 2014, as did smaller operators Polkomtel and Play, which are progressing well in terms of LTE connection growth.

7 Retail revenue (CAGR ) Turkey Ukraine Romania Latvia Slovenia Estonia Russia Slovakia Bulgaria Hungary Czech Republic Croatia Poland Lithuania Central and Eastern Europe Central and Eastern Europe telecoms market: interim forecast update (14 countries) Our 2019 telecoms retail revenue forecast is unchanged in most countries downward revisions occurred mainly in Czech Republic and Ukraine Figure 13: Telecoms retail revenue by country, previous and new forecasts, Central and Eastern Europe, CAGR [Source: Analysys Mason, 2015] 2.0% 1.0% 0.0% 1.0% 2.0% 3.0% 4.0% Previous New Our most significant downward retail revenue growth revisions were for the Czech Republic (the huge number of MVNOs is intensifying competition, and voice services have become a pure commodity), and Ukraine (the ongoing crisis in Crimea and Eastern Ukraine has hampered economic growth some operators have stopped providing services in Crimea). We forecast that Russia and Ukraine have reached a peak in terms of telecoms revenue (mobile and fixed) in 2014 (although mobile revenue will continue to grow in both countries until 2015). The telecoms market in Turkey will be the latest to peak (in 2017) as improving mobile coverage in rural areas and falling prices will drive handset penetration up, and handset ARPU is still growing thanks to a migration to 3G smartphones.

8 24 Executive summary Individual country forecasts About the authors and Analysys Mason

9 25 About the authors Pablo Iacopino (Senior Analyst) focuses on forecasting and analysing telecoms markets in Europe and Latin America. He leads Analysys Mason s Global Telecoms Forecasts and European Core Forecasts research programmes, and is the lead analyst for research on the Latin America region. Pablo is also a key contributor to our European Country Reports and Telecoms Market Matrix research programmes. Pablo joined Analysys Mason in 2012, after 8 years in the telecoms industry. He worked for 5 years in Strategy and Investor Relations at Telecom Italia, where he was responsible for European telecoms benchmarking, followed by 3 years in investment banking as a senior equity research analyst covering telecoms stocks. Pablo specialises in industry analysis, benchmarking, modelling, forecasts and valuation. He holds a Master s degree in business administration and a postgraduate Master's degree in statistics and economics from Università degli Studi di Roma 'La Sapienza'. William Hare (Analyst) is the leader of Analysys Mason s Telecoms Market Matrix research programme, which tracks and compares telecoms metrics and market shares for all the major fixed and mobile operators in Europe. He also leads Analysys Mason s European Country Reports research programme. He joined Analysys Mason s Consulting division in 2007, before transferring to the Research division in William s primary specialisations include business and market modelling and data analysis, for both the mobile and fixed telecoms markets. He read mathematics at the University of Cambridge.

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