Recently published research from Business Monitor International, "Italy Telecommunications Report Q1 2013", is now available at Fast Market Research
Boston, MA -- (SBWIRE) -- 01/09/2013 -- BMI View: Operators in Italy's mobile and broadband markets face considerable operating challenges in 2012. The local economy has entered recession and will likely lead to higher customer churn rates and customer winback/retention costs, even as the operators continue engaging in price wars focused on the mass consumer market and invest heavily in additional spectrum, to further 3G/3.5G/3.75G network infrastructure and begin developing their next generation 4G services. At the same time, further mobile termibnation rate (MTR) reductions will hit operators' revenues in 2012 and again in early 2013, leaving them little room to manoeuvre. The main bright spot is in the value-added services (VAS) market, where consumption of non-voice services, particularly video and games, is booming.
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¦ Mobile ARPU declined sharply in Q312 as a result of the implementation of steep MTR cuts in July 2012, with the leading three operators reporting declined of between 5.3 and 6.8% q-o-q in Q312. ¦ The broadband market contracted for the first time in Q212. Both wireline and dedicated mobile broadband subscriptions declined, which BMI believes to be a consequence of market saturation and the weak operating environment. We adjusted our forecast accordingly.
Key Trends & Developments
There have been significant developments in both the wireless and wireline data markets in the past quarter. Between October and November 2012, Vodafone, Telecom Italia and 3 Italia launched LTE services for the first time in Italy. They are initially targeted at higher income, large urban populations, but all three operators announced plans to increase the coverage of their services through 2014, covering the majority of towns across the country. BMI expects LTE services to pose a significant challenge to the country's wireline broadband service providers, which are currently providing the majority of services over aging infrastructure not capable of providing comparable download speeds.
The competitive threat of next generation wireless data services seems to have catalysed a wave of activity in the wireline market. Telecom Italia has already committed to investing in upgrading its network to fibre. However, this was followed by alternative provider Fastweb's commitment in September 2012 to invest EUR400mn to extend its next generation fibre-optic network to 20% of the country's homes and businesses by 2016. Meanwhile, the two operators agreed in September 2012 to find common opportunities to share investment and costs in the rollout of their next generation infrastructure. The first example of this cooperation was in Monza where the two operators agreed in October 2012 to lay a combined 230km of fibre-optic cable, covering 110,000 citizens and 10,000 businesses.
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