Boston, MA -- (SBWIRE) -- 02/19/2014 -- Executive Summary
BMI View: The Slovak telecoms regulator TU SR concluded its auction of 4G spectrum in December 2013, with all three major operators acquiring frequencies, as well as one new entrant. While growth in the Slovakian mobile market has stalled since around 2010, growth in 3G has been impressive, with 3G subscriptions accounting for around 30% of total mobile subscriptions at the end of 2012. With the entrance of a new player, we expect growth to accelerate over the long term, and LTE would be the main beneficiary of this.
- The mobile sector declined by 0.8% in 9M13, compared to growth of 0.8% during the same period in 2012.
- The market weighted average ARPU fell by 6.3% in 9M13
- The fixed-line sector contracted by 0.6% in H113.
- Mobile and fixed broadband subscriptions grew by 0.4% and 2.8% respectively in H112.
Risk/Reward Ratings (RRRs)
Slovakia is in fifth position in BMI's Q114 RRR table. The country scores above the regional average in all four categories of ratings, although its best score is in the Industry Risks category which reflects steady progress towards the alignment of its telecoms policies with wider EU policies. Slovakia's lowest score is in the Industry Rewards category, where its favourable rating for relatively high ARPUs and strong subscriber mix is counterbalanced by weak subscriptions growth and declining EBITDA figures.
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Competition in the mobile market received a boost in December 2013 with the licensing of a fourth network operator in the public auction for 4G LTE spectrum. The new player, Slovak Wireless Access Network (SWAN). is a smaller provider of broadband internet, TV and fixed line services in Slovakia, and also has a presence as an MVNO. BMI maintains that the entrance of a new player will provide a boost for LTE. However, we caution that SWAN will struggle to compete with its larger, established rivals in the mobile market. SWAN acquired the most 1,800MHz spectrum in the December 2013 spectrum auction with 2x15 MHz blocks, bidding just EUR6.6mn. However, the other three operators already had tranches of this spectrum prior to the auction and acquired spectrum in 800MHz and 2,600MHz.
Slovakia's telecoms regulator, TU SR, has designated 13 fixed-line and three mobile operators as having significant market power (SMP) in the wholesale markets for call termination in individual fixed and mobile networks. The 13 will be responsible for transparency, non-discrimination, allowing access and price regulation. The fixed SMP operators are: GTS Slovakia, Orange
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