Boston, MA -- (SBWIRE) -- 10/29/2013 -- Austria is home to one of the most developed telecoms markets in Europe, with high penetration of mobile and broadband services. However, Austria's all-important mobile market reported slower than expected growth in 2012 and Q113 as the weaker domestic economy weighed on consumer spending and made operators' low-cost no-frills services more appealing than ever. Market saturation also has a role to play in the slowdown of growth and operators must work harder to extract more value from the customers they already have. The postpaid user base contracted slightly as a result and was buoyed only by the higher value service from 3 Austria. This leaves some interesting opportunities in the MVNO space, and Tele2 and UPC appear to be ready to move in on the converged services opportunity.

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Key Data

- We estimate that the mobile market registered its first-ever quarter of decline in Q113. This was mostly due to purging inactive subscribers from user bases following the merger of 3 Austria and Orange, as well as Yesss! and A1 Telekom Austria.
- Price competition, cuts to mobile termination rates and IP substitution continued to drive down monthly ARPU in the mobile market. Data reported by Telekom Austria and T-Mobile showed respective declines of 16.2% and 17.6% y-o-y to Q113.
- Regulatory data show that the amount of data consumed is rapidly rising. In Q412, this was an increase of 62.1% y-o-y for a total of 21,570TBps.

Key Trends & Developments

After completing the acquisition of Orange in January 2013 Hutchison announced it would phase out the Orange brand from August 19 2013. The re-branding is part of a three pronged integration including the connection of Orange's GSM network to Hutchison's roaming partner, T-Mobile, the merging of Hutchison and Orange's 3G networks, and the construction of 6,000 2G,3G and 4G LTE base stations by the end of 2015.

LTE roll-out has continued, with Telekom Austria upgrading its 1,000th base station to support LTE services in July 2013. The network was made available in all state capitals, and nine other urban areas, giving population coverage of over 33%. Telekom Austria plans to extend coverage to a further 26 metropolitan areas by end-2013.

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