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Annual economic Report I 2014

European Telecommunications Network Operators Association

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Table of content
1/

ETNO: Europes digital spine p4

2/

Perspectives on the Industry p6

a) Taking the consumers view on digital markets. Its not the 90s anymore
By Daniel Pataki, Director-General, ETNO

p6

b) Investing in Europes digital networks: are we thinking big enough?


By Luigi Gambardella, Executive Board Chairman, ETNO

p7


c) Note to the new EU leadership: markets have changed, what about regulation?

By Didier Pouillot, Head of Telecom Strategy BU at IDATE
p8

3/ Market trends p10
4/ Revenue and service trends p16

5/ Investment trends p18

6/ Broadband p20
7/ Next Generation Access networks (NGA) p22

8/ Internet usage and revenues p24
9/

Ranking in European and World top companies p28

1 ETNO: Europes digital spine

ETNO has been the strong and reliable voice of Europes


telecommunications network operators since 1992.
ETNOs 36 member companies* and 9 observers* from Europe
and beyond are the backbone of Europes digital progress and, in
a fully digitised future, they will be enablers of Europes progress
as a whole. Thanks to their investment and innovation in new
e-communications services, they have been and will continue to
be the enablers of a smarter, more competitive and prosperous
continent.
ETNO member companies investment accounted for almost
60% of fixed and mobile CapEx in 2013 (EUR 27.8bn). In 2013,
ETNO member companies employed over 625,000 people, thus
being the main employer in the sector.
The telecom industry is instrumental to accelerating the
implementation of a European Digital Society, leveraging its
assets, expertise and knowledge and serving as a key agent of
change. ETNO closely contributes to shaping the best regulatory
and commercial environment for its members so they can
continue to deliver top quality services to European consumers
and businesses.
*December 2014

2 Perspectives on the Industry

Investing in Europes digital networks:


are we thinking big enough?
By Luigi Gambardella, Executive Board Chairman, ETNO
Taking the consumers view on digital markets.
Its not the 90s anymore
By Daniel Pataki, Director-General, ETNO
They may call us dinosaurs and say we are against
innovation, but having been part of the telecom sector for
many years, first as a regulator and now as an industry
representative, I can say that I do not feel nostalgic for the
90s. And neither do ETNOs member companies.
There is, on the contrary, a high level of excitement in the
industry that the new market trends while challenging for
traditional business models bring the promise of a return
to growth.
This might sound contradictory, as I write to introduce a
Report showing a contraction of Service Revenue growth in
2013 and, highly likely, also in 2014.

Second, ETNO companies do more than just respond


to these trends: they are fully embracing them. You will
hear the COOs of our companies talking about customerobsessed companies, driven by consumer needs.
The demand profile of customers has become more
granular and more individualised in terms of the products
and services they need. For this reason companies are
adapting in order to be flexible enough to respond to this.
ETNO companies are not only the digital spine of Europe,
they also empower and deliver highly added-value services
such as cloud computing, machine-to-machine or e-health
applications.

Third, the new EU leadership, which took office in November


2014, has come across as being fully aware of the
First, the figures in this report show how excited consumers challenges and opportunities of Europes digital economy.
are about being constantly connected and being able to The very fact that Andrus Ansip has been appointed viceenjoy online services. The number of subscribers, for both president for the Digital economy and society, in charge of
mobile and fixed broadband is on the hike since 2007 and coordinating various commissioners, is a clear sign that the
is not showing signs of slowing. At the same time, use of new Commission wants to take a horizontal approach to
online search tools and social networks is also expected to digital policies.
Together with the new digital Commissioner Gnther
grow and to continue driving demand.
What is more, users are also expected to make advanced Oettinger, Mr. Ansip will steer the work of the college in
use of their mobile and fixed connections, with more and order to achieve coherent and proactive action on digital.
more Europeans using e-commerce or Location Based
Further take-up of innovative services, the fast development
Services, for example.
Clearly, digital is not going away, but on the contrary
of companies and a fresh, new approach to policymaking
is becoming the driver of a better, smarter society.
can collectively deliver a stronger digital economy for
Europe. Telcos are essential to achieving this objective, they
are ready to play their part and most importantly to open
a fruitful dialogue with the new EU leadership.
However, our confidence comes from three main facts.

From the very beginning, ETNO has been a strong advocate


for creating an investment-friendly environment in Europe.
The reason behind this is double-folded.
On the one hand, our companies are the biggest investors in
Europes telecommunication networks. Investing in worldclass networks is our business, and the figures in this years
report once again send a strong signal about this.
On the other hand, while talking investment might not be
so exciting for some, we believe that it is the very strength
of our Continent. First, because better digital networks
will provide European companies, education system and
governments with an essential competitiveness factor.
Second, because more investment in networks can drive
growth per se, but also thanks to the positive externalities
that they are expected to generate.
I am a believer in investment as a driver for growth. For this
reason, the Annual Economic Report 2014 gives me the
opportunity to ask an important question, a political one:
is todays level of investment in networks up to our digital
ambitions? Are we thinking big enough here?
For years, we have warned stakeholders and policymakers
that the pressure on telcos revenues in Europe would
impact investment. The ability of our companies to create an
adequate return is pivotal to current and future investment,
especially at a time in which we aim at upgrading our
networks to the data age.
In this years report, you will find that investment growth in
EU telecoms has gone slightly negative for the period 20122013. This is in sharp contrast with the US market, where
investment growth was 5.7%.
I might like thinking too big. However, I am truly convinced
that even flat levels of investment growth are unacceptable.

They are unacceptable from the industry viewpoint and


I believe that they are also unacceptable from a political
perspective.
In this context, I am confident that the new European
Commission will help the industry return to growth. President
Jean-Claude Juncker and Commissioner Gnther Oettinger
have been very vocal in underlining how investments and
infrastructures will be the focus of their political action.
Currently, our Report estimates that every year there are
45 to 50 billion investments in the sector. Clearly, the new
Commission also believes that this figure should increase.
And I share their view.
ETNO companies are investing more than others not only
as far as the absolute numbers are concerned, but also if
you look at the share of revenues devoted to CAPEX. These
figures are highly relevant also from the policy and political
standpoint.
ETNO has strong ideas on how to boost those numbers. Our
companies believe most importantly in reform. The objective,
this is our take, should be to update the telecoms regulatory
framework, help the single market through an ambitious
spectrum reform and address regulatory imbalances in the
digital value chain.
These changes were tested in various studies and reports
published by our Association, repeatedly confirming that
reform would result in fresh investments and new growth
opportunities for the overall European economy.
The potential gain at stake is big. What is more important,
this gain is for all. This is the reason why I will always support
all those who think big and push reform and change in the
interest of the entire Continent.

2 Perspectives on the Industry

Note to the new EU leadership:


markets have changed, what about regulation?
By Didier Pouillot, Head of Telecom Strategy BU at IDATE
their networks in 2013 as they did back in 2008. The ETNO
member companies are at the forefront of this process,
accounting for almost 60% of fixed and mobile CapEx. One
needs to emphasize that telcos are making these sustained
investment efforts against the background of substantial
uncertainty. These uncertainties do not only arise from an
overall difficult economic environment, but major issues
Europeans remain keen users of electronic communications are related to the emergence of a new ICT ecosystem with
services. As they use an increasing number of different telcos to reposition in an extended value chain. Telcos are
devices to access their favourite services and contents, under pressure from players like device makers and OTTs
the number of total access lines continues to grow and on their own turf. However they also have a number of levers
demand for fixed and mobile data is rising at an impressive at their disposal to turn their fortunes around and become
pace. Nevertheless, despite being at the core of this digital growth engines again.
revolution, the telecoms industry in Europe is in the rather
paradoxical situation where it is facing a period of five On the one hand, there are promising new ways of doing
consecutive years of declining revenues. In nominal terms, business. New pricing models like tiered pricing and data
telecom service revenues in Europe were almost 12% lower sharing can be a means of raising average revenue per user
in 2013 than they were in 2008, while the number of access or access line respectively. The development of propositions
lines (fixed broadband and mobile) increased by more than designed for two-sided markets, like sponsored data offers,
will allow telcos to tap into new sources of revenues.
13% over the same period.
As in previous years, IDATE is delighted at the opportunity
to contribute to the current edition of ETNOs Annual
Economic Report. This report will provide a wealth of data
delivering a snapshot of the state of the European electronic
communications market and the leading role played by
ETNO members across its various sub-segments.

At the same time, operators need to invest massively


to upgrade their networks to fibre and LTE to meet user
demand for higher bandwidth, more traffic and more
mobility. And indeed operators are actually embracing the
challenge of bringing their networks up to speed and
rolling out the new infrastructures which are vital to Europes
broader economic recovery. Despite shrinking revenues and
margins, telecom operators invested virtually as much in

On the other hand, there is a multitude of new markets to


be developed. For instance the success of M2M and its
potential to create new solutions for vertical markets think
smart meters, healthcare etc. - provide innovative telcos with
a myriad of opportunities. Therefore, despite going through
an adverse market environment for many years already, the
telco industry is eventually bound to make comeback the
sooner, the better for the European economy.

The telecom industry is instrumental


to accelerating the implementation of a
European Digital Society.

3 Market trends
Mobile on the hike

Towards the end of the slump?


Growth levels to improve
The European telecommunications industry continues to face a difficult situation with revenues falling every year since
2009. In 2013, this decline even accelerated and revenues fell by -4% in the ETNO perimeter compared to -2.9% in the
previous year. The downward trend continued throughout this year and telcos revenues will be below 2013 levels by year.
Despite this unfavourable development, there are signals that the glass may have ultimately been half-full rather than halfempty in 2014. The downturn seems to be losing momentum and growth levels in Europe have become less
negative than before. In the ETNO perimeter, overall telecom services growth will be -2.7% in 2014 and in the EU-5,
telecom services will fall at a rate of -2.5% compared to twice as much the previous year. IDATE expects this improvement
to last through 2015 and growth rates to eventually return to positive levels in 2016.

Regarding access, long term trends continue to be valid throughout 2013 and 2014: Mobile is the dominant form of
access, with the number of subscriptions approaching the 800 million mark in Europe. Compared to 2012, the number
of subscribers rose 0.9% to reach 782 million in 2013 and is expected to hit 794 million by the end of this year. Fixed
broadband subscriptions have risen from 157.7 in 2012 to 163.8 million in 2013 and are expected to stand at 170 million
by the end of 2014. The growth rate is slowing down a little as the penetration rate progresses but still reach 3.9% in
2013. Demand for traditional fixed lines has further decreased by -5.5% and -5.2% in 2013 and 2014 respectively. This
means a decline of roughly 10million lines per year, from 189.7million lines in 2012 to 179.3 and 169.9 million lines in
2013 and 2014 respectively. The prolonged growth of the overall number of access lines is definitely a promising trend for
the industry and a lever for a return to growth in the future. ETNOs members are well positioned in these markets. Their
share of 51% and 42% of subscribers in fixed broadband and mobile markets, respectively, across the ETNO perimeter
clearly shows they enjoy a high level of user confidence.
ETNO companies are lead employers
ETNO member companies are also important players in the labour market. Across their collective footprint, ETNOs
members employed more than 625,000 people in 2013, accounting for 79% of total sector employment.

In respect to the different services, revenues from traditional fixed lines continue their long-term decline as ever more
users switch to broadband or abandon their fixed line altogether. Mobile revenues continue to contract despite the evergrowing popularity of mobile broadband services which contributed to ameliorating the growth rate to 1.8% in 2014,
compared to -4.5% in 2013. As in previous years, fixed broadband is the only segment sporting positive growth rates.
From the industrys perspective it is particularly encouraging that growth in 2014 will have been higher than in 2013: while
growth seemed to be flattening out, the risk of it becoming negative seemed quite real.
The investment gap is widening
The European market remains less dynamic in terms of growth and investment than its counterparts in the US and Japan.
However, contrary to the European situation, growth in the latter geographies is slowing down. While it remains solidly
positive in the US with 2.4% in 2013 and an expected 1.8% for 2014, growth became negative in Japan in 2013 with
-0.4% and is to decrease further in the course of this year. The picture is similar with respect to investment. While in
the light of falling revenues, Europes telcos have been forced to slightly scale back their absolute level of investment in
2013, their peers in the US have continued to increase their capital expenditures by more than 5% compared to 2012.
Investments in Japan increased as well, but at a significantly more moderate rate of 0.4%.

10

In 2013, ETNO members were


the biggest employers in the sector

11

3 Market trends

Telecom service revenue growth (%)

350.0

+ 1.1% - 2.5%

300.0

4.0%
- 1.0%

- 1.6% - 3.1%

2011
2012

6.0%

Telecom service revenues in Europe


(incl. Turkey, excl. Georgia, Russia, Ukraine, EUR bn)

- 4.0%

250.0

2010
2011

2007
2008

2012
2013

2013
2014

- 1.8%
2.0%

200.0
0.0%

150.0
100.0

-2.0%

50.0
0.0
2007

2008

2009

2010

2011

Mobile services

Data & Internet

2012

2013

2008
2009

-4.0%

2014

Fixed telephony

2009
2010

-6.0%
EU-5

EU-15

EU-28

ETNO perimeter

USA

Japan

European telecom revenue growth vs. IT services vs. TV (ETNO perimeter, %)


3.0%
2.0%
1.0%

+ 0.8%

0.0%
-1.0%

IT services

-2.0%
-3.0%

+ 2.1%

Telecom services

- 0.3%

+0.2%

TV services

EU-5
EU-15
EU-28
ETNO perimeter
USA
Japan

20072008

20082009

20092010

20102011

20112012

20122013

20132014

0.5%
0.4%
0.7%
1.1%
1.8%
-4.4%

-2.3%
-2.5%
-2.7%
-2.5%
-0.7%
-2.3%

-1.2%
-1.2%
-1.5%
-1.0%
1.0%
-1.4%

-2.1%
-2.1%
-2.2%
-1.5%
3.0%
-0.8%

-3.3%
-3.6%
-3.6%
-2.9%
4.1%
0.9%

-5.0%
-4.7%
-4.5%
-4.0%
2.4%
-0.4%

-2.5%
-2.3%
-2.1%
-1.6%
1.8%
-1.0%

- 3.1%
-4.0%

-4.0%
-5.0%
2011-2012

2012-2013

Source: IDATE
12

Source: IDATE
13

3 Market trends
OTT vs. telecom revenue growth (EU-28, %)
2012
2013

25%

10.0%
8.0%
6.0%
4.0%
2.0%
0.0%
-2.0%
-4.0%
-6.0%
-8.0%
-10.0%
-12.0%

2007
2008

18%

13%

2017
2018

12%

10%

10%
5%

2011
2012

2009
2010

-5%

2012
2013

EU-15

EU-28

-2.3%
-1.8%
-1.2%
-1.2%
-3.4%
-1.0%

20082009
-7.3%
-7.1%
-5.6%
-5.6%
-10.0%
3.3%

1%

2%

-10%

ETNO perimeter

USA

Japan

OTT

Access to telecom services in Europe


(million lines/subscribers, incl. Turkey, excl. Georgia, Russia, Ukraine)
1200.0

20072008

1%

-1%

-2%
-4%
Telecom

EU-5
EU-15
EU-28
ETNO perimeter
USA
Japan

2016
2017

17%

0%

EU-5

2015
2016

15%

2010
2011

2008
2009

2014
2015

20%

20%

Investment in the European telecoms sector compared to the US and Japan


(CAPEX growth of the EU telecoms sector vs. CAPEX in the USA and in Japan, %)

2013
2014

20092010
3.8%
2.5%
0.4%
0.4%
2.3%
-2.6%

20102011
4.3%
3.8%
4.6%
4.6%
2.6%
-4.7%

20112012
0.7%
0.5%
0.8%
0.8%
5.3%
7.5%

20122013

109.6

124.0

135.2

143.5

151.5

157.7

163.8

170.0

664.2

709.3

725.1

736.7

761.7

774.3

781.5

793.8

246.4

236.2

223.0

213.6

201.8

189.7

179.3

169.9

1000.0

-1.0%
-0.1%
-0.4%
-0.4%
5.7%
0.4%

800.0
600.0
400.0
200.0
0.0

2007

2008

2009

Broadband subscribers

Source: IDATE
14

2010

2011

Mobile subscribers

2012

2013

2014

Fixed access lines

Source: IDATE
15

3 Market trends

Teledensities in Europe
( lines/subscribers per population, incl. Turkey, excl. Georgia, Russia, Ukraine)
140.0%
120.0%

122.0%

119.9%

112.8%

Telecom employment (ETNO perimeter, 000s)

129.6%

100.0%
791.7

80.0%
60.0%
40.0%

41.9%

39.9%

24.4%
20.9%

23.3%
18.6%

20.0%
0.0%

2010
Fixed

37.5%

2011
Mobile

25.3%
22.8%

2012

Internet

29.7%

27.7%
27.2%

2013
627.4

2013

Broadband
0

200

400

ETNO members

ETNO members market share (% of subscribers)

600

800

1000

total sector

60.0%
51.0%

50.0%
42.4%

43.6%

46.0% 45.2%

47.0%

43.6%

41.6%

ETNO members retail revenues (EUR bn)

40.0%
30.0%

Total
o.w. fixed
o.w. mobile

20.0%
10.0%
0.0%

EU5
Fixed BB

EU15

EU28

NMS-13

EU-28

ETNO
perimeter

RoW

Total

132.9
66.4
66.6

16.8
5.9
10.9

149.7
72.3
77.5

163.4
81.1
82.3

73.8
17.3
56.6

237.2
98.3
138.9

ETNO
perimeter

Mobile

Source: IDATE
16

EU-15

Source: IDATE
17

4 Revenue and service trends


664,2

Telephony lines (million)


900.0
In 2014 we can observe the continuation of the major
trends that have shaped the telecoms landscape over the
last years. The inevitable decline of PSTN/ISDN fixed
lines goes on, as IP-based offers and mobile phones
are adopted instead. By the end of 2014 we expect fixed
broadband subscriptions to outnumber traditional circuitswitched fixed lines for the first time. The margin will be
very narrow, 170m broadband lines compared to 169.9m
but broadband will rapidly expand its lead. In parallel with
this evolution the number of managed VoIP customers is
also increasing. Their number will reach 81m by the end of
the year, up from 73.3m in the previous period.
For the operators, however, growing demand does not
translate into higher revenues. The volume effect of
increasing subscriber numbers is outweighed by falling
average revenue per access. In the EU28, mobile ARPU will
have lost some 25% of its value between 2008 and the end
of 2014. Hence, in spite of the fact that mobile penetration
stood at 129% of population in Europe in 2013 and will
keep growing, operators earn less revenues year after year.

Price competition, substitution of traditional services by OTT


offers (in 2013, the number of SMS sent fell for the first time
in 2013 in the UK according to a Deloitte report) but also
regulatory intervention with respect to call termination and
roaming charges drive this trend. MNOs are experimenting
with innovative pricing such as tiered pricing or two-sided
market offer to boost average revenue per subscription
levels. The growing adoption of 4G will help operators in
this task as the standard has been designed to facilitate
differentiation of quality of service levels.
Average revenues per fixed broadband access are higher
today than they were in 2008, but have embarked on a
downward trend since peaking in 2012. Consequently, the
growth of overall fixed broadband revenues has flattened
out, although the perceived risk that broadband revenue
growth could turn into the negative range has not seemed
to materialise so far. Broadband will therefore keep
its role as the industrys main growth engine at this
point in time.

793.8

800.0
700.0
600.0
500.0
400.0
300.0
200.0

169.9

100.0

81.0

0.0
2007

2008

2009

POTS lines

2010

2011

2012

2013

2014

Mobile subscribers

VolP lines

ARPU evolution (EU-28, EUR/month)


30.0
25.0
20.0

24.9

24.0

19.2

23.6

23.0

22.9

22.6

22.3

18.2
17.0

16.5

15.9

15.0

15.1

14.1

10.0
5.0

Towards the end of the slump? If we look at telecom


service revenues, a return to growth is possible in 2016

0.0
2008

2009

Fixed BB

2010

2011

2012

2013

2014

Mobile

Source: IDATE
18

19

5 Investment trends
Investment in fixed and mobile networks
(tangible CapEx, ETNO perimeter, EUR bn)
35,0
30.0
For the time being, European telecom operators are weathering the storm and continue to build new ultra-fast fixed and
mobile access network and upgrade their backhaul facilities despite the tough economic conditions in the market.
European operators have largely maintained their investment levels in absolute (-0.4% in the ETNO perimeter in 2013)
thereby actually devoting more of their resources to new infrastructures in relative terms as the Capex to revenue ratio
increases.
Within the geographic footprint of ETNO, operators have invested EUR 46.7bn in their networks in 2013. As in the preceding
years, the majority of investment is coming from ETNO members, which accounted for more than 59% of total network
CapEx in 2013.
The majority of the funds invested is directed to fixed networks, reflecting notably the cost of civil engineering works
for deploying fibre closer to the end user. Last year, in total EUR 26.3bn or 56% of overall CapEx, were invested in fixed
infrastructure. The companies represented by ETNO contributed EUR 16.3bn to this effort which translates in 62% of total
fixed CapEx.
In the mobile sector, total CapEx amounted to EUR 20.4bn in 2013. ETNO members were also the leading investors in this
segment, with 56% - or EUR 11.4bn - coming from their side.

30.1

25.0
20.0

10.9

11.1

12.3

28.0

11.5

17.4

16.9

28.1

27.0

27.0

27.8

11.3

11.4

19.0

18.5

17.5

19.0

15.0
8.4

10.0

16.1

15.9

17.8

5.0

8.5

0.0

8.1

8.7

16.6

10.0

2011

ETNO member operators :

fixed

mobile

Other operators :

fixed

mobile

9.0
16.3

9.9

2010

2009

9.0
16.6

9.4

8.7

2008

8.5

2012

10.0

2013

Total sector investment


50.0
ETNO members aggregated investments (EUR bn)

2013

40.0

35.0

46.7

30.0

30.1
27.0

30.0

27.0

28.1

28.0

27.8

25.0
20.0

27.8

20.0
15.0

10.0

10.0
0.0
ETNO memberss CAPEX

5.0

Total sector CAPEX

0.0

2008
EU-15

Source: IDATE
20

2009

2010

2011

New Member States (EU13)

2012

2013
EU-28

ETNO perimeter

Source: IDATE
21

6 Broadband
Fixed broadband connections by technology (ETNO perimeter)

2013

5.9%

3.3%

18.7%

72.2%

DSL

Cable modem

FTTH/B

Other technologies (LAN, FBWA, satellite...)

Take-up of broadband services


continues to progress across Europe

Fixed broadband vs. mobile broadband take-up (ETNO perimeter, mln subscribers)
Take-up of broadband services continues to progress across Europe. On the one hand there are still new customers
coming to the broadband market, pushing the penetration rate to 27.2 lines per 100 inhabitants in the ETNO perimeter. On
the other end of the market, the transition from legacy broadband to ultra-fast access lines continues. In total we
expect the number of fixe broadband lines to hit the 170 million mark in ETNO territory by the end of 2014.

450.0
400.0

391.2

350.0
300.0

In terms of access technologies DSL is still by far the most common choice. 72% of all broadband access are based on
this technology. However while the total number of DSL subscribers continued to grow, its market share actually fell by 2.5
percentage points in 2013, as competition from cable platforms and fiber-based telecom networks is getting more intense.
Going forward we can expect this trend expect to continue and gather momentum over time.

250.0
200.0

170.1

150.0
3G reached the mass market years ago and will count 391m subscribers at year-end. This represents a very healthy
growth rate of 5.6% in 2014. 4G has clearly moved ahead on the S-curve and has reached the phase of rapid
expansion. In 2012, the ETNO perimeter totalled 3m 4G customers. By 2013 this number had risen to 23m and will
reach 65.5m subscribers at the end of this year. This number remains small compared to the total amount of mobile
subscriptions in the market, but the trend clearly shows that Europe is beginning to realise its catch-up potential in 4G
with the worlds leaders in Asia and North America. The fact that with 4G, for the first time, a wireless technology can really
compete with some of the best fixed-line broadband products in terms of performance, will further boost its adoption,
notably in rural areas where fibre deployment is less likely to happen.

100.0
65.5

50.0
0.0
2007

2008

2009

2010

Fixed broadband subscribers

2011

2012

2013

3G subscribers

2014
4G subscribers

Source: IDATE
22

23

7 Next Generation Access networks (NGA)


Standard broadband and NGA coverage (% of households)

So-called next-generation access networks keep making


inroads into the market to make themselves increasingly
current-generation access networks. The different
networks have expanded their gross coverage to more
than 190m homes across ETNOs footprint. Of these lines,
78.2m are based on docsis3, VDSL accounts for 74.5m
lines whereas FTTH/B is available to 42.4m households.
1.8m homes are passed by other types of NGA networks.

thus slightly more than the previous years 16%.


FTTx/docsis3 is currently also the most commonly chosen
form of access with more than 14m customers. FTTH/B has
the highest take-up rate with 9.6m actual users across its
footprint. VDSL on the other hand totals 8.3m subscribers
at the end of 2013.

ETNOs members are amongst Europes foremost


It is also encouraging to see that the adoption of ultra- NGA players. Collectively they account for 68m or 36% of
fast internet access is making good progress. 34.5m all NGA lines. In the FTTH/B arena, ETNO members account
million users have subscribed to an NGA-based offer. This for no less than 49% of all access lines.
corresponds to a take-up rate of 18% of the homes covered,

Main technologies/network architecture models (homes passed at end 2013)

FTTH/B
other FTTx* (incl. VDSL, FTTLA, LAN)

Total EU

ETNO members

% ETNO members

42.4
154.5

20.8
47.9

49.0%
31.0%

NGA Coverage
120.0%
100.0%
80.0%
60.0%
40.0%
20.0%
Albania
Austria
Belgium
Bosnia and Herzegovnia
Bulgaria
Croatia
Cyprus
Czech Republic
Denmark
Estonia
Finland
France
FYROM
Germany
Greece
Hungary
Iceland
Ireland
Italy
Latvia
Liechtenstein
Lithuania
Luxembourg
Malta
Netherlands
Norway
Poland
Portugal
Romania
Slovakia
Slovenia
Spain
Sweden
Switzerland
Turkey
UK
ETNO perimeter

0.0%

FTTH/B

VDSL

FTTx/D3.0

FTTx+LAN

Source: IDATE
24

Albania
Austria
Belgium
Bosnia and Herzegovnia
Bulgaria
Croatia
Cyprus
Czech Republic
Denmark
Estonia
Finland
France
FYROM
Germany
Greece
Hungary
Iceland
Ireland
Italy
Latvia
Liechtenstein
Lithuania
Luxembourg
Malta
Netherlands
Norway
Poland
Portugal
Romania
Slovakia
Slovenia
Spain
Sweden
Switzerland
Turkey
UK
(1) : as a % of population

Standard (1)

VDSL (2) (3)

FTTx/D3.0 (2) (3)

FTTH/B (2)

na
100%
100%

7%
62%
86%
na
0%
16%
0%
29%
49%
39%
0%
8%
0%
32%
26%
40%
81%
87%
17%
na

0%
36%
61%
na
56%
na
0%
27%
61%
79%
68%
12%
16%
56%
0%
55%
0%
0%
0%
0%

0%
7%
0%
0%
53%
9%
0%
5%
40%
41%
25%
23%
18%
4%
na
23%
55%
2%
11%
100%

0%
94%
0%
80%
na
28%
0%
0%
0%
3%
4%
5%
96%
28%
72%

na
na
0%
37%
0%
19%
96%
24%
19%
36%
54%
6%
40%
na
49%

97%
39%
na
28%
40%
4%
69%
29%
33%
42%
35%
10%
19%
21%
1%

100%
97%
100%
98%
100%
96%
100%
100%
na
100%
100%
98%
98%
98%
99%
99%
na
98%
100%
100%
100%
98%
98%
100%
98%
93%
98%
99%
100%
100%
100%
100%

(2) : homes passed as a % of households

(3) : capable of speeds over 30 Mbps

Source: IDATE
25

8 Internet usage and revenues


Use of online search (% of fixed internet users)
100.0%
The most popular use of the Internet is for conducting
online searches. Already in 2014 over 90% of Internet
users perform search activities in France, Germany and UK,
whilst over 80% of Internet users also perform search in
Italy and Spain.
Social networking is another activity which is highly
popular. Social networking is particularly popular in the UK
and Italy, where its user penetration among Internet users
is expected to exceed 70% by 2017. Germany and France
sees lower penetration, with 59% and 61% Internet user
penetration respectively in 2017; these two countries have
always seen lower penetration since the early days of social
networking. Nevertheless, social networking continues to
become an increasingly important mode of communication,
and its growth is expected to continue despite having
passed the mass adoption phase.
E-commerce is a market which sees a wide discrepancy
between users within the EU5. Already in 2014 the UK sees

80% of Internet users also being e-commerce users, with


Germany not far behind with 75%. France comes next with
61%, but then Spain and Italy sees a noticeable drop in user
penetration at 36% and 25% respectively. This can at least
in part be thought to be caused by the economic situation of
the respective countries, and also the level advancement in
IT infrastructure on the whole and the associated trust the
Internet players have in the countries.
The dynamics of the internet market are also reflected
on the revenue side. While telcos are struggling to turn
the negative revenue trend around, OTTs activities are
enjoying substantial and sustained growth, which will
certainly decline over the years to 2018, but will remain
in the double-digit range nonetheless. While OTTs are
certainly growing the size of the electronic communications
pie and are not only eating into the telcos share, the
contrast between telco and OTT growth is certainly striking
and underlines the need for a level playing field between the
two groups of players.

92.5%

95.3% 94.2% 98.6%

97.0% 97.0%
80.8%

84.0%

83.9%

87.1%

75.0%

50.0%

25.0%

0.0%
UK
2014

France

Germany

Italy

Spain

2017

Use of e-commerce (% of fixed internet users)


100.0%
79.6% 82.0%

75.0%

Use of social networks (% of fixed internet users)


75.0%

66.2% 72.0%

68.1% 71.0%
59.1% 60.8%

56.8% 58.5%

75.0%
60.6%

63.2% 65.1%

79.6%

64.3%

50.0%

43.1%
32.9% 36.1%

50.0%
24.7%

25.0%
25.0%
0.0%
0.0%

UK
UK
2014

France

Germany

Italy

Spain

2014

Germany

Italy

Spain

2017

2017

Source: IDATE
26

France

Source: IDATE
27

8 Internet usage and revenues


Use of location-based services (% of mobile subscribers)
50.0%

47.9%
44.5%
40.7%

OTT IP messages (million messages)


600

567

500

507

40.7%
35.9%

35.0%

33.1%

34.6%

28.5%
24.1%

25.0%

424

400
300

243
200

0.0%
UK

156

2014

100

France

Germany

Italy

Spain

2017

0
2012

2013

UK

2014

France

2015

2016

Germany

2017
Italy

2018
Spain

OTT VoIP minutes (billion minutes)


25

23

22
18

20

18
15
15
10

Consumer habits are evolving: use of IP messaging,


IP calls and location-based services is increasing

5
0
2012
UK

2013

2014
France

2015

2016
Germany

2017

2018
Italy

Spain
Source: IDATE

28

Source: IDATE
29

9 Ranking in European and World top companies

Top 20 European telecom operators

: ETNO Members

Rank

Company

Country

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20

Deutsche Telekom
Telefonica
Vodafone
Orange
Telecom Italia
BT
Telenor
KPN
TeliaSonera
SFR
Swisscom
Everything Everywhere
Belgacom
Turk Telekom
Virgin Media
Bouygues Telecom
Telekom Austria
Tele2
Portugal Telecom
TDC

Germany
Spain
UK
France
Italy
UK
Norway
Netherlands
Sweden
France
Switzerland
UK
Belgium
Turkey
UK
France
Austria
Sweden
Portugal
Denmark

2012 sales (billion )


60132
57061
41436
40981
23407
21537
13336
11568
11011
10199
9317
7634
6318
5231
4852
4664
4184
3453
2911
2090
: ETNO observers

Top 50 telecom operators in the world


Rank
1
2
3
4
5
6
7
8

Company
ATT
Verizon
NTT
China Mobile
Deutsche Telekom
Telefonica
Vodafone
Comcast

Country
USA
USA
Japan
China
Germany
Spain
UK
USA

: ETNO Members
2012 sales (billion )
96976
90798
82583
76608
60132
57061
52373
48700

9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49

America Mvil
Orange
China Telecom
China Unicom
KDDI
Sprint
Softbank
Telecom Italia
BT
Telstra
Vimpelcom
KT
Time Warner Cable
BCE
Telenor
SK Telecom
KPN
TeliaSonera
SingTel
CenturyLink
MTN
Bharti Airtel
SFR
OI
MTS
Swisscom
Rogers
STC
Telus
Telkom Indonesia
LG U+
Etisalat
Hutchison Whampoa
Rostelecom
Everything Everywhere
Ooredoo
Megafon
Belgacom
Liberty Global
Chunghwa Telecom
Turk Telekom

Mexico
France
China
China
Japan
USA
Japan
Italy
UK
Australia
Russia
South Korea
USA
Canada
Norway
South Korea
Netherlands
Sweden
Singapore
USA
South Africa
India
France
Brazil
Russia
Switzerland
Canada
Saudi Arabia
Canada
Indonesia
South Korea
UAE
Hong Kong
Russia
UK
Qatar
Russia
Belgium
USA
Taiwan
Turkey

46359
40981
39094
29002
28264
26733
26073
23407
21537
18672
16983
16667
16661
14921
13336
11621
11568
11011
10945
10772
10648
10323
10199
9929
9393
9317
9293
9156
8341
8297
8015
7975
7862
7687
7634
6987
6434
6318
5811
5601
5231

Source: IDATE
30

31

ETNO Members
Albania

Austria

Croatia

France

Belgium

Cyprus

France

Ireland

Czech Republic

Germany

Italy

Luxembourg

Romania

Denmark

Greece

Hungary

Latvia

Macedonia

Malta

Romania

Sweden

Bosnia and Herzegovina

Liechtenstein

Norway

Slovakia

Switzerland

Poland

Bulgaria

Finland

Iceland

Lithuania

Portugal

Slovenia

Spain

The Netherlands

Turkey

Prepared by ETNO and IDATE, December 2014

ETNO observers
China

Finland

Saudi Arabia

France

European Telecommunications Network Operators Association (ETNO)


www.etno.eu
IDATE: www.idate.org

Sweden

USA

USA

USA

USA

Graphic design by Aupluriel : www.aupluriel.be


32

European Telecommunications Network Operators Association


info@etno.eu I Tel: +32 (0)2 219 3242
www.etno.eu

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