Sweden Telecommunications Report Q1 2014 - New Market Study Published

New Fixed Networks research report from Business Monitor International is now available from Fast Market Research

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Boston, MA -- (ReleaseWire) -- 03/17/2014 --Sweden's status as one of the most advanced markets in the world is evidenced by its leading position in M2M connections and the growth of LTE over the past year. Data from PTS show that LTE subscription growth is coming at the expense of 3G, as users are increasingly looking to migrate up to the higher capacity and faster speed technology. As a more expensive service this bodes well for data usage ARPU and the expansion of value-added services (VAS). In the wireline sector this is matched by a 15.7% rise in the number of fibre connections in the year to June 2013. The acquisition of Tele2's fixed broadband assets by Telenor should give the latter increased scope in the Swedish market, although the ongoing decline of the fixed telelphony sector continues to weigh on operators.

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Key Data

- The latest operator data for Q313 show that the market reached 14.535mn users for a penetration rate of 151.9%.
- LTE subscription growth accelerated in H212 and H113, coinciding with the arrival of a wider range of LTE-enabled handsets reaching 811,000.
- Growth in fixed broadband subscriptions is heavily weighted to higher speed technologies such as fibre, with subscriptions up 15.7% y-o-y to 1.103mn at the end of H113. Meanwhile DSL and cable subscriptions declined over the course of 2012.
- Total M2M connections rose to 4.545mn in H113, up from 3.394 y-o-y. Rise in revenues and traffic bode well for this segment.

Key Developments

Telenor Sweden has agreed to acquire the consumer broadband business of rival Tele2 for a cash consideration of SEK775mn (US$121.4mn). The deal sees Telenor acquire a hybrid fibre and copper cable network passing 370,000 households in key metropolitan markets and a customer base comprising 220,000 pay-TV (including 75,000 digital TV) customers and 125,000 fixed broadband customers. A large number of voice telephony customers are also served by the network. Interestingly, Tele2 will retain its business customer base and those network elements directly serving key business customers, suggesting that although the operation is profitable overall, it is seeing better margins from enterprise services than in the consumer market. The deal will significantly bolster Telenor's existing fixed-line business in Sweden which, although being the largest alternative provider on the market, has been losing market share to competitors. However, BMI believes that unless Telenor makes a greater effort to leverage potential synergies between its Swedish fixed and mobile broadband businesses, the acquisition will prove to be little more than a short-term solution to a more pressing problem.

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