Boston, MA -- (ReleaseWire) -- 04/02/2014 -- Our forecasts for Italy's wireline, broadband and mobile services markets have been extended through to 2018 in this quarter's update of the Italy Telecommunications report. Although we have secured new fixed-line and broadband market data from the regulator - which show an acceleration in fixed-line losses, amongst other things - no new data were forthcoming from the majority of the mobile operators.
However, preliminary data from Vodafone suggest a resurgence in subscription additions and we have amended our forecasts accordingly. That said, a softening in the MVNO market and expectations that 3 Italia will absorb rival WIND indicate that there is little organic growth to be obtained in the mobile market. Rather, operators must focus more on premium non-voice services for revenue growth and to justify investments in next-generation access infrastructure.
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- Mobile average revenue per user continues to decline as a result of falling voice usage, the introduction of cheaper tariffs (with free calling and messaging offered as an incentive) and cuts to termination rates all conspiring to erode revenue.
- Uptake of 3G subscriptions remains robust even in a difficult economic climate as consumer demand for smartphones drove growth.
- The dedicated mobile broadband market continues to expand rapidly, with connections increasing by 21.9% y-o-y in Q313. Accordingly, we forecast continued growth in total broadband subscriptions for the duration of our forecast to 2018, but growth will be limited by saturation in the fixed-line broadband segment.
- The MVNO market maintained an uptrend in 2013, with a 19.1% y-o-y increase in subscriptions in Q313 and the proportion of MVNO subscriptions to total mobile subscriptions rising to 5.7% at the end of same period. However, the close of Bip Mobile in January 2014, weaker MVNO additions in Q313 and the movement of larger MVNOs to different host networks suggests that this market is under considerable pressure.
Key Trends And Developments
While the Italian government maintains its stance that it will only allow increased foreign investment in Telecom Italia if it is absolutely necessary and makes business sense, investors are now looking to Vodafone and 3 Italia to kick-start the long-awaited consolidation process in Italy's mature and saturated telecoms market. Vodafone is thought to be considering buying Swisscom-owned broadband operator Fastweb in order to pursue its converged services ambitions. However, it will likely wait on the conclusion of its withdrawal from Verizion Wireless in the US; that move will give Vodafone full control of its Italian unit as well as the cash needed to reinvest in its lacklustre operations.
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