Boston, MA -- (ReleaseWire) -- 12/05/2012 -- BMI View: Austria's all-important mobile market reported slower than expected growth in H112 as the weaker domestic economy weighed on consumer spending and made operators' low-cost 'no frills' services more appealing than ever. The postpaid user base contracted slightly as a result and was buoyed only by the higher value service from 3 Austria. 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. 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.
- Revised data from the regulator showed that the broadband market grew less dynamically in 2011 than had previously been reported, though mobile broadband remained the principal driver of growth. Subscriber additions were lower than expected in H112 and our five-year forecasts have been reined-in.
- Blended mobile ARPU generally declined in H112, although 3 Austria reported a slight improvement. 3's ARPU is likely to be hit by the absorption of Orange, while Telekom Austria's acquisition of Yesss! will increase its exposure to the lower end of the market, also weighing on ARPUs. We have revised downwards our overall ARPU forecast.
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Key Trends & Developments
Telekom Austria and T-Mobile continue to increase capacity on their core radio and optical cable transmission networks in order to keep pace with growing volumes of mobile data traffic. Close to 50% of mobile service revenue on the A1 network comes from non-voice services, while T-Mobile reports that 40% revenue was related to mobile data.
Local and European Commission-level scrutiny of 3 Austria's proposed acquisition of Orange Austria was ongoing at the time of writing, with reviews focusing on 3's capabilities of serving MVNO partners and the effect on the wider mobile market of Telekom Austria's absorption of Yesss!
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