Dutch fixed market revenues grow in 2012

Thursday 21 March 2013 | 11:02 CET | Background

The Dutch fixed network market grew to revenues of EUR 5.05 billion in 2012, according to Telecompaper analysis. The revenue growth amounted to almost 1 percent or EUR 44 million compared to 2011. The figure include revenues generated from retail consumer services for fixed telephony, internet and television. The growth was driven by internet and TV, which compensated for a drop in fixed telephony revenues.

Broadband services generate most revenues

During 2012, broadband continued to account for the largest share of revenues in the fixed market, growing to almost 36 percent of all fixed network revenues, from almost 35 percent in 2011. The broadband revenues include internet access (broadband and narrowband) as well as online services such as back-up and storage, cloud applications and streaming music services. Broadband revenues grew by 4.1 percent to a total EUR 1.81 billion in 2012. 

Fixed telephony revenues, including usage and access over PSTN/ISDN/WLR/CPS lines as well as VoIP via DSL, cable and fibre networks, decreased by 3.5 percent to EUR 1.59 billion in 2012. Telephony's share of the fixed market dropped 1.5 percentage points to 31.4 percent in 2012.

Graph 1: Fixed market revenue shares, by services‚Äč.

The TV market revenues, including digital and analogue TV subscriptions, pay-TV and video on demand, grew by almost 5 percent to EUR 1.47 billion in 2012, good for 29.2 percent of fixed market revenues. The Other category, consisting of revenues from installation fees and equipment such as modems, routers and set-top boxes, saw revenues decrease by almost 16.5 percent to around EUR 180 million. The decrease was due in part to operators offering free set-top boxes or routers as part of triple-play promotions as well as free installations. 

KPN largest provider, market share drops despite FTTH acquisitions

KPN leads the Dutch consumer fixed market in terms of revenues, despite losing 1 percentage point of market share in 2012 to end the year with almost 34 percent. The acquisition of fibre service providers Concepts ICT, Edutel, KickXL, Lijbrandt and XMS was not enough to compensate the decline in revenues from fixed telephony, VoIP and DSL. 

Ziggo saw its market share grow to 28.4 percent with revenues of EUR 1.43 billion, up by 2.9 percent year-on-year. The growth was driven by broadband and more fixed telephony customers and revenues, which compensated the drop in TV customers. 

UPC was number three with 17.4 percent of the Dutch consumer fixed market revenues, 0.5 percentage points more than in 2011. The same as with Ziggo, broadband and fixed telephony growth compensated TV losses at UPC.

Graph 2: Fixed market revenues shares, by largest providers.

Tele2 was the fourth-largest provider with a market share of 6.9 percent, down from 7.4 percent in 2011. During 2012, the provider saw decreases in fixed telephony, VoIP and broadband, both in customers and revenues. These decreases could not be compensated by growth in TV customers and revenues. Tele2 ended the year with revenues of around EUR 346 million.

Challengers gain

The revenue figures show that traditional fixed telephony providers (KPN, Tele2) are losing revenues and customers to the challengers: Ziggo, UPC, other cable companies and non-KPN fibre service providers. On the TV market, the same trend is visible, as the cable operators and satellite TV operator CanalDigitaal lose customers and to a lesser extent revenues to challengers like KPN, Tele2 and other fibre providers. 

In the broadband market, the shift from DSL to cable and fibre continues, offering the cable operators room to up-sell triple-play plans to existing TV customers. At the same time, KPN and to a lesser extent Tele2 can use the growing FTTH coverage to lure existing DSL customers to fibre services.  

OTT impact difficult to estimate

With revenues still growing, the Dutch fixed market does not appear to be suffering significantly yet from the rise of OTT (over-the-top) services. This does not mean OTT services are having no impact, as growth in the fixed market very well could have been higher without the impact of OTT services.

The OTT effect is likely most evident in the fixed telephony market, due to competition from voice services such as Skype and Google Talk. The TV market may also be affected, but to date no major player like Netflix or Lovefilm has emerged on the Dutch market. Still, operators should be aware of OTT voice and video services, as the two sub-markets together are responsible for 60 percent of all fixed market revenues.

The numbers in this article are based on figures reported by fixed network operators and Dutch regulator Opta, enhanced with Telecompaper analysis. The numbers do not include estimates on OTT voice or video services offered by companies such as Skype, Rebtel, VoIPBuster, Pathe Thuis etc.

More information is available in Telecompaper’s quarterly reports on the Dutch broadband, TV and fixed telephony markets.

Telecompaper is organizing the Connected-Nieuwe spelregels congress on 12 June 2013 in the Singer Museum, Laren.

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