The Dutch market for fixed broadband internet rose by only 0.1 percent in the second quarter, half of what it grew in the first quarter, according to Telecompaper’s Dutch Broadband 2017 Q2 report. The number of connections went to 7.35 million. Cable grew, but less strongly than in Q1. Demand was the exact opposite for fibre. For full-year 2017, the market research agency expects growth to go over 1 percent year-on-year.
As in the fourth quarter of 2016, growth in the broadband market was boosted by cable and fibre. In Q2, fibre advanced 1.5 percent, against growth in Q1 of 0.9 percent. At cable, the number of connections lifted 0.1 percent, compared with 0.3 percent a quarter earlier.
Copper continues to decline
At DSL (copper), the number of broadband connections continued to decline despite KPN's speed enhancement investments with applications such as pair bonding. Since 2015, the operator has been trying to get more from copper through large-scale upgrades, bringing speeds to 200 Mbps for up to millions of people. KPN and its brands, plus wholesale partners like Tele2 Netherlands, already provide VDSL connections with up to 100 Mbps.
Telecompaper expects growth in the number of broadband internet connections to continue rising over the coming quarters. Over 2017, this will lead to slightly more than 1 percent growth compared with 2016. This is considerably less than the 2.6 percent growth recorded last year against 2015. The slowdown was mainly caused by increasing market saturation in the area of fixed broadband internet, with household penetration at 94 percent.
Cable remains the market leader by far
Looking at broadband technology, cable remains the market leader with 3.38 million connections. DSL is still number two, despite a decline to 2.85 million connections. Fibre meanwhile grew to 1.13 million connections at the end of Q2.
Ziggo is the largest provider
Cable provider Ziggo is still the largest broadband provider in the Netherlands. The company grew by 0.3 percent in the first quarter to almost 3.2 million broadband subscribers, translating into a market share of 43.5 percent. Second on the market was KPN (including Telfort, XS4ALL and Edutel brands), with its market share going 0.3 percent higher 40.5 percent.
In addition to Ziggo and KPN, the market has a number of smaller players., including T-Mobile NL (T-Mobile Home) had the highest quarterly growth in connections, going from 8,000 to 184,000, raising its market share to 2.5 percent. On the other hand, established names like Tele2 NL and Online.nl lost customers and market share. The smaller providers are doing well through the advent of NLE and T-Mobile, according to Telecompaper's report. However, they appear to be winning customers mainly from other smaller parties. This means that market leaders Ziggo and KPN are not just keeping their market share, but are even gaining.
Broadband revenues stabilise in Q2
Revenues from broadband connections went to EUR 474 million in Q2, sequentially unchanged. For the full year, Telecompaper expects a slight revenue growth of 0.4 percent, partly due to price increases at KPN and its brands, and at Ziggo, from 1 July.
For the coming five-year period, from 2017 to 2021, Telecompaper sees an average growth rate of 1.2 percent in the number of broadband connections and an average revenue growth of 0.8 percent per year. The lower revenue growth is also attributed to the advance in the number of multiplay bundles, with total revenue per customer growing, but revenue per service often decreasing somewhat.
