The Dutch market for fixed broadband internet experienced minimal growth in the third quarter. The number of connections rose 0.3 percent year-on-year to 7.366 million, according to the latest market study from Telecompaper, which said this was no small feat on such a saturated market and after growth of just 0.1 percent in the second quarter. The number of cable and fibre-optic connections increased enough to compensate for the continuing decline at DSL. Telecompaper is forecasting 1 percent growth for the full year, with KPN approaching Ziggo in terms of market share.
As in the previous three quarters, growth in the broadband market was driven by cable and fibre, according to the Dutch Broadband 2017 Q3 report. Growth for fibre was lower in Q3 than in previous quarters, with 8,000 new broadband customers, but cable advanced to 17,000 connections. This is much more than in Q2 (+2,000) and Q1 (+9,000). The number of broadband via DSL (copper) connections continued to decline, but the small decrease of 1,000 in Q3 was much lower than in the preceding quarters.
Market saturation slows buoyancy
Telecompaper expects that the increase in the number of broadband internet connections in the fourth quarter will be sufficient to achieve growth of 1 percent in 2017, compared to 2016. That is considerably less than the 2.6 percent rise in the number of connections last year, as against 2015. The main cause of the slowdown was, as can be expected, the market saturation in the field of fixed broadband internet, with a penetration in households now at 94.1 percent.
Growth will now come from adjusting to new technology (such as Docsis 3.1 for cable in 2018) to achieve higher speeds for cable or copper. For example, cable provider Ziggo expects to be able to deliver gigabyte speeds from 2018 onwards.
Cable remains the market leader by far
Looking at broadband technology, cable remains the market leader with 3.39 million connections. DSL is still number two, despite a decrease to 2.85 million connections. Fibre broadband grew slightly to 1.13 million connections at the end of Q3.
KPN gains market share through Solcon acquisition
KPN's market share grew by 0.7 percentage points in Q3 to 41.2 percent. This is the same level that KPN had in early 2011, before Ziggo merged with UPC and started the advance to number 1. The cable provider maintained the top position in Q3 with a 43.6 percent share. The growth of KPN's market share was not organic but mainly due to the acquisition of independent ISP Solcon in July.
Aside from Ziggo and KPN, the market also has a number of smaller players. Of these, T-Mobile Netherlands (T-Mobile Thuis, acquired from Vodafone) showed the highest quarterly growth of 4,000, to reach 188,000. That was good for a market share of 2.5 percent. On the other hand, established names such as Tele2 Netherlands and Online.nl lost customers and market share. Parties such as NLe (established since the end of 2016) and Youfone (recently) have also become active in the broadband market.
Broadband sales grow after price increases
Revenues from broadband connections amounted to EUR 488 million in the third quarter, 2.9 percent more than in the second. Growth came mainly from the price increases that KPN and Ziggo implemented on 1 July for triple play and broadband services. For the entire year, Telecompaper expects revenue growth of 2.4 percent.
For 2017-2021, Telecompaper expects an average growth per year of 1.1 percent in the number of broadband connections and an average annual revenue growth of 1.1 percent.
