BMI’s 2010 report – Germany Telecommunications Report Q1 2011 – The Q111 update on Germany’s telecommunications market provides comprehensive coverage of recent developments in the country’s mobile, fixed voice and broadband sectors. This quarter sees several changes to our five-year growth forecasts for Germany’s broadband and mobile subscriber markets. At the end of September 2010, Germany’s mobile market had about 107.102mn subscribers, reflecting a net loss of 610,000 subscribers in the third quarter of the year. As in the first and second quarters of 2010, market leader T-Mobile was chiefly responsible for the shrinking mobile subscriber base. In Q310, TMobile moved to deduct inactive prepaid customers from its reported total for the third consecutive quarter. By comparison, the three other mobile operators – Vodafone Germany, E-Plus and Telefonica O2 Germany – all reported strong net additions in the quarter. Despite this, all three operators continued to report worsening subscriber mixes, pointing to a vigorous drive at attracting prepaid customers to boost market share.

Going forward, it is likely that strong prepaid customer growth will continue to characterise the German mobile market. One of the phenomena which are responsible for this trend is the high number of mobile virtual network operators (MVNOs) in the sector. In October 2010, the mobile market saw the arrival of two new MVNOs: Turkey’s largest mobile operator Turkcell plans to offer mobile services in partnership with Deutsche Telekom, while German cable operator Kabel BW has partnered with Telefonica O2 for the launch of its MVNO offering. Germany’s network operators include the customers of MVNOs using their network when reporting their own subscriber totals.

In our previous update, we noted that three of Germany’s mobile network operators – Deutsche Telekom, Vodafone and O2 – were awarded new mobile frequencies in the 800MHz spectrum range in May 2010. Since then, all three operators have begun deploying Long Term Evolution (LTE) networks, with a view to extending mobile broadband services to remote parts of Germany. In November 2010, Vodafone announced it had deployed LTE technology in nine locations in four federal states. The operator plans to cover around 1,500 communities via the 4G mobile broadband network by the end of March 2011. In September 2010, Telefonica O2 announced the launch of its first pilot LTE network in Munich.

Meanwhile, Deutsche Telekom is working with Nokia Siemens Networks for the deployment of its LTE network; the incumbent operator planned to launch its network before the end of 2010. Although our internet user forecast for Germany remains broadly unchanged this quarter, we have upwardly revised our estimate for the number of broadband subscribers in the country. The main reason for our higher estimate is the incorporation into our forecasts of new data for the number of mobile broadband subscribers. These are broadband subscribers who use netbooks, smartphones and USB sticks to connect to the internet wirelessly via a high-speed (3G/HSPA) network. We estimate that Germany had 27.38mn broadband subscribers at the end of 2009, equivalent to a penetration rate of 33.4%.

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