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Iceland - Telecoms, IP Networks, Digital Media and Forecasts

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Iceland - Telecoms, IP Networks, Digital Media and Forecasts

Continuing economic turmoil effecting telecom sector revenue

BuddeComm's annual publication, Iceland - Telecoms, IP Networks and Digital Media and Forecasts, provides a comprehensive overview of the trends and developments in the telecoms market in Iceland. It incorporates the regulator's market data to mid-2012, operator data updates and market developments into 2013. The report provides an overview of the telecoms market including the mobile voice and data, broadband and digital media sectors.

With one of Europe's smallest economies and markets, there is little room for growth within Iceland's telecom sector. The market continues to suffer from the effects of the ongoing economic downturn, a situation which is likely to persist for the next two to three years at least. Iceland recorded Europe's first and worst economic collapse during the downturn in 2008, though telecom revenue proved more resilient than many other sectors mainly due to the nature of its being an indispensable utility. Investment crashed by about 50% in 2009 as a result of liquidity difficulties, though it has since recovered and further growth, though slight, is anticipated in 2013 as the incumbent operator continues to upgrade its fixed-line network with FttH.

The government's economic forecast for 2011-2016 predicted that the economy would grow 3.1% in 2012, driven by increased investments and consumption. Unemployment will remain high but fall steadily with economic growth.

The incumbent, Síminn, remains in a precarious position with creditors as a result of it having hedged against the falling króna and the failure of banks to honour their currency swap agreements. The company saw a 18% fall in revenue in 2011, obliging it to adopt efficiency measures and streamline its operations. Most other operators have also suffered as consumers reign in their discretionary spend. As a result, operators are unlikely to see revenue growth in the short term. Services on which they had hoped to realise significant returns, such as high-end mobile data applications, are expected to generate only moderate income during the next few years.

There is effective competition in all market sectors, with a small number of new players having emerged to challenge the dominance of the two leading players Síminn and Vodafone Iceland. The new entrants Nova and Tal have expanded their launched fixed-line services, complementing their existing presence in the mobile phone market.

Iceland Key telecom parameters 2010; 2012
Penetration by sector: | 2010 | 2012 (e)
Fixed broadband | 37% | 39%
Mobile | 117% | 124%
(Source: BuddeComm based on industry data)

Market highlights:

Broadband adoption in Iceland remains among the highest in the world. FttH networks have been stimulated by government policies to deepen the fibre footprint in the capital and major outlying towns. Fibre is laid as standard in new-build zones and redevelopments, providing an important stimulus for high-end IP-delivered services.

The government ITC policy to 2012 is geared at enabling public services including health, education, government procurement, telecommuting and teleconferencing to be available online via a coordinated network, so stimulating further broadband uptake.

The mobile sector remains dominated by Síminn and Vodafone Iceland, with the two smaller players having secured only 6% of the voice market. Nevertheless, they have capitalised on their ability to offer 3G services in the 900MHz spectrum band, accounting for 55% of mobile data traffic in 2010.

Síminn was fined ISK400 million for abusing its market dominance, restricting the ability of new entrants to gain a foothold.

Skipta plans to invest almost ISK3 billion by the end of 2013 to complete its Ljósnet FttH network, providing 89,000 households with access to up to 100Mb/s services.

The broadband market continues to move towards fibre from DSL, a trend expected to develop more rapidly during 2013 as operators try to exploit services made available on the faster networks.

Farice's 2013 deal with Ciena Corporation will see the DANICE submarine cable system connecting Iceland with Denmark upgraded to 100Gb/s. The bandwidth will help support Iceland's developing data centre industry.

Following the spectrum auction in early 2013 Nova became the first MNO to launch commercial LTE services. Strong competition is expected by the end of the year.

The Emerald express cable connecting the US to Ireland will boost Iceland's capacity to 10Tb/s in both directions.

Data in this report is the latest available at the time of preparation and may not be for the current year.

This report provides a comprehensive overview of trends and developments in Iceland's telecommunications market. The report analyses the mobile, internet, broadband, digital TV and converging media sectors.

Subjects include:

Market and industry analyses, trends and developments;
Facts, figures and statistics;
Industry and regulatory issues;
Major players, revenues, subscribers, ARPU, MoU;
Internet, VoIP, IPTV;
Mobile voice and data markets;
Broadband (FttH, DSL, cable TV, wireless);
Convergence and digital media;
3G subscriber and mobile ARPU forecasts to 2015;
Broadband market forecasts for selective years to 2020.

Key developments:

Mobile 3G use reaches half of all subscribers; projected mobile data use grows steadily; mobile revenue continues to slide though recovery expected in 2012; telecom investment slowly recovers from 2009 crash; Síminn revenue falls 18% in 2011; DSL subscriber base continues to fall; Síminn fined ISK400 million for abuse of market dominance; regulator market data to June 2012; operator data updates; market developments to mid-2013.

Companies covered in this report include:

Vodafone, Síminn, Nova, Tal.This report is essential reading for those needing high level strategic information and objective analysis on the telecom sector in Iceland.

It provides further information on:

Market liberalisation and regulatory issues;
The impact of the global economic crisis;
Telecoms operators privatisation, acquisitions, new licences;
Mobile data market developments in coming years in light of spectrum auctions and new license awards;
3G developments, regulatory issues and technologies including HSPA and LTE;
Broadband migration to an FttH architecture;
Historical and current subscriber statistics and forecasts;
ARPU statistics and forecasts.

1. Executive summary
2. Key statistics
3. Telecommunications market
3.1 Overview of Iceland's telecom market
3.2 The Telecommunications Fund
3.3 Economic crisis 2008 - 2012
4. Regulatory environment
4.1 History
4.2 Regulatory authority
4.2.1 Post and Telecommunications Administration (PTA)
4.3 Telecom sector liberalisation in Iceland
4.3.1 Privatisation
4.3.2 Interconnect
4.3.3 Access
4.3.4 Number portability (NP)
4.3.5 Carrier preselection (CPS)
5. Fixed network operators in Iceland
5.1 Overview of operators
5.2 Síminn
5.3 Vodafone Iceland
6. Telecommunications infrastructure
6.1 National telecom network
6.2 International infrastructure
7. Broadband market
7.1 Overview
7.2 Government policies
7.3 Broadband statistics
7.4 Asymmetrical Digital Subscriber Line (ADSL)
7.5 Fibre-to-the-Home (FttH) networks
7.6 Broadband Powerline (BPL)
7.7 Satellite
7.8 Mobile broadband
7.9 Wireless broadband
7.9.1 Local Multipoint Distribution Services (LMDS)
7.9.2 WiFi/WiMAX
8. Digital media
8.1 Overview of digital media
8.2 TV-over-DSL (IPTV)
8.3 Video-on-Demand (VoD)
8.4 VoIP
9. Mobile communications
9.1 Overview of Iceland's mobile market
9.1.1 Mobile statistics
9.2 Regulatory issues
9.2.1 Roaming
9.3 Mobile technologies
9.3.1 Analogue networks
9.3.2 Digital networks
9.3.3 Amendments 2008
9.3.4 Third Generation (3G) mobile
9.4 Major mobile operators
9.4.1 Operator market shares
9.5 Mobile voice services
9.5.1 Prepaid
9.6 Mobile messaging
9.6.1 Short Messaging Service (SMS)
9.6.2 Multimedia Messaging Service (MMS)
9.7 Mobile data services
9.7.1 General Packet Radio Service (GPRS)
9.7.2 BlackBerry
9.7.3 High-Speed Downlink Access (HSPA)
9.7.4 Long-term Evolution (LTE)
9.8 Mobile TV
10. Forecasts
10.1 Forecasts broadband subscribers to 2020
10.1.1 Scenario 1 higher broadband subscriber growth
10.1.2 Scenario 2 lower broadband subscriber growth
10.1.3 Notes on scenario forecasts
11. Related reports
Table 1 Country statistics Iceland 2012 (e)
Table 2 Telecom revenue and investment statistics 2012 (e)
Table 3 Telephone network statistics 2012 (e)
Table 4 Internet user statistics 2012 (e)
Table 5 Broadband statistics 2012 (e)
Table 6 Mobile statistics 2012 (e)
Table 7 National telecommunications authority
Table 8 Telecom market revenue by sector 2004 - 2012
Table 9 Telecom market investment by sector 2004 - 2012
Table 10 Proportion of telecom market investment by sector 2008 - 2012
Table 11 Fixed-line (PSTN) subscribers by operator 2006 - 2012
Table 12 Fixed-line subscriber market share by operator 2006 - 2012
Table 13 Fixed-line traffic (PSTN/ISDN) 2000 - 2012
Table 14 Fixed-line revenue 2007 - 2012
Table 15 Skipti financial data 2006 - 2011
Table 16 Fixed-line access channels: PSTN and ISDN 1995; 1997; 1999 - 2013
Table 17 Dial-up internet calls 2007 - 2012
Table 18 Internet and data revenue 2007 - 2013
Table 19 Internet users and penetration rate 1996 - 2013
Table 20 Total broadband subscribers and penetration rate 2001 - 2013
Table 21 Broadband penetration by access type 2004 - 2012
Table 22 Broadband subscribers by operator 2008 - 2012
Table 23 DSL subscribers by operator 2004 - 2012
Table 24 DSL and fibre subscriber growth 2001 - 2013
Table 25 Proportion of DSL connections by speed 2007 - 2011
Table 26 Fibre subscribers by operator 2005 - 2012
Table 27 Satellite broadband subscribers 2005 - 2012
Table 28 Mobile broadband subscribers by operator (voice and data) 2009 - 2012
Table 29 Wireless broadband subscribers 2004 - 2012
Table 30 VoIP subscribers 2006 - 2013
Table 31 IP phone subscribers 2007 - 2013
Table 32 Mobile subscribers and penetration rate 1997; 1999 2013
Table 33 Mobile subscribers: analogue and GSM 1995; 1997; 1999 - 2012
Table 34 Mobile voice subscribers by operator (regulator data) 2005 - 2012
Table 35 Mobile services revenue 2007 - 2013
Table 37 Active GSM and UMTS cards 2006 - 2012
Table 38 Proportion of active GMS and UMTS cards 2008 - 2012
Table 39 Mobile market share of voice subscribers by operator 2006 - 2012
Table 40 Mobile voice traffic 2000 - 2012
Table 41 Prepaid and contract market subscribers 2000 - 2012
Table 42 Prepaid subscribers by operator 2006 - 2012
Table 43 Total SMS traffic by operator 2000 - 2012
Table 44 Total MMS traffic by operator 2007 - 2012
Table 45 Mobile data traffic by operator 2008 - 2012
Table 46 Mobile data traffic by type 2008 - 2012
Table 47 Mobile data-only subscribers 2009 - 2013
Table 48 Forecast broadband subscribers higher market growth scenario 2007 - 2012; 2020
Table 49 Forecast broadband subscribers lower market growth scenario 2007 - 2012; 2020
Chart 1 Telecom market revenue by sector 2004 2012
Chart 2 Telecom market investment by sector 2004 2012
Chart 3 Proportion of telecom market investment by sector 2008 2012
Chart 4 Fixed-line subscribers by operator 2006 2012
Chart 5 Fixed-line traffic (PSTN/ISDN) 2000 2012
Chart 6 Fixed-line revenue 2007 2012
Chart 7 Skipti financial data 2006 2011
Chart 8 Total broadband subscribers by type 2003 2013
Chart 9 Broadband subscribers by operator 2008 2012
Chart 10 DSL subscribers by operator 2004 2012
Chart 11 Active GMS and UMTS cards 2006 2012
Chart 12 Proportion of active GMS and UMTS cards 2008 2012
Chart 13 Mobile market share of voice subscribers by operator 2006 2012
Chart 14 Mobile data traffic by operator 2008 2012
Chart 15 Mobile data traffic by type 2008 2012
Exhibit 1 Overview of digital media

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