Quarterly Telecommunication Markets Observatory (*)

- 1 -

Autorità per le garanzie nelle comunicazioni

Quarterly Telecommunication Markets Observatory (*)

- Updated to 30 September 2014 -

(*) – Data provided by operators and elaborated by Agcom.

- 2 -

Index

Focus – Price in the sector

1. Fixed network: access lines (total)

2. Fixed network: access lines (new entrants)

3. Fixed network: retail broadband access lines

4. Mobile lines: MNO + MVNO

5. Mobile lines: MNO

6. Mobile lines: by customer/contract type (MNO)

7. Mobile lines: MVNO

8. Mobile broadband (MNO+MVNO)

9. Mobile telephony: number portability

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Focus – Telecommunications prices in Europe [1]

26,5

7,7

23,0

24,6

26,8

16,0

21,3

22,4 -

5,0

10,0

15,0

20,0

25,0

30,0Fixed voice

Mobile broadband(**)

Fixed broadband

Mobile voice anddata

Ita EU (*)

Fixed Network – Italy is in line with Europen average price value for traditional fixed voice service, and above the average prices

for broadband services

Mobile network – Italy is above the average prices for bundle offers (data and voice), but lower for only data mobile service

[1] – Data (July 2014) make reference to average prices (with respect to £ (PPP)/mese) of some baskets of services designed to catch different consumers profile. For greater details, looking at Ofcom, “The

Telecommunications market 2014” (Dec. 2014) – pages 83-113 (Chap. “2.Comparative international pricing” and “Appendix B, - Comparative international pricing methotology “, pages. 338-365 -

http://stakeholders.ofcom.org.uk/market-data-research/market-data/communications-market-reports/cmr14/

(*) – Average value of Germany, France , Spain, UK (**) - Values about “dedicated data-only mobile broadband connections”

Source: Agcom evaluation on Ofcom data

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1. Fixed network: access lines (total) (1)

3Q2014

3Q2013

(1) Including Telecom Italia physical access, full unbundling (voice and data), SLU, Dsl Naked, WLR, FWA and fiber lines.

Lin

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Source: Agcom evaluation on data provided by operators

On yearly basis, direct fixed access lines decreased by about 560 thousands (-1.1

millions in the last two year).

In the last two years the customer base of Telecom Italia, has decreased by about 1.5

million lines. Of these, only 400 thousand (25%) has been “recovered” by OLOs.

In the last twelve months, Telecom Italia’s market share further decreased by 1.7%, to

61.3%.

Fastweb confirms his growth trend, reaching a market share about 10% (YoY +0.9%).

The market share of the other main OLOs remain stables only Wind decrease his

market share (-0.3%).

The weight of other operators has grown (+0.8%), mainly due FWA services.

0,00

4,00

8,00

12,00

16,00

20,00

24,00

3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14

14,16 14,00 13,78 13,55 13,37 13,21 13,03 12,83 12,65

7,59 7,75 7,86 7,89 7,84 7,88 7,97 8,05 7,99

Telecom Italia fixed access lines OLO access lines

20,64

21,7521,21

Telecom Italia61,3%

Wind13,2%

Fastweb10,0%

Vodafone9,6%

BT Italia0,4%

Tiscali2,0%

Others3,5%

Telecom Italia

63,0%

Wind13,5%

Fastweb9,1%

Vodafone9,4%

BT Italia0,3%

Tiscali2,0%

Others2,7%

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2. Fixed network: access lines (new entrants)

3Q2014

3Q2013

Lin

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(1) – Including virtual LLU and Subloop ULL.Source: Agcom evaluation on data provided by operators

On a yearly basis the number of accesses lines grew by about 150 thousands (400

thousands compared to September 2012), slight decreasing with respect to the

previous quarter (-60 thousands).

Full LLU lines (1) remain stable, mainly due the growth of SLU services (150

thousand at end of September), while the WLR lines decreased by about 90

thousands.

With respect to access lines indicator, Wind ranks at the first place (34.2%), while it

has experienced a decline on a YoY by 2.3%.

FWA access exceed 500 thousands lines, with principal operators in this

market segment Linkem (41.9%), NGI (28.9%) and Aria (24.5%).(2)

(2) – Including Aria, Linkem, Mandarin and Go Internet (ex WaveMax) and NGI

0,00

1,00

2,00

3,00

4,00

5,00

6,00

7,00

8,00

9,00

3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14

0,83 0,80 0,77 0,74 0,70 0,67 0,66 0,64 0,61

1,06 1,11 1,12 1,11 1,10 1,11 1,13 1,13 1,16

0,28 0,29 0,30 0,29 0,30 0,30 0,31 0,31 0,31

5,18 5,26 5,35 5,38 5,36 5,38 5,42 5,49 5,39

0,24 0,28 0,32 0,36 0,38 0,41 0,45 0,490,52

Wholesale Line Rental Naked dsl Fiber Unbundling (voice, voice + data) (1) FWA

7,597,84 7,99

Wind34,2%

BT Italia1,0%

Fastweb25,8%

Vodafone24,8%

Tiscali5,1%

Others9,1%

Wind36,5%

BT Italia0,9%

Fastweb24,6%

Vodafone25,4%

Tiscali5,3%

Others7,2%

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Telecom Italia49,5%

Wind15,9%

Fastweb13,7%

Tiscali3,7%

Vodafone11,8%

Others5,5%

10,00

10,50

11,00

11,50

12,00

12,50

13,00

13,50

14,00

14,50

3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14

13,14 13,17 13,28 13,29 13,23 13,22 13,23 13,16 13,06

0,54 0,59 0,64 0,67 0,71 0,79 0,91 1,04 1,17

DSL Other technologies

13,6813,94 14,23

3. Fixed network: retail broadband access lines

3Q2014

3Q2013

Lin

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YoY, broadband lines growth of about +290 thousands. Compared with last June, the

customer base increased by about +30 thousands lines.

From the beginning of the year the number of xDSL lines has decreased by about -170

thousand.

The access lines that use other technologies reached about 1.2 million, mainly due

to FWA lines (+104 thousands) and NGA lines (+277 thousands). NGA lines (640

thousands as a whole) represent the 4,5% of the broadband lines (2,3% in

September)

Telecom Italia market share has been reduced on a yearly basis of 0.8%, falling to 48.7%.

Also Wind has lost market share (-0.7%) reaching a value of 15.2%.

Fastweb and Vodafone are the main beneficiaries (+0.5%), and mainly FWA operators

(+0.6%) as smaller companies.

Compared with 3Q13, Wind market share shows a slight decrease (-0.6%)


Telecom Italia

48,7%Wind15,2%

Fastweb14,2%

Tiscali3,4%

Vodafone12,3%

Others6,1%

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4. Mobile lines: MNO + MVNO

3Q2014

3Q2013

Lin

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Compared to previous quarter, the customer base decreased by about 1.2 million

lines.

The reduction reaches -2.7 millions on yearly basis, value obtained through

a reduction of 4.4 millions for the MNO and a growth of 1.7 for MVNO.

A pronounced decrease of Vodafone market share (-2.1%) is recorded, from this

reduction takes advantage mainly the MVNO (+2.9%); H3G increases his market

share (+0.5%) taking advantage from Telecom Italia (-0.4%).

At the end there has been a reduction of market concentration.

75,00

80,00

85,00

90,00

95,00

100,00

3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14

96,92 97,18 97,20 97,56 97,34 96,85 96,32 95,84 94,65

Telecom Italia32,1%

Vodafone

27,5%

Wind

23,0%

H3G10,3%

Poste Mobile3,3%

Mvno Others3,7%

Telecom Italia32,5%

Vodafone29,6%

Wind

23,0%

H3G9,8%

Poste Mobile2,8%

Mvno Others2,3%

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Telecom Italia

34,5%

Vodafone29,6%

Wind24,8%

H3G11,1%

3Q2014

3Q2013

Lin

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5. Mobile lines: MNO


From the beginning of the year the customer base has declined more than 3.7 million.

YoY the “only voice” sim decreased about 11.1 million (-16.3 million with respect to September

2012).

In the same time, the number of prepaid lines decreased by 3.8 millions, but, although to a

lesser extent, also the number of postpaid lines decreased (-600 thousands).

YoY, voice traffic (more than 118 billion minutes) increased by 5.8%.

In the same time the SMS traffic continues to decline (with 36 billion SMS sent, the reduction

is about 41% on an yearly basis).

75,00

80,00

85,00

90,00

95,00

3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14

92,56 92,72 92,54 92,68 92,34 91,66 90,6089,28

87,97

Telecom Italia

34,2%

Vodafone31,2%

Wind24,3%

H3G10,4%

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0,0020,0040,0060,0080,00

3Q123Q13

3Q14

11,7212,37

13,38

80,85 79,9774,59

Business lines Residential lines

6. Mobile lines: by customer/contract type (MNO)

Residential

Lin

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Business

Prepaid Postpaid

Market share by contracts – 3Q2014 (%)

Market share by customers – 3Q2014 (%)Customer type Contract type

Contract type (1)

The 79.3% of active lines are "prepaid“ (79.6% compared to September 2013).

In two years, the postpaid lines increased, in absolute terms, by about 870 thousands,

while the prepaid decreased, by more than 5.5 millions.

In the “prepaid” market, with respect to September 2013, Telecom Italia (-0.2%) and

Vodafone (-1.5%) decrease their market shares, while Wind reached 29% growing by

some 0.8% YoY.

Telecom Italia leads the "postpaid" segment with 42.4% of market share


(the corresponding values for September 2013 are shown in brackets)

(1) - As a result of reclassifications and updates of corporate databases operated by Wind, the data are not entirely consistent with previous Observatory’s review

Customer type (1)

Business customers (13.4 millions of SIM in September) increased on a yearly basis by

about 1 million lines, while the residential segment (74.6 millions of SIM) experienced a

decrease by about 5.4 millions.

The business segment’s market share increased by 1.8% (from 13.4% to 15.2% of the

total customer base).

The first operator in the residential segment is Vodafone (30.0%), followed by

Telecom Italia (29.8%) and Wind (28.1%).

0,0020,0040,0060,0080,00

3Q123Q13

3Q14

17,35 18,8018,21

75,21 73,54 69,76

Postpaid lines Prepaid lines

TI42,4%

Voda28,8%

Wind11,6%

H3G17,3%

TI31,5%

Voda30,4%

Wind29,0%

H3G9,1%

(31,7)

(31,9)

(28,2) (8,2)

(40,4)

(17,4)

(30,3)

(11,9)

TI54,5%

Voda30,1%

Wind10,5%

H3G4,9%

TI29,8%

Voda30,0%

Wind28,1%

H3G12,1%

(29,6)

(31,7)

(11,0)

(5,7)(6,8)

(30,6) (57,0)

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7. Mobile lines: MVNO

3Q2014

3Q2013 The MVNO subscribers continue to grow, reaching 6.7 million and on an yearly

basis of 1.68 million, half of which can be attributable to Lycamobile that started

the activity at the beginning of the year. This one, with 12.5% of market share is

the second operator.

Poste Mobile, with 47.8% of market share, lost 7.2% with respect to September

2013, but recover with respect to June (+ 0.4%).

On an annual basis the MVNO traffic (*) grows by over 40% while the text

messages sent are reduced by about 15%.


Lin

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(*) - During 2013 it was not in the market Lycamobile.

0,0

1,0

2,0

3,0

4,0

5,0

6,0

7,0

3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14

4,36 4,46 4,66 4,88 5,00 5,195,72

6,56 6,68

Poste Mobile

47,8%

Fastweb12,4%

Coop Italia8,1%

Erg Mobile5,6%

Lycamobile12,5%

Others13,6%

Poste Mobile

55,0%

Fastweb16,2%

Coop Italia8,5%

Erg Mobile6,8%

Lycamobile0,0%

Others13,5%

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0

2.000

4.000

6.000

8.000

10.000

3Q13 3Q14

6.910 6.575

-4,8%

8. Mobile broadband (MNO+MVNO)

Sim data traffic (*1000) Connect card (*1000)

Data traffic from the b.y. (terabyte)

In 3Q2014, SIMs that made broadband data traffic reached

about 42 millions (+18% YoY) and in the last two years

increased from to 29% to 44% of total customer base.

The dedicated connect card declined by 4.8%, while in the mean

time strong growth for which is foresees a dedicated “data

subscription”.

YoY, data traffic has grown by 45.5%, more than

correspondingly observed last year (+33.7%).


0

5.000

10.000

15.000

20.000

25.000

30.000

35.000

40.000

45.000

3Q13 3Q14

35.57941.966

+18,0%

100.000

150.000

200.000

250.000

300.000

350.000

400.000

3Q13 3Q14

247.791

360.556

+45,5%

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0,0

10,0

20,0

30,0

40,0

50,0

60,0

70,0

80,0

3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14

46,2 49,9 53,558,7 63,0 66,1 69,0 71,5 74,2

0,0

10,0

20,0

30,0

3Q13 3Q14

29,919,1

H3G16,3%

TI22,6%

Voda29,9%

Wind23,1%

Mvno8,0%

9. Mobile telephony - number portability

3Q14 - Lines as donor (in the quarter)

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At the end of September 2014, the number of ported lines exceeds, for all operators

74 millions.

YoY MVNO were able to adds more than 1.8 million lines cumulatively, slightly

increased with respect to June.

YoY, a positive trend is present for H3G (+788 thousands) and MVNO (+328

thousands), for MVNO (+328 thousands), instead a negative trend is measured for

Vodafone (-538 thousands), Telecom Italia (-377 thousands) and Wind (-201

thousands).

From the beginning of the year, the total number of procedures MNP declined by 38%

compared to the corresponding value of 2013.

YoY, the “mobility index” shows a slowdown (from 29.9% to 19.1%).

3Q14 - Lines as recipient (in the quarter)


Mobility index (%) (*)

(*) – Ratio total lines donated / acquired during 1H2014 and the average overall customer base (excluding m2m)

H3G20,9%

TI19,6%

Voda24,9%

Wind23,7% Mvno

10,9%

Quarterly Telecommunication Markets Observatory (*)

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Transcript of Quarterly Telecommunication Markets Observatory (*)