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MARKET ANALYSIS
Bohemian rhapsody
Competition is intense in the Czech Republic as the country’s three mobile
network operators fight against the spectre of falling voice ARPU.
�hree network operators—
T-Mobile, TelefonicaO2 and
Vodafone—are currently competing
in a market that, according
to Informa Telecoms & Media, has
a mobile penetration rate of 121.38
per cent. Making it the second highest
penetration rate in Central and
Eastern Europe, behind Lithuania at
131.78 per cent.
The market has apparently reached
saturation, due to the high level of multiple
SIM ownership. But in the year to
end-Q406 it registered a healthy 7.51
per cent increase in subscriptions to
reach 12.4 million, compared to 11.5
million at end-2005.
T-Mobile was the market leader at
the beginning of this year, with over
five million subscriptions, compared
to 4.6 million the previous year. The
carrier had a 40.65 per cent market
share at Q406, up from 40.11 per
cent at Q405, according to Informa
Telecoms & Media.
The operator recorded very strong
growth in Q406, taking 51.71 per cent
of Czech Republic’s total net additions
with 226,000, its highest level of net
additions since Q404. Of these only
17,000 were prepaid.
T-Mobile reported an ARPU increase
of �18 ($24), up slightly from �16 ($21)
in 2005 as it migrated its prepaid customers
to more lucrative postpaid contracts.
At Q406, T-Mobile recorded total
revenues of $363.66m, up from $301.03m
in Q405 and Ebitda was $143.14m, up
from $104.71m in Q405.
At the beginning of this year,
TelefonicaO2 was second with 4.95
million subscriptions, compared
to 4.77 million a year earlier. This
equats to a 39.92 per cent market
share, down from 40.47 per cent in
the previous quarter. The operator
added 109,000 new subscriptions in
Q406, compared to a loss of 36,000
subscriptions in Q306. TelefonicaO2
recorded an ARPU increase of �19.20
($25.7) during Q406, up from �17.63
($23.6) in Q405.
In January 2006, Vodafone rebranded
Oskar to Vodafone Czech
Republic. Oskar had traditionally
offered the lowest tariffs in the Czech
market, but has significantly upped
its focus on the corporate sector in
recent years. This is reflected in it
having the highest proportion of
postpaid subscriptions on the Czech
market (52.80 per cent at the end of
2006) and thus the highest ARPU at
�23.9 ($32.1) in Q406, up from �23.5
($31.5) in Q405.
The operator had 2.41 million subscriptions
at end-2006, compared to
2.14 million at Q405, representing a
19.43 per cent market share at Q406,
up from 18.52 per cent a year earlier,
according to Informa Telecoms &
Media. The operator added 102,000
new subscriptions in Q406, compared
to 48,000 in Q306.
Overall, the Czech market grew by
868,000 subscriptions in 2006. In the
final quarter of the year, the market
added 437,000 new subscriptions. It
is inevitable, however, in such a saturated
market that the carriers will find
the hunt for further subscriber growth
gets tougher as we head towards
2008, particularly as the population
of the Czech Republic is decreasing
over time.
Mobile number portability was
introduced in the Czech market in
January 2006, with little impact initially.
According to the operators, as
of end-Q206 about 44,000 subscribers
had ported their number, but the carriers
are refusing to comment on the
exact shares each has lost to or gained
from rival networks.
It is likely that Vodafone’s high
share of net additions in Q106 was due
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