C O N T E N T
5. Mobile cellular networks and services ...... 45 5.1. Market players and competition ...... 45 5.2. Infrastructure of the mobile cellular networks...... 45 5.3. Development of the mobile telephone services market...... 45 5.4. Sevices...... 49 5.5. Quality of service ...... 51 5.6. Prices and pricing policy ...... 52
5. Mobile cellular networks and services
5.1. Market players and competition At the end of 2006 on the mobile cellular networks and services market three operators keep on carrying out activities under GSM and UMTS standards: MOBITEL EAD under the brand name of M-TEL, COSMO BULGARIA MOBILE EAD under the brand name of GLOBUL and BTC MOBILE EOOD under the brand name of VIVATEL, as well as one operator of analogue mobile network based on NMT standard - RADIOTELECOMMUNICATIONS COMPANY EOOD with the brand name of MOBIKOM. The emergence of the third GSM operator, BTC MOBILE EOOD under the brand name of VIVATEL, introduced serious dynamics in the market, especially in the pre-paid services segment. The ranking was kept, but redistribution of the subscribers has started, mainly at the expense of the leading operator M-TEL. Second operator was licensed at the end of the year for carrying out telecommunications through public telecommunications mobile network under TETRA1 standard with national coverage. The expected commercial launch of TETRA services, expecting to compete the ones of the active mobile operators in the segment of big corporate clients, state institutions and security services, did not take place.
5.2. Infrastructure of the mobile cellular networks In table 4 are indicated the basic parameters of infrastructure development of the mobile cellular networks as of 31.12.2006.
Table 4
operator M-TEL GLOBUL VIVATEL
GSM UMTS GSM UMTS GSM UMTS indicator coverage by 98,34% 4,25% 96,80% 7,50% 77,00% - territory coverage by 99,82% 29,33% 97,73% 32,10% 94,28% - population Source: Data submitted to CRC The three digital operators invested in building and putting into operation of 3G networks under UMTS standard. At the end of the year the UMTS networks of M-TEL and GLOBUL cover Sofia as well as the big cities and resorts. At the same time, as of end-2006 the GSM network of the third operator reached coverage by population commensurable to those of the rest of the operators (over 90%).
5.3. Development of the mobile telephone services market Dynamics and market development The mobile networks and services market segment kept its intensive development under the condition of intensive competition and market saturation. In 2006 the total revenues from provision of mobile services have increased by 19% for one-year term and amount to 1,8 bn BGN (60% of the total volume of the Bulgarian telecommunication market). The number of subscribers of mobile services has grown by 32% compared to the end of 2005 and reached 8 253 4162 at the end of the year. The annual growth rate for the mobile services subscribers is stable, due on one hand to the growing number of end-users replacing the fixed voice telephone services with mobile telephony3, and, on the other hand to the great number of aggressive promotions held during the year with the purpose to attract new customers, especially in the pre-paid segment.
1 By CRC Decision of April 2007 the individual licenses for carrying out telecommunications through public telecommunications mobile network under the TETRA standard of the two operators were revoked. 2 Including number of active post-paid and pre-paid subscribers (at 12 months term of validity) 3 According to the results from “Research and analysis of consumer demand for telecommunications services in Bulgaria” 2006, survey of the Economic faculty of Sofia University made to order by CRC, 41% of the respondents have declared that they would stop using fixed telephone, because the mobile handset is more convenient.
1 12th Report on the Implementation of the Telecommunications Regulatory Package, 2006 45 Subscribers and penetration of mobile services in Bulgaria
9 000 000 107% 120% 8 000 000
s 100% 7 000 000 81% 6 000 000 80% n 61% 5 000 000 60% 4 000 000 45%
3 000 000 33% 40% penetratio 19% 2 000 000 number of subscriber 9% 20% 1 000 000 0 0% 2000 г. 2001 г. 2002 г. 2003 г. 2004 г. 2005 г. 2006 г.
number of subscribers penetration
Source: Data submitted to CRC Figure 48 The mobile penetration has increased by 26 points for one-year term. For the first time the number of mobile operator’s subscribers reported by the mobile operators exceeds the total number of inhabitants at the end of 2006, i.e. the number of subscribers with more than one SIM card increases. In regarding to the mobile penetration indicator, Bulgaria has left behind a lot of EU member states and South East Europe countries (Figure 49 and 50). Mobile penetration in the EU countries and Bulgaria 180% 160% 140% 120% 103% 100% 80% 60% 40% 20% 0% Italy Malta Spain Latvia Ireland France Poland Cyprus Austria Finland Greece Estonia Sweden Bulgaria Belgium Hungary Portugal Slovenia Slovakia Denmark Lithuania Germany Netherlands Luxembourg October 2005 October 2004 EU average Czech Republic United Kingdom * data for Bulgaria as of 31.12.2005 and 31.12.2006 Source: 12th Report on the Implementation of the Electronic Communications Regulatory Framework, data submitted to CRC Figure 49
1 12th Report on the Implementation of the Telecommunications Regulatory Package, 2006 46 Fixed and mobile penetration in the SEE countries
120 99 100 91 91 88 80 82 80 73 74 65 65 62 62 61 60 52 53 48 42 44 37 34 40 32 29 25 27 26 20 16 16 20 9 5 0 Serbia Turkey Croatia Kosovo Albania Bulgaria Romania Macedonia Montenegro Bosnia and Herzegovina
mobile penetration 01.01.2006 г. mobile penetration 01.07.2006 г. fixed penetration 01.07.2006 г.
Source: 3rd Country Comparative Report - Supply of services in monitoring of South East Europe - telecommunications services sector and related aspects, 2007, data submitted to CRC Figure 50 Yet it should be noted that the mobile penetration indicator is influenced by the manner of reporting the pre-paid cards as active users – in some EU countries for active are counted the subscribers made a call or sent SMS within the last 6 or 9 months, in other countries this period is 3 months4. In Bulgaria, the digital operators report as active all pre-paid customers who have re-charged service usage credit at least once for the last 12 months, what is a comparatively long period compared to the EU countries. Pre-paid – post-paid subscribers ratio For the fourth year in succession more than half of the subscribers of the mobile operators use services through pre-paid cards. At the end of 2006 61% of the new subscribers use pre-paid cards and their relative share is 64% of the total market.
Pre-paid / post-paid subscribers ratio
2006 36% 64%
2005 33 % 67 %
2004 35% 65%
2003 38 % 62%
2002 54% 46 %
2001 98% 2%
2000 100 %
0 1 000 000 2 000 000 3 000 000 4 000 000 5 000 000 6 000 000 7 000 000 8 000 000 9 000 000
post-paid subscribers pre-paid subscribers
Source: Data submitted to CRC Figure 51 In 2006 one third of the new subscribers of the mobile operators are in the post-paid segment. The total pre-paid - post-paid subscribers’ ratio for the three mobile operators (VIVATEL, M-TEL and GLOBUL) remains close, while the share of pre-paid subscribers of MOBIKOM is greater. The average EU per-paid – post-paid subscribers ratio is 60/40 and it varies strongly across the countries – in Italy and Malta, for example, over 90% of all mobile subscribers use pre-paid cards, while in Finland the pre-paid subscribers share is barely 7%5.
4 12th Report on the Implementation of the Electronic Communications Regulatory Framework 5 Европейска комисия, 12th Report on the Implementation of the Еlectronic Communications Regulatory Framework, 2007
1 12th Report on the Implementation of the Telecommunications Regulatory Package, 2006 47 Market shares The following figures (Figure 52 and 53) illustrate the market shares dynamics for the four mobile telecommunication operators, calculated on the basis of number of subscribers, as well as on revenues generated from provision of voice telephony and other services through the networks for the period 2003 – 2006.
Market share of the mobile operators by number of subscribers
70.0% 68,3% 64,2% 57,6% 60.0% M-Tel 51,7% 50.0% Globul 39,6% 40.0% 38,3% 34,3%
30.0% 28,7%
20.0% Vivatel 8,5% 10.0% 3,4% 3% 1,5% Mobikom 0,7% 0,2% 0.0% 0% 0% 2003 2004 2005 2006
Source: Data submitted to CRC Figure 52
Market shares of the operators by revenues from provision of telecommunication services through mobile network
80.0% 78.9% 72.7% 70.0% 66.5% 60.0% 59.7%
50.0%
40.0% 36.0% 32.5% 30.0% 25.6% 20.0% 17.4% 10.0% 3.7% 1.7% 0.8% 4.0% 0.0% 0.0% 0.2% 0.3% 2003 2004 2005 2006
M-Tel Globul Vivatel Mobikom
Source: Data submitted to CRC Figure 53 Recent market ranking remains unchanged despite the beginning of subscribers repartition – a great number of the existing subscribers is looking for new contract clauses at new operator or want to benefit from the profitable promotional conditions, offered by other operators. For one-year term the market share of M-TEL, based on the number of subscribers has decreased by six percentage points, and based on revenues – by eight percentage points. Compared to the preceding year, GLOBUL succeeded to enlarge its market share by one percentage point in regard to subscribers and by four points – based on revenues. The third digital operator VIVATEL has increased its share by 5 percentage points and has managed to attract 8,5% of all
1 12th Report on the Implementation of the Telecommunications Regulatory Package, 2006 48 mobile customers. During the year the subscribers of the analogue operator continued to migrate towards the digital operators’ networks and as of 31.12.2006 its market share is insignificant – under 0,2%. The part of consumers using services of more than one operator keeps growing. This trend is due to the significant differences in the prices of the on-net and off-net calls, as well as to the variety of promotions for new subscribers, which were offered by the mobile operators during the year. According to Alfa Research survey6, at the end of 2006 almost a tenth of the population is subscribers of more than one operator. Significant market power operators In 2006 CRC has designated MOBILTEL EAD and COSMO BULGARIA MOBILE EAD as operators with significant market power on the market of mobile telecommunication networks and provision of voice services through them7. On these two operators are imposed specific obligations concerning interconnection: following the principles of non-discrimination, transparency and confidentiality when providing interconnection services. According to data of the European Commission for the EU, the weighted average market share of the leading mobile operators, calculated based on the number of subscribers is 39,4%, while the lowest market share has the market leader in the United Kingdom (26%) and the highest shares have the operators in Cyprus (over 90%) and Slovenia (over 70%).
5.4. Services New services introduced by the mobile operators in 2006 The digital operators offered variety of new services during the year, including data services based on new technology applications, directory and inquiry services and services, providing easier access for the customer, as well as new conditions for roaming services (Table 5).
Table 5 services Services Reference services Roaming services Other services based on new / Customer technology convenience operator applications services M-TEL • UMTS • M-Tel Contact • Vodafone • Green line 0800 applications • Electronic EUROCALL • HSDPA data prepaid account • Vodafone transfer services recharge WORLD (up to 3.6MB/s) • Prepaid account • Prepaid account • Mobile Team balance roaming (mobile data information router) • Vodafone Mobile Connect PC cards • Vodafone Mobile Connect PC modems • Video calls • Vodafone live! portal • Vodafone live! Mobile TV • BlackBerry (subscription plan customers) • Music and video
6 Alfa Research survey, published by investitor.bg 7 Decision of CRC No 1316 of 20.06.2006. Market shares by net revenues, according to the Methodology, art. 10, paragraph 2: Mobiltel – 68.16%, CBM – 31.02%, RTC – 0.61%
1 12th Report on the Implementation of the Telecommunications Regulatory Package, 2006 49 download
GLOBUL • i-mode • e-Bill • Balkans roaming • Ring back tone • Video calls • B-Connect Cash zone • Funcall • 3G internet Refresh access • Automatic • 3G Globul prepaid account Connect Center recharge (when using Data • Mobile Guide SIM) • Bulcollect payment service
VIVATEL • Mobile internet • MMS album packages • Televoting
Source: Data submitted to CRC
During the year M-TEL and GLOBUL offered the first 3G services, based on UMTS: M-TEL launched commercially 3G services in March and GLOBUL - in September 2006. The first 3G services that appeared on the market were video call and access to mobile data through UMTS/HSDPA network. Part of the new services on the market during the year are result from strategic partnerships between the Bulgarian and foreign operators. Based on partnership agreement with Vodafone, M-TEL offered data services, such as Vodafone Mobile Connect High Speed Data cards, access to Vodafone Live! Portal with global and Bulgarian content8, roaming tariff plans for the territory of Europe (Eurocall) and for the countries where Vodafone has branches or partnerships. GLOBUL, based on partnership with COSMOTE and NTT DoCoMo launched the I-mode service through which the customers have broadband access to content and applications, such as e-mail for example. Together with BTC VIVATEL offered first on the Bulgarian market bundled service of Internet access and mobile services for residential and business subscribers. During the year M-TEL introduced the new brand LOOP, focusing on the segment of young customers at the age of 14 to 26 years, mainly using pre-paid cards and having greatest readiness to change them for cards of other operators.
Breakdown of the revenues from provision of telecommunication services through mobile cellular networks
1 800 000 000 1 600 000 000 24% 1 400 000 000 22% N 18% 1 200 000 000 24% 1 000 000 000 18% 2% 21% 1% 5% 5% 800 000 000 17% 18% 0,3% 6% 600 000 000
revenuesBG in 6% 0,1% 47% 400 000 000 52% 54% 53% 200 000 000 1% 0,5% 2% 4% 0 2003 г. 2004 г. 2005 г.
other telephone calls SMS и MMS data transfer and mobile internet installation fees and subscriptions interconnection
Source: Data submitted to CRC
8 In the mobile portal Vodafone Live! the subscribers has access to news from the information agencies, music, videos, pictures, games, ring tones, software, inquiry services, chat, own mobile blog creation, etc. .
1 12th Report on the Implementation of the Telecommunications Regulatory Package, 2006 50 Figure 54 Main source of revenue growth for the operators is still the voice transmission. Almost half (47%) of the revenues from provision of services through mobile cellular networks are earned from provision of voice services. The text and multimedia messages have generated 5% of the digital operators’ revenues in 2006 (Figure 54).
Number of SMS and MMS sent, 2003 - 2006
600 000 000 538 309 423 550 000 000 494 904 342 500 000 000 444 558 468 450 000 000 400 000 000 332 088 315 350 000 000 300 000 000 250 000 000 200 000 000 150 000 000 100 000 000
50 000 000 78 000 1 763 230 3 491 229 1 944 542 0 2003 2004 2005 2006 SMS sent MMS s ent
Source: Data submitted to CRC Figure 55 The percentage of non-voice messages is expected to grow further due to the introduction of new technologies and the development of the mobile content market: for one-year term the total number of SMS and MMS sent has increased by 8% (figure 55).
Intentions for introduction of new services in 2007
In 2007 the two largest (on the basis of data on revenue and number of subscribers) operators MTEL and GLOBUL are expected to propose a series of new services. MTEL plans to offer new terminals for higher download speed, mobile payment for parking, new version of Vodafone live! and GLOBUL shall offer Blackberry, callback and videoportal. The third GSM operator VIVATEL is planning to launch 3G services.
5.5. Quality of service The next table presents data submitted to CRC by the mobile operators, including information for the number of complaints received by the mobile networks subscribers and the reasons that caused them, as well as data on the observed quality of service parameters.
Table 6 M-TEL GLOBUL VIVATEL MOBIKOM Total number of registered 4 050 5 739 904 21 complaints - number of justified 881 1 110 257 17 complaints - number of complaints responded to 3 303 5 638 904 3 in a written form Distributions of the complaints by reasons: - abuse of contract 376 142 0 0
1 12th Report on the Implementation of the Telecommunications Regulatory Package, 2006 51 - technical faults 101 469 363 1 - incorrectness of bills 2 435 2 921 124 8 - other 1 038 2 207 417 12 Unsuccessful call ratio (in %), 1,02% 0,3% 0,87% n/a including: - due to network overload 0,72% 0,2% n/a n/a - due to technical failures 0,3% 0,1% n/a n/a Average service activation time (hours) - for Internet /GPRS provision 0,2 1-8 n/a - - for provision of roaming 0,1 0, 08 -12 n/a - n/a – the operator has not provided CRC with the information requested Source: Data submitted to CRC The differences in the quoted data arise mainly from differences in the number of subscribers, the quality characteristics and the period of activity of the mobile operators. The main part of the complaints to M-TEL and GLOBUL concern incorrect bills, while for the third operator the majority of complaints are due to technical failures.
5.6. Prices and pricing policy The legislation in force in our country in 2006 makes no provision for regulation of the prices for mobile telephone services, including the prices of operators with significant market power. The operators of mobile cellular networks determine their prices and pricing policy in a free manner and provide the prices for information to CRC. Price baskets for consumption of mobile services The charts below present the consumer expenditures for mobile services in the OECD countries and Bulgaria, calculated on the basis of the three OECD mobile baskets (low, medium and high user baskets). The baskets cover the standard tariff plans, as well as pre-paid services. The average monthly expenditures presented are in Euro and are calculated on the basis of one-time installation fee, monthly rental, per-minute call prices and the SMS and MMS costs, according to the tariff plans. Each of the baskets contains averaged consumption scheme defined by OECD for the countries within the organization. In February 2006 the structures of the three types of baskets – low, medium and high user have been revised: the number of messages and calls have increased, as well as the percentage of calls to mobile networks, while the one of calls to fixed networks has decreased. The new baskets contain the following elements: ¾ Low user basket: contains 33 SMS and 30 minutes outgoing calls, 22% of them to fixed telephone lines, 70% to mobile networks (48% are mobile on-net calls and 22% - mobile off-net calls), and 8% - for voice mail; ¾ Medium user basket: contains 50 SMS and 65 minutes outgoing calls, 21% of them to fixed telephone lines, 72% to mobile networks (48% are mobile on-net calls and 24% - mobile off-net calls) and 7% - for voice mail; ¾ High user basket: contains 55 SMS and 140 minutes outgoing calls, 20% of them to fixed telephone lines, 73% to mobile networks (47% are mobile on-net calls and 26% - mobile off-net calls) and 7% - for voice mail. Every basket has a specific distribution of calls in the peak and off-peak hours, as well as specific call duration. For the sake of comparison of the expenditure levels in the OECD countries and Bulgaria, the tariff plans of GLOBUL and M-TEL in force as of end of 2006 are used. The calling plans for consumers were taken into account, excluding the promotional plans, as well as the family programmes offered by GLOBUL. The charts showing each of the consumption levels present the best option for every country, including Bulgaria (tariff plan with lowest consumer expenditures at the given usage pattern). The full description of the baskets can be found on the web page of Teligen Ltd9.
9 http://www.teligen.com/publications/oecd.pdf
1 12th Report on the Implementation of the Telecommunications Regulatory Package, 2006 52
Average monthly expenditure for mobile services in the OECD countries and Bulgaria - T-Basket mobile, low user basket 40
35
30 29.9 d
25 24.4
20 18.6 18.0 16.9 16.9 16.3 16.3 16.4 16.0 14.9
15 14.0 13.4 13.3 13.1 12.9 12.8 12.7 12.2 11.8 11.4 11.0 10.7 9.9 9.7
Euro per month,VAT include month,VAT per Euro 10 8.8 8.3 8.4 8.0 7.3 6.6 5
0 Italy USA Spain Japan Korea Poland Ireland Turkey France Finland Mexico Iceland Austria Greece Canada Belgium Portugal Norway Bulgaria Slovakia Hungary Sweden Denmark Australia Germany Netherlands Switzerland Luxembourg New Zealand United Kingdom Czech Republic
Cost experienced by the user Average
Source: Teligen, T-Basket (November 2006 version), data submitted to CRC Figure 56
Average monthly expenditure for mobile services in the OECD countries and Bulgaria - T-Basket mobile, medium user basket
70
60 d 50 43.9
40 35.2 33.3 32.9 30.0 29.7 28.3 28.4 28.4
30 27.7 27.0 27.0 26.8 26.6 25.1 24.6 23.2 22.5 22.7 21.2 19.5
20 18.2 18.3 17.2 16.6 16.4 16.0 15.1 13.7 13.8 Euro per month,VAT include month,VAT per Euro
10 8.5
0 Italy USA Spain Korea Japan Poland Ireland Turkey Finland Mexico Iceland France Austria Austira Greece Belgium Canada Portugal Norway Bulgaria Slovakia Sweden Hungary Denmark Germany Netherlands Switzerland Luxembourg New Zealand United Kingdom Czech Republic
Cost experienced by the user Average
Source: Teligen, T-Basket (November 2006 version), data submitted to CRC Figure 57
1 12th Report on the Implementation of the Telecommunications Regulatory Package, 2006 53 Average monthly expenditure for mobile services in the OECD countries and Bulgaria - T-Basket mobile, high user basket
120
100 d
80 67.9 63.3 60 50.1 49.6 49.8 48.9 48.4 47.2 46.5 45.5 45.1 44.0 42.3 42.5 41.8 38.8 38.9 37.8 40 37.4 35.4 33.6 33.8 32.6 30.5 29.9 29.5 27.1 26.6 Euro per month,VAT include month,VAT per Euro 25.0 22.3
20 17.6
0 Italy USA Spain Japan Korea Ireland Poland Turkey Iceland Finland Mexico France Austria Greece Belgium Canada Portugal Norway Bulgaria Slovakia Sweden Hungary Denmark Australia Germany Netherlands Switzerland Luxembourg New Zealand New United Kingdom Czech Republic
Cost experienced by the user Average
Source: Teligen, T-Basket (November 2006 version), data submitted to CRC Figure 58 The results show that compared to 2005, the average monthly expenditure for the three baskets has decreased by 31% up to 48%. As it was already stated above, average levels of the OECD countries consumption were used for the calculation of the expenditures. These levels do not take into account the specific consumption pattern of Bulgaria. It should be noted that the two GSM operators in our country offer to the customer a variety of promotions with discounts from the monthly rental charge for certain tariff plans, inclusion of additional minutes for outgoing calls, etc., which leads respectively to lower monthly average consumer expenditures. When calculating the consumption expenditures for Bulgaria the free minutes for outgoing calls included in the tariff plans, as well as the SMS included were excluded, while the call minutes included in Relax 100 and Relax 300 plans offered by M-TEL and in Globul Smart and Globul Smart Group plans offered by GLOBUL were not taken into account as the minutes for calls can be used to several numbers of the network and not to all subscribers of the operator. If these minutes are taken into account, i.e. if it assumed that the subscriber makes outgoing calls only within the group and the volume of minutes in the tariff plan, the average monthly expenditure for the M-TEL plans Relax 100 and Relax 300 decreases for the three baskets on the average respectively by 41% and 24%, and the for the Globul Smart and Globul Smart Group plans offered by GLOBUL – by 32% and 31%. Fixed-to-mobile termination rates The retail prices for mobile services depend on the pricing strategies of the companies, as well as on the negotiated interconnection charges with the BTC AD fixed network and the other fixed and mobile networks. Comparisons of the fixed-to-mobile termination charges of Bulgaria and the European countries are presented in Figure 59.
1 12th Report on the Implementation of the Telecommunications Regulatory Package, 2006 54 Mobile termination rates as of 01.01.2007
0.2
0.16
0.12 о евр 0.08
0.04
0 Italy Litva Spain Malta Latvia France Greece Ireland Poland Iceland Finland Estonia Austria Turkey Cyprus Sweden Bulgaria Belgium Slovenia Norway Slovakia Portugal Romania Hungary Denmark Germany Switzerland Netherlands Luxembourg Czech Republic Czech United Kingdom United
peak traffic off-peak traffic total
Source: IRG MM WG Figure 59 The data result from a study of the IRG Mobile Markets Working Group and is calculated as weighted- average for each of the countries, taking into account the number of subscribers and the termination charges of each of the mobile operators. The greater part of the operators covered by the study applies unified termination rates, regardless of the type of the originating network (fixed or mobile). The exceptions are Bulgaria, Portugal, Poland and Slovenia. As can be seen from the chart, Bulgaria is the country with highest average fixed-to-mobile termination rates which is a prerequisite for closing of traffic within the mobile networks and restriction of the fixed operators’ competitiveness.
Average mobile termination rates in the EU
25
20 19.1 19.46 19.46 e
15 14.58 EU- 25
12.53 Bulgaria 11.4 10 eurocents perminut
5
0 July 2004 October 2005 October 2006
Source: 12th Report on the Implementation of the Electronic Communications Regulatory Package Figure 60 The chart above shows that the average mobile termination rates for EU-25 have decreased by 9% for one-year period, while those for Bulgaria – only by 1,8%. According to data of the European Commission10 the greatest drop is observed in France – by around 24%, as well as in Denmark, Austria, Portugal and Sweden (by around 20% for each of the countries). Nevertheless, the average mobile termination rates are around 9 times higher than the average rates for fixed termination at double transit level. Prospects for development
10 12th Report on the Implementation of the Telecommunications Regulatory Package, 2006
1 12th Report on the Implementation of the Telecommunications Regulatory Package, 2006 55 The future development of the mobile services market depends to a great extent on the redistribution of the existing subscribers and to an inconsiderable extent to the attraction of new subscribers (less solvent and, therefore, less attractive customers). Of a great importance will be the existing subscriber’s inclination to change the operator and the operators’ readiness to facilitate the transition from one operator to the other. The introduction of number portability is expected to be an additional stimulus for the competition on that market segment, as it facilitates the user’s transfer to more profitable tariff plans and conditions of other operators, as well as creates opportunities for the market players to attract easily subscribers from other networks.
Ported mobile numbers in the EU member states (% of all mobile subscribers)
70% 64.0% 60%
50%
40% 32.3% 30% 21.9% 21.1% 20% 15.5% 14.8% 10.5% 10% 10.3% 6.2% 3.4% 1.9% 1.3% 2.4% 1.6% 1.8% 1.2% 1.4% 0.9% 0.6% 0.7% 0.8% 0.8% 0% 0.1% 0.0% Italy Malta Spain Latvia Ireland Poland Finland France Cyprus Estonia Austria Greece Belgium Portugal Slovakia Slovenia Hungary Sweden Denmark Lithuania Germany Netherlands Luxembourg Czech Republic
Source: 12th Report on the Implementation of the Electronic Communications Regulatory Package Figure 61
As of October 2006 31,4 mln subscribers from 24 EU member states have used the opportunity to change the operator serving them, without changing their number. The greatest number of ported numbers is in Finland (where over half of the subscribers have ported their numbers), Denmark and Sweden. This service is still not that popular in the new member states, which could be explained by the later introduction of number portability in these countries. The upcoming implementation of the 2002 European Regulatory framework through the new Electronic Communications Law shall empower the regulator to intervene on the wholesale markets for origination and termination on individual mobile networks and to apply “ex-ante” regulation. Even though the mobile telephone services market enters gradually its saturation period, its significance within the telecommunications market continues to grow, having in mind the revenues realized, the traffic generated and the customers attracted.
1 12th Report on the Implementation of the Telecommunications Regulatory Package, 2006 56