Recent Study: Ireland Telecommunications Report Q3 2013

BMI's forecasts for Ireland's fixed-line voice, broadband and mobile communications markets have been revised downwards once more in light of falling subscriptions across the board. The only positive growth worth noting is that of the country's smallest mobile player, Hutchison 3 Ireland, but with 3 Ireland resorting to a network sharing partnership with Vodafone and the latter buying another fixed-line business telecoms operator, it is clear that the profitability of mass-market consumer services is in doubt. This may, however, encourage operators to become more creative in terms of the type of products they develop over the next few years.

Key Data

* Mobile subscriptions declined by 0.6% year-on-year (y-o-y) to the end of 2012, as the market continued to be affected by the macroeconomic crisis.
* The fourth consecutive quarter of dedicated mobile broadband net subscription losses occurred in Q412. As a result, total subscriptions declined 6.6% y-o-y, leading us to revise down our growth forecast for Ireland's broadband market.
* New data from 3 Ireland's parent company Hutchison Group show the operator to have a high proportion of postpaid subscriptions in its customer base (64%), while it also reports the highest ARPU in the market, albeit by a narrow margin.

Full Report Details at
- http://www.fastmr.com/prod/617055_ireland_telecommunications_report_q3_2013.aspx?afid=301

Key Trends & Developments

Broadband continues to offer the best opportunities for growth and return on investment in Ireland as cable and fixed wireless accesses, in particular, recorded further subscriber growth. This is being undermined, to an extent, by the waning demand for xDSL and mobile broadband connections. In light of this trend, we take a slightly more bullish view of incumbent Eircom's efforts to develop its own fibre-to-the-home/ cabinet (FTTH/C) network and plans to offer a full range of advanced services over that platform. Nevertheless, it will face an uphill battle to win customers away from cable operator UPC and those that remain faithful to mobile broadband. Fibre will be an expensive proposition and one that will be difficult to sell at a time when the economy is forecast to underperform. As a long-term investment, and assuming the economic recovery is sustainable, Eircom should be in a good position to capitalise on demand for 'broadband everywhere' services.

Additional 900/1800MHz spectrum was allocated to the four mobile network operators in Q412. We expect to see this spectrum pressed into use in offering 4G and rural mobile broadband services which, if marketed correctly, could spur a resurgence in growth in the broadband arena. Until then, we do not see Ireland improving its Risk/Rewards Ratings score, which remains unchanged this quarter.

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