Germany Telecommunications Report Q4 2013: New research report available at Fast Market Research

From: Fast Market Research, Inc.
Published: Fri Oct 11 2013

Germany is Europe's largest telecoms market, however there are diminished subscription addition opportunities for mobile and broadband operators, owing to the maturity of the market. As a result the competitive dynamic is geared towards operators selling higher value services such as fibre, LTE and converged service packages as a way of improving financial performance. This has resulted in several large mergers, as well investment in fibre and 4G-LTE infrastructure. In light of financial constraints operators are also pursuing cost efficiencies, for instance, Deutsche Telekom is implementing vectoring to increase speeds and compete with cable operators, and limiting expensive fibre deployments.

Full Report Details at

Key Data

* Broadband growth came in below our expectations in 2012 as a result of a net loss of DSL subscriptions, as well as slow uptake of dedicated mobile broadband subscriptions despite the widening availability of LTE services.
* Growth of 3G subscriptions for handheld devices has continued to boom, up 18.8% y-o-y to 34mn at YE12 (including 1.12mn LTE subscriptions). This trend has been driven by demand for smartphones, With Vodafone reporting 37.5% smartphone penetration on its network at the end of Q213, up from 25.6% a year earlier, while the corresponding figure for O2 reached 29% at the end of Q213.
* SMS IP substitution has taken hold in Germany, negatively affecting operator revenue. Vodafone reported a 17.8% y-o-y decline in messaging volumes to 4.35bn in Q213. Vodafone is the only operator to report messaging volume data, but BMI believes its results reflect the trend affecting all operators in the market.

Key Trends And Developments

Recent months has seen resurgence in acquisition activity in the German telecoms market. In June 2013 Vodafone offered to buy Kabel Deutschland Group (KDG) for EUR10.7bn (US$14bn). The deal was recommended by KDG's directors, suggesting that a competing informal offer from Liberty Global Inc (LGI) has already been assessed and rejected. In July 2013 Liberty Global indicated that it would not raise its bid, meaning Vodafone's bid is likely to be successful. The merger would create Germany's second largest fixed broadband provider, and generate significant cross-selling opportunities for Vodafone, the second largest mobile operator by subscriptions. If the deal is concluded BMI believes it would create a credible competitor for incumbent Deutsche Telekom across all areas of the telecoms market.

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