The acquisition of Orange Austria by the fourth-placed operator 3 Austria is the latest round of consolidation in Austria’s fiercely competitive mobile market. Two MNOs have now been lost since T-Mobile strengthened its market position by buying tele.ring in 2006. 3 Austria has shown its commitment to the market and is a determined move for an operator with only about 10% market share.

Market revenue has steadily fallen since 2006 despite increases in the number of subscribers and traffic. This trend is likely to continue during the next two years as MNOs bear the brunt of the drop in MTRs imposed by the regulator, the continuing implementation of the EU’s Roaming Regulation, which has been extended to 2013, and the falling cost of mobile voice minutes and data as operators respond to competitive pressure by lowering their rates and package prices. From 2013 some recovery should be expected as MNOs are better able to exploit the potential of high-end mobile data services based on upgraded networks using HSPA and LTE technologies, but for now revenue expectations represent slim pickings.

Overall mobile revenue fell 3.4% in the second half of 2011, year-on-year, following a 2.7% fall in 2010. The decline is mainly attributed to the wholesale sector, which has fallen more sharply since 2008, while overall revenue has been buttressed by the retail sector benefitting from continued growth in revenue from data and value-added data services (including SMS and MMS), though this has not offset losses elsewhere.

Hand in glove with falling revenue, MNO investment in the mobile sector is likely to continue to tail off during 2012 in the wake of the poor economic environment which has affected consumer spend, as also the fact that the larger part of investment in network upgrades had been completed by the end of 2009. Investment in now concentrated in upgrades to support LTE.

These issues are explored in depth in the updated Austria – Mobile Market Insights, Statistics and Forecasts report.

Key developments:

LTE to be available to a quarter of all Austrians by 2013; mobile TV streaming success with more than 50 channels available; 2011 Frequency Utilization Plan opening up 800MHz spectrum for 4G use; strong subscriber growth keeping mobile sector revenue steady, Telekom Austria forms TA Group M2M subsidiary to manage its involvement in the M2M sector; 3 Austria buys Orange; regulator data to June 2010; operator data to Q3 2011, market developments to early 2012.

Companies covered in this report include:

Orange, 3 Austria, A1, T-Mobile, Tele2.

Henry Lancaster,
Senior Analyst, Europe