ST Wholesale Access Won't Result In Fixed Market Growth
The Slovakian Supreme Court has overruled an appeal from Slovak Telekom, determining that the telecoms operator must allow wholesale access to its copper and fibre optic lines for its competitors. Slovak Telekom was appealing an earlier ruling by the telecoms regulator TU SR, which identified the incumbent as an operator with significant market power (SMP) in Slovakia. BMI believes this is good news for alternative operators which have struggled to compete with Slovak Telekom. However, the growing reliance on mobile phones in favour of fixed connections means that we continue to forecast decline in the market.
Slovak Telekom is the incumbent former monopoly telecoms operator in Slovakia, now majority-owned (51%) by Deutsche Telekom and the remaining 49% by the Slovak government through various state agencies and funds. Despite liberalisation of the market over 10 years ago, Slovak Telekom maintains a virtual monopoly over the fixed and broadband markets, as regulation has largely failed to boost the level of competition and alternative operators have had very little impact on market dynamics. Slovak Telekom has delayed interconnection agreements as much as possible, frequently appealing the decisions of the regulator and charging high interconnection prices to its rivals.
In 2005, seven alternative operators signed interconnection agreements with Slovak Telekom, after the incumbent reduced its interconnection rates to a more reasonable level. However, the market has continued to post net fixed access declines every year since. TU SR reports that the number of fixed lines at the end of 2005 totalled 1.12mn, and this had dropped to 869,000 by the end of June 2013. Residential and business lines have fallen at similar rates, with the former still accounting for 75.8% of lines at the end of H113, compared to 76.7% in 2005. Slovak Telekom reports that it had 932,000 lines in service in Q213, which differs from the data provided by the regulator. The disparity likely relates to the exclusion of ISDN subscription data from the regulator's figure for total fixed-line subscriptions while Slovak Telekom may also be including payphone lines in its totals. Furthermore, the regulator also reports significant decline in the number of calls being made using fixed telephones, with a decrease in the overall number of minutes also. Aside from the lack of competition to Slovak Telekom, the fixed market is suffering in Slovakia as the fixed-to-mobile substitution trend is playing out.
|Drop-off In Call Volumes Mirrors Subscriber Decline|
|Slovakia Fixed Internal Calls & Minutes, 2005-H113|