TIA

Telecommunications Industry Association (TIA)

Europe

Western Europe
Wireless
Internet and High-Speed Access
Eastern Europe and Newly Independent Countries
Landlines
Wireless

Western Europe

Western Europe is the most mature telecommunications market in the world. Landline penetration was 52.6 percent, second only to Canada, and the wireless penetration was 107.9 percent in 2007, the highest of any region, because many people have more than one subscription.

Wireless

The wireless market soared past the landline market in 2000 and by 2007 reached 428 million subscribers, compared with 208 million landline subscribers. The landline market began to decline in 2002, as some Europeans started relying exclusively on wireless. There were 7 million fewer landline subscribers in 2007 than in 2004, and we expect the total to drop by 9.6 million in the next four years to 198.7 million in 2011 (49.9 percent penetration). In 2007, Finland and Portugal were the only countries with a penetration rate lower than 40 percent. Switzerland and Germany had the highest landline penetration rates, at 65.4 percent and 65.2 percent, respectively, with Iceland nearly matching them at 64.7 percent.

When wireless penetration passed 70 percent in 2001, there was a marked slowdown in growth. After rising 58.1 percent in 2000, the number of wireless subscribers in Western Europe increased only 16.9 percent in 2001. Growth has since slowed to mid-single digits and by 2011, we expect only 0.2 percent growth. The area is now saturated and only small incremental growth is expected in the future.

Internet and High-Speed Access

Even though 71 percent of Internet connections are now broadband, the broadband subscriber base continues to grow rapidly. In Western Europe, where 77 percent of Internet subscribers are on broadband, 18 million broadband subscribers were added in 2007, the second largest single-year gain after the 19.5 million in 2006. Germany is the leading broadband territory, with 16.7 million subscribers in 2007, followed by France and the United Kingdom at 14.5 million each and Italy at 10.8 million. These four countries comprised two-thirds of the broadband connections in Western Europe in 2007. Although annual increases will moderate as virtually all Internet subscribers complete their migration to broadband, Western Europe will continue to add more than 10 million new subscribers annually during the next four years, for a cumulative increase of 50.4 million).

For more information, statistics, country reviews and forecasts, please see the TIA 2008 Telecommunications Market Review and Forecast.

Eastern Europe and Newly Independent Countries

Entrance of new member countries from the Eastern European market – including the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Slovakia, and Slovenia – into the EU creates increased pressure to open markets to competition.

New EU members are also upgrading their telecommunications infrastructures to compete with other EU countries. In the process, we expect competition to increase, prices to come down and availability and quality of service to improve.

There is also a fledgling broadband market in Eastern Europe, with about 5 million subscribers in Russia and more than 18 million in the region as a whole. Declining costs are making broadband more accessible. Rising Internet penetration will expand the potential market for broadband. We expect broadband access revenue to reach $96 billion by 2011.

As in other regions, text messaging has been an important driver of wireless subscriptions, in some cases because it is priced lower than voice services. In Hungary, for example, the lower cost of SMS has made it the fastest-growing wireless application. Music is another application proving to be particularly popular. The ability to supplement voice with popular data services is helping to expand the market.

Landlines

Eastern Europe (including the republics of the former Soviet Union, some of which are in Central Asia) has a declining population, a factor moderating telephone subscription growth. Landline penetration has been dropping, and the number of landline subscribers has also decreased, although at very low single-digit rates. Russia is the dominant country in the region, with 43 million landlines, representing 38.6 percent of the total.

Central and Eastern Europe is several years behind Western Europe in the development of its broadband market but it is catching up. Broadband growth has accelerated steadily during the past six years, and for the first time in 2007, a majority of Internet subscribers used a broadband connection, as 7.7 million subscribers were added. Russia has the largest broadband market in Central and Eastern Europe at 5.0 million subscribers, with Turkey next at 4.0 million, followed by Poland at 3.3 million, Romania at 2.0 million and Hungary at 1.0 million. These five countries accounted for 83 percent of all Central and Eastern European broadband subscribers in 2007. We expect an even larger increase of 9.5 million in 2008, at which time the broadband share will have risen to 65 percent of Internet subscribers. Thereafter, annual increases will begin to moderate. Nevertheless, more subscribers will be added annually during each of the next four years than in any year prior to 2007. The overall broadband subscriber base in Central and Eastern Europe will nearly triple as the market grows by more than 34 million.

Wireless

The wireless market added 15 million subscribers in 2007, reaching 379.3 million. The wireless market surpassed the landline market in 2003 and widened the gap in 2004, when it was 15.8 percent higher. In 2000, the Czech Republic, Estonia and Slovenia became the first countries to have more wireless than landline subscribers. Albania and Hungary joined that group in 2001. Wireless subscribers now outnumber landline subscribers in most countries in the region, with wireless subscribers totaling 70 percent more than landline's 111.5 million. Russia retained its position as the country with the most wireless subscribers, growing 145 million in 2007.

Wireless penetration averaged 97.3 percent for the region in 2007, up from 93.3 percent in 2006. There are wide disparities in penetration among countries. In Bulgaria, Croatia, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Russia and the Ukraine, more than 100 percent of the population subscribes to a wireless service, among the highest percentages in the world. Cyprus, Malta, Poland, the Slovak Republic and Slovenia have penetration rates above 90 percent, while Belarus and Romania have penetration rates above 80 percent. By contrast, wireless penetration is less than 60 percent in Albania, Bosnia/Herzegovina and Moldova.

By 2011, the penetration rate for the region is projected to reach 104 percent.

For more information, statistics, country reviews and forecasts, please see the TIA 2008 Telecommunications Market Review and Forecast.

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