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March 27, 2009
Rumors have recently emerged that Telefónica O2 is in negotiations to purchase an Internet service provider in Germany — HanseNet, which is owned by Telecom Italia, or United Internet, which is based in Montabaur, Germany. Either acquisition would allow the Madrid-based operator to grow its fixed-line business in the country to more than 2m subscribers. The German market has become increasingly competitive for stand-alone mobile operators as the major players, T-Mobile and Vodafone, have begun consolidating the capabilities of their fixed and mobile networks. Pyramid Research estimates that O2, with a 13% market share, lags behind T-Mobile (37%) and Vodafone (34%). Although there has been no mention of the price Telefónica is hoping to pay for either ISP, the purchase would boost O2’s share of the fixed-line market from a meager 200,000 subscriptions in 2008.
Exhibit 1: Mobile subscriptions in Germany by operators, 2008-2013
Source: Pyramid Research, Germany Mobile KPI Forecast, Q1 2009
More importantly, acquiring an ISP would help Telefónica O2 bolster the offerings of its enterprise business in the highly competitive German market. In late 2008, Telefónica O2 formed a business solutions unit offering fixed and mobile subscriptions as well as systems integration and network management functions. With T-Mobile already providing a suite of fixed and mobile services to its clients, and with Vodafone, helped by its Arcor subsidiary, actively promoting its fixed-mobile bundles to enterprise clients, O2 remains limited in its capabilties for German customers. With mobile enteprise subscriptions in Germany forecast to increase from 12.3m in 2008 to 13.4m in 2013, O2 is seeking a way of capturing a share of this lucrative market. We recently predicted that mobile operators will restructure their businesses to focus better on enterprise customers.
Such a comprehensive strategy has already paid off for Telefónica O2 in the Czech Republic, where it was successful in securing a €350m contract to provide a host of communications and network management services for DHL. The control of an ISP in Germany would help Telefónica complement its mobile broadband offerings with a fixed-line component. The potential acquisition would also help it make significant progress in providing a bundled fixed-mobile Internet package to rival those of Vodafone-Arcor and T-Mobile.
— Andrei Tchadliev, Analyst, EMEA
Related content:
Mobile Enterprise Services: Growth in Data Services Provides Resilience in Difficult Market
Telecom Insider published March 2009
Despite slowing revenue growth, Pyramid Research expects the enterprise market in a sample of seven European countries — Austria, the Czech Republic, Germany, the Netherlands, Poland, Romania and the UK — to reach 37.5m subscriptions in 2013, up from 33.9m in 2008. This Telecom Insider examines the mobile enterprise services market in Europe, focusing on the economic environment, overall mobile market trends, business segment developments and the impact on revenue and technology adoption by business and subscription types. The report includes case studies of the following markets: The Czech Republic, Germany, Poland and the UK.
Europe Mobile Enterprise Forecasts, Q1 2009: Austria, the Czech Republic, Germany, the Netherlands, Poland, Romania and the UK
Forecasts published March 2009
Enterprise subscribers are the most profitable and prized mobile users because of their lower churn rates and high usage of mobile data. Our Mobile Enterprise Forecast products analyze seven key European markets, tracking the opportunities and trends in the enterprise market. Each country Forecast is updated twice annually and includes enterprise market sizing, operator market shares, total revenue and average revenue per user (ARPU) by business size and operator.
Mobile Broadband Computing Services: Complement or Substitute for Fixed Broadband?
Research Report published March 2009
This report examines mobile broadband services enabled by 3G and WiMAX networks on a global, regional and market-by-market basis, focusing on service plans offered for computing devices (mainly netbooks, laptops and MIDs). It assesses the positioning of mobile broadband relative to fixed alternatives, helping to identify the best strategies for both developed and emerging markets. Built on extensive case studies, the report provides a five-year outlook on mobile broadband computing trends, including subscriber numbers, penetration levels and revenue expectations.
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