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Telecommunications in
Western Europe

by Faulkner Staff

Copyright 2018, Faulkner Information Services. All Rights Reserved.

Docid: 00011144

Publication Date: 1802

Report Type: MARKET

Preview

Some of the largest and most active telecommunications markets in the world are in Western Europe. Most of the region is now open
to competition, but some of the former monopoly carriers have grown to become
global powerhouses in the industry. Broadband access and wireless services, in
particular, have emerged as the hot trend in the region thanks to aggressive
infrastructure build outs. This report provides a snapshot of the telecom
sectors in Western Europe, including statistical information for each of the
countries; identifies the market leaders; and analyzes the trends that are
driving the market.

Report Contents:

• Executive Summary
• Market Dynamics
• Market Leaders
• Market Trends
• Strategic Planning Implications
• Web Links
  

• Related Reports

Executive Summary

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Western Europe’s telecommunications market is
among the most advanced and largely open to
competition.

 

The groundwork for telecom liberalization started in the early to mid-1990s
when the region’s major telecom carriers rebuilt and digitized their
networks. The continuing trend toward liberalization has resulted in more
competition. When the countries of the European Union (EU) embarked on
unifying their economies, they consequently began building a telecom
network with better capacity and bandwidth that could one day support a
unified information society as well as an electronic community. The
efforts spearheaded by the EU and put into practice by participating
members have already started bearing fruit. Deregulation and investment in
infrastructure has been so prolific, in fact, that there is speculation
that the Western European telecom industry could rival that of the US
within a few years. 

Western Europe has provided evidence that it will continue to implement
regulations, policies, and measures to facilitate the growth, development,
and sustainability of the region’s telecommunications market, but there is
still much work to do. To increase market share, for example, European
telecom operators have focused on value-added services, broadband, and
mobile data communications. European leaders have invested time and
resources into attracting foreign investment and have also increased
broadband deployment and e-commerce accessibility. European businesses
have followed the lead of European governments by investing in e-business,
data storage, software, CRM, SCM, intranets, IT security, and
extranets.

Figure 1 shows a map of the region.

Figure 1. Europe

Source: CIA World Factbook

The nations of Western Europe are generally more technologically advanced than their Eastern
counterparts. The nations covered in this report are: Andorra, Austria,
Belgium, Denmark, Finland, France, Germany, Greece, Iceland, Italy, Ireland,
Liechtenstein, Luxembourg, Monaco, Netherlands, Norway, Portugal, Spain, San
Marino, Sweden, Switzerland, and the United Kingdom.

Market Dynamics

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Many of the nations in Western Europe
are allied through the European Union. These nations were challenged to meet the
guidelines set by both national regulatory agencies and the European
Commission (EC). These guidelines, in effect, communicated the political,
economic, and financial missions of the EU. The EC is mandated to promote
an Information Society that will consequently lead to a more egalitarian
distribution of access to technology. To do this, the EC has improved the
regulatory framework for licensing, frequency allocation, security, and
copywriting. Much of this legislation mimics the policies enforced in the United States. Included in the EC charter are provisions for enhancing Europe’s technology knowledge base, improving opportunities for employment in
the information service and content sectors, and supporting international
cooperation in market access, interoperability intellectual property
rights, and standards. The protection of citizen’s privacy interests is
another goal addressed by the EC charter.

To foster economic integration, a number of procedures have been developed.
Among these are telecommunications policies drafted to stimulate a free
and open market for a seamless pan-European communications system and a
deregulation process that began in 1998. While many of the countries
listed above have been relatively successful in opening their markets,
many of the dominant operators in Western Europe
are still partially owned by their national government.

The telecom infrastructure in Western Europe is generally highly advanced.
One area where Europe is leading is wireless technology. As with most of
the developed world, Western Europe currently relies upon 4G technologies as its
primary communications protocol. However, 5G is poised to make its entrance into
the multi-nation market within the next few years, likely disrupting it in much
the same way as 4G’s replacement of 3G did.

Western
Europe contains some of the world’s leading telecommunications carriers
including BT Group, Deutsche Telekom, Orange, Telefonica, and
Vodafone.

Basic economic indicators and statistics relating to the telecommunications
industry are presented in Table 1. The data listed in the table below provides
a comparative snapshot for the state of the market at the end of 2009. Some of the data discussed in the
country-by-country break down contains more recently available data. Note that the ITU does not have
complete Internet penetration data. 

Source: International Telecommunications Union and World Bank

Andorra

Andorra is a tiny landlocked country located between Spain and France that
is home to about 77,281 people. The country's telecommunications market is still
a monopoly. Andorra Telecom is the monopoly provider of voice and data
communications, radio, and television services. As a result, the country's key
telecom indicators trail many countries in Western Europe.

According to the most recent information from the International
Telecommunications Union, there are about nearly 40,000 landlines in operation in the
country, which means 52 percent of the population has a connection. The mobile
sector is a little more robust, but the country's wireless teledensity of 88
percent is the lowest among the countries covered in this report since there is
only one option for service.

Andorra Telecom is also the only ISP, but the company does operate a fiber
optic network that covers most of the country. Sixty four percent of the
population uses the Internet and 42 percent have a broadband Internet
subscription.

Austria

Austria
has a well-developed telecommunications market. The Austrian government opened
the market to competition in 1998 in order to comply with European Union
policies, and the country’s current telecommunications policy, enacted in 2003,
brought the country fully in line with EU directives. The former monopoly
service provider, Telekom Austria, now faces competition in all sectors of the
market, but it is still the dominant service provider.

The
Austrian telecom regulatory authority is currently working with
the European Union on reviewing the state of the market so it can develop a game
plan to further promote competition. As
part of this plan, Telekom Austria is considering a restructuring plan that
would spin off its fixed-line network into a standalone company: similar to a
plan used by BT Group. This new company would then offer wholesale network
access to Telekom Austria’s retail division as well as competitors.

 The majority of landlines are operated by Telekom
Austria, which is still 29 percent owned by the Austrian government, although
the government has expressed interest in divesting its stake in the company.
Tele2, a regional alternative carrier, is the biggest competitor in the
fixed-line market.

The wireless sector is one of the strongest and most advanced in Western Europe. The
country has 15 million wireless customers in Austria, putting the penetration
rate at 172 percent. There are three wireless carriers operating in Austria: A1, T-Mobile,
and 3 . All of them operate 4G LTE networks. In January 2017, the country's
telecom regulator announced it is planning to auction off spectrum for 5G
services in 2018.

According to the ITU, 91 percent of the Austrian
population uses the Internet, and there are 2.8 million broadband subscribers — a
penetration rate of 47 percent. Telekom Austria is the leading ISP and it is
starting to introduce FTTH services in some cities across the country. The
Austrian government invested approximately $120.6 million into the country's
broadband infrastructure in 2017 to help the market meet some of the goals of
the national broadband strategy.

Belgium

Belgium’s telecommunications sector has continued to grow at a consistently
high rate, with the mobile segment expected to account for a large portion of
future growth. The country’s location between France, Germany, and The
Netherlands, has helped Belgium emerge as a regional communications hub for
Western Europe, and several companies have helped built out the country’s
infrastructure. The market has been liberalized since 1998, but Belgacom, the
former monopoly, still has the largest share of the local and long distance
market. Belgacom’s major competitors are COLT Telecom, Scarlet Telecom, and
Telenet, a cable operator.

Like many countries in the region, the wireless market is much larger than
the landline market; 38 percent of the population has a landline connection
while the wireless density rate is 127 percent. There are three mobile companies
operating here: Proximus (a division of Belgacom); BASE, and Orange. All three
offer LTE-A services, and Proximus is already testing 5G technologies that
operate at 70G bps.

Belgium
has a unique Internet sector because the country trailed most of Western Europe
in adopting the Internet but it grew quickly. Secondly, in many other countries
in Western Europe, the incumbent service providers were the first companies to
offer broadband Internet access, the Belgian broadband market was pioneered by
cable companies. Once these companies started to have success, Belgacom followed
suit by rolling out DSL. Today, 95 percent of the country is online and 49
percent have broadband connections.

In January 2017, Belgacom announced plans to invest $3.1 billion between
then
and 2027 into its fiber-optic network. The goal is to bring FTTH services to 85
percent of the population.

Denmark

Denmark
started liberalizing its telecommunications market in 1995, three years ahead of
the European Union deadline, with the expressed intent of bringing high-quality,
cost-effective services to the Danish population. The National IT and Telecom
Agency (NITA), the country’s communications regulator, promoted low
interconnection rates and forced TDC, the former monopoly provider, to provide
access to the local loop to its competitors. Some competitors entered the market
as resellers, while some facilities-based operators invested in their own
infrastructure.

 Denmark has 1.8 million local access lines,
a fixed-line teledensity rate of 31 percent. TDC, the former monopoly service
provider, still has over 70 percent of the landline market. Tele2 Denmark,
which is now owned by Telenor, is also present in the market. In 2017, reports
surfaced that Telia is interested in making an offer to buy TDC.

Denmark
had 9.2 million mobile customers at the end of 2015, which put the penetration
rate at 134 percent. There are four companies competing in the market: TDC, Telenor, Telia, and Hutchison 3. All of them now offer 4G services.

Denmark has a healthy Internet sector. 98 percent of the country is
online, and 78 percent have broadband subscriptions, which
are some of the highest figures in the region. TDC
is the leading broadband provider. TDC recently expanded its fiber-optic network to offer 1G bps service to
approximately 10 percent of the population.

Finland

Finland
has been historically quick to adopt emerging technologies, such as broadband
Internet access and cutting edge wireless technologies, and they have one of the
most advanced telecom markets in Europe as a result.

The
Finnish government has played a huge role in promoting an open and cutting-edge
telecommunications market. The country started deregulating the market in 1985,
more than 10 years earlier than some of its neighbors. Liberalization proved
less problematic than in other Western European markets because some of the
telecommunications operators have always been privately owned. In addition, the
Finnish government has invested large sums to train citizens in the IT fields in
order to supply the country’s insatiable demand for skilled workers in the ICT
industry.

Today,
only nine percent of the population has a landline telephone because so many people use wireless telephones. The
country also has a strong fiber-optic infrastructure; more than 95 percent of
all Finnish municipalities are covered by fiber-optic cables. The dominant
landline carrier is Sonera, which is owned by Telia, Telia, the former monopoly provider of
Sweden. The Finnish government still owns 10.1 percent of the company.

There are 8.1 million mobile subscribers in Finland, a penetration rate of
142 percent. There are three nationwide companies competing in the market:
Sonera, Elisa, and DNA Finland. All three offer GSM, UMTS, HSPA, and LTE
service, but Sonera and DNA also operate LTE-A networks. A fourth company called
Alcom provides service only in the Aland Islands off the coast of the Finnish
mainland.

Finland also has a healthy Internet sector. Ninety three percent of the
population is online, and the Finnish government reports that nearly 100 percent
of everyone under the age of 40 are online. The Internet is so popular there
because Finland has some of the fastest broadband speeds in the world. 38 percent of the population has a broadband connection.

France

The French telecommunications sector is one of the most advanced in the
world, and there is strong competition in every facet of the market. Like most
countries in the European Union, the French market was opened to competition in
1998. Orange is the largest
telecommunications carrier in France and the former state-owned monopoly
provider of all fixed-line services, a sector that has a 58 percent density rate.

The French government started partially
privatizing the company in 1997, and it now owns about 46 percent of the
company. Orange has been facing competition in the fixed-line sector
since the long distance market was deregulated in 1998. Its share of the local and long distance calling
markets continue to slide, but it still operates approximately 77 percent of the
country’s fixed-line market. Orange’s biggest competitor is SFR, a wireless company that
is now owned by Altice Numbericable.

There are four wireless carriers operating in France, and competition is
stiff between them. Orange is the 12th largest wireless provider in the
world and the largest player in the French market. Domestically, the company had
31 million customers, which translates to 38 percent of the market.

Orange leverages strong brand recognition to sell multiple types of service
to consumers and businesses. As the wireless penetration rate approaches
saturation in France, Orange is increasing its focus on large enterprise
customers as a way to improve revenues. Orange markets its services to business
customers by emphasizing its international coverage and improving mobile
productivity for end users. The company has contracts with several multinational
corporations, including 66 percent of the 100 largest companies in the world.

SFR is the second largest wireless carrier in France, with 22 million
customers and a market share of 29 percent. The company's current strategy is
built around convergence, particularly mobile data services. The company's 3G
network covers 92 percent of the population, and its 4G network covers 27
percent. It was also the first carrier in France to start experimenting with LTE-Advanced technology.

Bouygues Telecom is the third carrier in France, with 12 million customers
and a market share of 14 percent. The company has a disadvantage when compared
to Orange and SFR, since both companies have access to fixed-line operations,
which they can leverage to offer service bundles. Bouygues attempts to offset
this hole by focusing on its 4G network. The company currently operates the
largest next-generation network in France, with 36 percent of its customers
using 4G. It is also offers 4G+ service in Paris, Lyon, and Chartes. This faster
service is twice as fast as 4G.

Free Mobile is the newest player in the French wireless market, having
launched service in 2012. Its 3G network covers about 75 percent of the French
population, and it has a roaming agreement with Orange to provide nationwide
coverage in areas it does not service, although this agreement is ending in
2020. Free Mobile also has one of the country’s four 4G networks, which reaches
26 percent of the country.

The French broadband market continues to grow rapidly. Broadband service is now
available to 99 percent of the country and there were 26.9 million broadband
connections at the end of 2016. The market for ultra-fast broadband is also
starting to develop. According to ARCEP, 4.3 million people now sign up for
superfast broadband, which are services that offer speeds of at least 30M
bps, and the country's fiber-to-the-home networks reach 5.6 million people.

The leading broadband provider are Orange, SFT, and Bouygues Telecom.

Germany

Germany has the largest telecommunications market in Europe. According to the
most recent information compiled by the International Telecommunications Union
(ITU), Germany had about 485 million fixed lines in service at the end of 2014.
This places the overall fixed-line teledensity at about 55 percent, which is
higher than Spain, Italy, and the United States.

Germany’s telecom market is regulated by an organization called
Bundesnetzagentur (The Federal Network Agency for Electricity, Gas,
Telecommunications, Post and Railway). It was created in 2005 when the
government expanded the role of the former regulatory agency, RegTP, to include
train transportation, electric and gas utilities, postal services and Internet
services. The European Union also has a large influence in telecom policy.

Telekom Deutschland was created in 2010 when Deutsche Telekom merged T-Home
and T-Mobile into a single group. It is the largest landline carrier in Europe
and the leading provider of local and long distance services in Germany. The
company got its start as a government-owned monopoly, but competitors have been
gradually eating away at its market share since they were allowed into the
market in 1998. In fact, revenues from the all of Deutsche Telekom's domestic
operations have dropped about 25 percent over the last six years.

Deutsche Telekom's largest competitor in the local and long distance market
is Vodafone, which entered the market when it acquired Arcor in 2000 to get a
foothold in the German mobile market. The global wireless service provider
originally expected to shed the company's fixed-line assets, but it changed its
mind in 2006 after recognizing a strategic opportunity to compete directly with
Deutsche Telekom. Arcor has an advantage over other competitors because it
operates its own nationwide IDSN network. It uses this network to offer VoIP
service, meaning it does not have to purchase wholesale PSTN access from
Deutsche Telekom. The company has about 800,000 ISDN subscribers and 2.5
million DSL customers.

In late 2013, Vodafone acquired Kable Deutschland, the largest cable company
in Germany, for $10.3 billion. It now uses those assets to offer service bundles
that combine television and DSL broadband service.

Wireless
services were first introduced in Germany in 1985, when Deutsche Bundespost, the
PTT predecessor of Deutsche Telekom, began offering analog service under the
brand name C-Tel. The first digital GSM network was activated in 1992. Today,
Germany has a healthy wireless sector. The country has about 101.5 million
subscribers, which places the overall penetration rate at 15 percent, and there
are three companies providing nationwide service.

Telefonica Deutschland was formed when Telefonica acquired E-Plus for 8.6
billion euros. The combined company is the largest in Germany, with 48 million
customers and 38 percent of the market. The company offers its service through
O2's nearly 1,000 retail locations across the country as well as through partnerships
with a series of retailers and other businesses, most notably Kabel Deutschland,
one of Germany's largest cable operators. The combined company offers 3G and 4G
service across the country.

Telekom Deutschland, the wireless division of Deutsche Telekom, is now the
second largest mobile carrier in Germany with 42 million subscribers and 35
percent of the market. Telekom Deutschland also views mobile data services as a
key growth driver. The company is the largest operator of Wi-Fi hotspots in the
world, and it has over 8600 of them in Germany alone. The company already operates a
wireless broadband network that uses UMTS and HSDPA technologies supporting
download speeds in excess of 5Mbps. It also has an EDGE network in areas where there is
no UMTS/HSDPA coverage. 4G LTE service is available in all 16 federal states,
which was the coverage requirement issuedby the government when the company won
its operating license. The company is currently upgrading its 4G network to
support speeds of up to 150M bps.

Vodafone is the third largest wireless carrier in Germany and the second
largest in the world. Domestically, it has 30 million customers and 27 percent
of the market. The company is fighting competing with Telekom Deutschland by
offering service bundles that combine wireless service with fixed-line calling
and broadband Internet access from its Arcor business, although it is placing
less emphasis on its fixed-line business.

The market for Internet services in Germany has been explosive. 90 percent of the population is online and
41 percent has an Internet connection.
The leading ISPs are Deutsche Telekom, United Internet, Vodafone, and Telefonica
Deutschland.

Greece

The
Greek telecommunications sector is not as advanced as part of its neighbors.
While 58 percent of the population has a landline telephone, the National Telecommunications and Post
Commission (EEET), the country’s regulatory agency, has been criticized for not
doing everything in its power to truly promote an open market. The former
monopoly service provider, the Hellenic Telecommunications Organization (OTE),
first started facing competition in 1998, but competitors have long complained
about high interconnection rates and long waits to connect to the company’s
network. In August 2008, Deutsche Telekom acquired 25 percent plus one voting
share of OTE for 3.2 billion euros, giving the German telecom carrier managerial
control over OTE. OTE's biggest competitors are Vivodi Telecom and Q-Telecom.

With a poor fixed-line infrastructure, wireless technologies have helped
bring basic telephone service to the people of Greece. The country has about
12.9 million mobile customers, a penetration rate of 115 percent. There are
three companies competing in the Greek mobile market: Cosmote, Vodafone, and
Wind. All three companies have networks built on the GSM standard and offer
LTE-A services. OTE is attempting to remedy the poor infrastructure, however, by
investing $1.6 billion between 2013 and 2017 to upgrade its network.

Greece
has one of the worst Internet sectors in Western Europe, and the regulatory
landscape is to blame. Broadband access was not available until 2003, and consumers complained that OTE
deliberately resisted rolling out DSL so it could continue to gouge customers on
dial-up prices. These factors have resulted in very low subscriber rates
in the region. Only 67 percent of the population uses the Internet and the
broadband density rate is 33 percent. OTE is the
leading Internet provider.

In
order to help further the availability of broadband services in Greece, the
government invested 2.1 billion euros between 2009 and 2016 to bring direct
fiber access to two million homes across the country. This
project provided up to 100M bps of bandwidth to Athens and approximately 50
other major markets. In addition to government investment, Wind and Vodafone
agreed in 2016 that they will work together on building out fiber-optic
infrastructure.

Iceland

Iceland has 185,000 fixed lines for a teledensity of 55
percent. The fixed-line infrastructure is adequate for domestic service: it is composed
of coaxial and fiber-optic cables and microwave radio relay links. The island
nation is also connected to mainland Europe and Canada through the CANTAT-3 and
FARICE-1 submarine networks.

The country’s
regulatory policy is enacted and enforced by the Post and Telecom
Administration. Iceland’s legacy telecommunications carrier, Siminn, is still the leading provider in
most sectors, and the only real competition for fixed-line services is HIVE, an
ISP that is rolling out VoIP services. Interestingly enough,

Iceland does not have area codes, and people are listed in the telephone directory by
their first name because of the unique naming system used there.

Iceland
has 412,000
wireless subscribers and a mobile density of 130 percent. There are four
companies operating in the country are Siminn, Vodafone, Nova, and IceCell. Nova
and Vodafone have a network sharing agreement to help them reduce operating
costs, and Siminn launched LTE-A service in late 2016.

Iceland has
one of the strongest Internet markets in the world. 98 percent of the
population are Internet users, and there are 205,000 broadband subscribers, a 50
percent penetration rate. High-speed
access is available to about 93 percent of the country and has played a large
role in the country having so many Internet users. Siminn is the leading
Internet service provider, and the other leading
players are Vodafone and Hal.

Ireland

Ireland was
one of the first five countries to adopt the new European Union Communications
Framework in 2003. At the end of 2015, the country had 1.95 million local access
lines, a teledensity of 42 percent, and the infrastructure is highly
digitalized and all operators have been investing in digital network
infrastructure. The market is governed by the Commission for Communications
Regulation (ComReg). The former state-owned monopoly, eir, is now a private
company and has seen its role in the market erode heavily as some of the biggest
carriers in the United Kingdom entered the sector once it was deregulated. The
incumbent now faces stiff
competition from NTL and BT Ireland, which was acquired by Vodafone Ireland in
2009.

Ireland has a
thriving mobile sector, with 4.9 million customers and a penetration rate of 114
percent. There are three companies competing in the market: Vodafone, 3, and
Meteor. All of them offer 4G services.

Ireland has about 1.3 million broadband subscribers, a 34 percent penetration
rate Some of the leading ISPs
are eircom.net and BT Ireland. eir is investing $209 million between 2016 and
2018 to bring broadband service to 300,000 homes in rural parts of the country.

Italy

According to the most recent information compiled
by the International Telecommunications Union (ITU), there are about 21 million
local access lines in Italy, which puts the fixed-line penetration rate at
around 35 percent. The fixed-line penetration rate trails most of the Western
European nations, and this statistic has been generally declining as wireless
services continue to grow.

The Communications Regulatory Authority (AGCOM), the national regulatory
authority established in 1997, played an active role in opening the market up to
competition prior to European Union requirements. In March 2000, AGCOM adopted
the decision on the unbundling of the local loop that required physical
unbundling of both copper pair and fiber, and collocation. The national
regulatory authority has focused on active liberalization of the
telecommunications market rather than mere deregulation.

Telecom Italia is largest provider of local and long distance services in
Italy, although its market share and total revenue has been gradually
decreasing. At the end of 2015, the company owned 57 percent of Italy' local
access lines.

Like most incumbent service providers in Europe, Telecom Italia got its start
as a government-owned monopoly, meaning it owns the country's copper
infrastructure. Its recent history, however, differs than many of its neighbors
because it has gone through several ownership changes, including an ugly hostile
takeover by Olivetti. That company eventually sold Telecom Italia to a
consortium of companies led by Telefonica of Spain, but that partnership was
eventually dissolved. Today, Vivendi is the largest shareholder with 24.9
percent.

Telecom Italia has long been plagued with heavy debt. To help push investment
back into the company, Agcom, the Italian regulatory agency, has been working on
a plan that would restructure Telecom Italia into two separate groups – a
service provider and a separate division that manages the company's fixed-line
infrastructure. The network management group would then be forced to sell
wholesale network access to Telecom Italia under the same terms as it does to
reseller competitors. The government also hopes this deal would force the
company to team up with its competitors to jointly invest in upgrading its
network. However, Telecom Italia's executive team and the Italian government
agree that market conditions are not right for this type of move at this time.

As these negotiations continue, Telecom Italia has proactively reorganized by
separating its network operations from the rest of its business, creating a
network management group called Open Access – a restructuring move that is very
similar to a strategy taken by BT Group in the UK.

Additionally, the company invested 6.5 billion euros between 2000 and 2010
to build out a next-generation network that provides high-definition television
and broadband Internet access to 99 percent of the people living in Italy. This
network covers 60,000km and connects more than 1,100 cities. It invested another 2.9 billion euros between 2015 and 2017 to expand its fiber-optic
network to 75 percent of the population.

Other players in the fixed-line market are Wind, FastWeb, and Vodafone.

The wireless sector has been a long-time strength of the Italian
telecommunications market, and the density rate is 163 percent. There are four
players competing in the market: Telecom Italia Moble, Vodafone, Wind, and 3.

Italy's Internet sector has been marked by rapid expansion in the number of
subscribers and types of services available. At the end of 2016, Italy had 16.7
million broadband subscribers – a penetration rate of 39 percent. In July 2014,
the European Commission issued a report saying that Italy had the poorest
broadband density in the European Union; less than 20 percent of the population
has access to connections of at least 30M bps. Although this has improved
somewhat since then, the country still lags behind many other members of this
list.

The major broadband providers are Telecom Italia, Wind, and Fastweb.

Liechtenstein

This tiny country has a reasonably well advanced telecommunications system.
In 2015, Liechtenstein had about 18,000 main line telephones, putting the landline
penetration rate at 48 percent. The country has installed an automatic telephone
system, and it shares some infrastructure resources with Switzerland.
Liechtenstein Telekom remains the main telecom in the country.

Liechtenstein
has about 53,000 mobile customers, and the penetration rate is around 126 percent.
There are three companies operating in the country: Telecom Liechtenstein, Salt,
and Swisscom. All three companies have built their networks on GSM
standards and offer 4G services.

According to the most recently available data, 98 percent of
the population is online and the broadband penetration rate is 44 percent.

Luxembourg

Luxembourg
has a highly developed, completely automated, and efficient telecommunications
system. The infrastructure is mainly buried cables. Luxembourg has about 277,000
main line phones, a landline teledensity of 52 percent.
The market is regulated by Institut Luxembourgeois de Regulation, and the
incumbent service provider is Entreprise des Postes et Telecommunications.

Luxembourg has 892,850 mobile customers, and the penetration rate is around
154 percent. There are four companies operating in the country: POST, Tango,
Orange, and LOL Mobile .The first three offer 4G service, while LOL Mobile
offers service over a UMTS and HSDPA network.

According to
the most recently available data, Luxembourg had 14,500 broadband subscribers
at the end of 2013, a penetration rate of 40 percent.

Monaco

Monaco has a population of about 39,780 and a fixed-line teledensity of
135 percent, which is one of the highest in the world. The
telecommunications infrastructure is advanced, with a mix of copper and
fiber-optic cables, satellite connections, and underwater cables.

Monaco
Telecom is the exclusive provider of telecommunications services until 2023. The
company is owned by the Principality of Monaco (45 percent) and Cable &
Wireless (55 percent). Cable & Wireless is working with the incumbent
provider in an effort to forge ahead as a European player in Internet,
multimedia, and telecommunications services.

Monaco had 52,000 wireless customers, which is an 124 percent density. Monaco Telecom is the only provider, but it was one
of the first carriers in Europe to offer third-generation wireless services over
a UMTS network. It also offers 4G service.

According to data published by the ITU, 97 percent of the population is
online and 55 percent of the country subscribers to broadband service. Monaco
Interactive, the ISP division of Monaco Telecom, is the leading Internet service
provider.

Netherlands

The Netherlands has a developed telecommunications sector.
There are just under seven million
local access lines, for a penetration rate of 40 percent. OPTA, the Dutch
communications regulator, has worked diligently to promote an open market. As a
result, communications has increased significantly, prices have dropped, and
subscription rates for services like broadband have soared. Competition has been
so fierce that KPN, the incumbent service provider, sued the Dutch government
after alleging that the regulatory environment unfairly favors cable companies.
Under the current policy, cable companies are provided with access to KPN’s
copper infrastructure so they can offer DSL services, but KPN cannot access the
cable operators’ coaxial networks.

According to the most recently available information from the International
Telecommunications Union, The Netherlands had 22.7 million wireless customers at
the end of 2016, which put the penetration rate at 139 percent. The country's
four wireless carriers are KPN, Vodafone, T-Mobile, and Tele2. All four use GSM
technologies and offer 4G services, but T-Mobile is planning on shutting down
its GSM network by 2020 to focus on next-generation technologies.

The Internet market is healthy, as
98 percent of the population is online and 48 percent has a broadband
connection. Most
parts of the country has access to both cable or DSL Internet access, and
next-generation technologies like ADSL2+ and direct fiber are becoming more
available.

Norway

Norway has a fixed-line density rate of 17 percent, which is the second
lowest in Western Europe. While the Norwegian market was deregulated in 1998, the government
still owns 54 percent of Telenor, the formerly monopoly provider, although the
government announced in June 2014 that it is interested in lowering its stake. Telenor
still controls most of the country's copper infrastructure, so competitors are
forced to lease capacity. The main
competitor in the fixed telephony market is Tele2.

As Norwegians abandon their landlines, the wireless market has continued to
grow. There are now 6.4 million mobile subscribers, a penetration rate of 122 percent.
There are now three companies competing in Norway: Telenor, Telia, and Ice.net.
Telenor and Telia use GSM and LTE technologies, while Ice.net only operates a 4G
network.

Norway has just over
two million broadband subscribers, a 43 percent density rate, and 98 percent of
the population is online. The two leading
broadband providers are Telenor and Telia.

Portugal

Portugal has a state-of-the-art telecommunications network, and the number of
fixed lines in operation has actually been growing over the last several years,
while most other countries are seeing a decline. There are now 4.7 million lines
in operation there, which means 46 percent of the population has a connection. The fixed-line market was not liberalized until 2000, after the
European Union granted Portugal an extension to comply with regulatory
guidelines. Autoridade Nacional de Comunicaes (ANACOM) is the regulatory authority for
telecommunications and postal communications, in accordance with the base laws
in these areas. ANACOM covers both telecommunications and postal services. In
each it is responsible for granting operation licenses, creating conditions for
development of competition and supervising fulfillment of those conditions.

The former monopoly service provider, PT Group, is now a privatized entity,
but it still has holds more than three quarters of the market in terms of
revenues. The company faces competitions from several different areas, including
resellers, facilities-based providers, and cable operators, but the company has
run into recent trouble for failing to comply with the liberalized telecom
policies. In October 2013, PT announced plans to merge with a Brazilian telecom
company called Oi, but the Brazilian carrier flipped the company to Altice in
2015 to help pay down a massive debt load.

Portugal has a healthy mobile market, with 13.2 million wireless customers and an overall
density of 123 percent. Customers can chose from service from MEO (owned by
Portugal Telecom), Vodafone, and NOS. All three use GSM and offer 4G services.

Portugal has one of the lower Internet penetration rates in the region. At
the end of 2015, 72 percent of the population were online and 35 percent had a
broadband connection. According to data reported by the European Union, PT Group
is the leading provider and has one of the highest market shares for an
incumbent service provider in the region. To its credit, however, the Portuguese
government has been working to promote competition in the broadband sector and
the number of unbundled local access lines has increased greatly. In order to
expand the reach of broadband services in Portugal, PT Group built out a
direct-fiber access that now reaches a million homes.

San Marino

San Marino is one of the smallest countries in the world, covering just 61 square
kilometers. The country is not technically part of the European Union, but it is
allowed to use the Euro as its currency.

Telecom
Italia San Marino was the monopoly service provider of fixed-line services until
September 2006. The only other competitor is San Marino Telecom. The
country has 16,500 local access lines for a penetration rate of 52 percent.

San Marino
has about 38,600 mobile customers, according to the ITU, which puts the
penetration rate at 137 percent. The people of San Marino can subscribe to
wireless services from TMS, Telecom Italia Mobile, and Prima.

At the end of 2015, 83 percent of the people had an Internet connection, with
just over half of those qualifying as broadband.

Spain

Spain was one of the
last countries in
Western Europe to deregulate its telecommunications industry. As a result, competitors have
had less time to do battle with the former monopoly service provider, Telefonica,
and the incumbent is still the dominant provider of local calling, long
distance, wireless services, and Internet access. Telefonica is the former
monopoly provider of all fixed-line services in

Spain and the hands-down leader in every sector of the telecommunications market. It
is also the largest company in Spain.

As of December 2016, Spain has a fixed-line teledensity of approximately 41
percent, with 19.2 million residential and business lines installed, including
copper, fiber-optics, and coaxial connections. The leading provider is Telefonica, the second largest telecommunications carrier in Europe and the
largest company in Spain. According to information published by Spain's telecom
regulator, Telefonica owns 52 percent of the market for landline telephone
service, with about 10 million lines in operation. Competitors have been able
to nibble away some of the company's market share, but the closest competitor in
the local market is Vodafone, which has about 21 percent of the market. Because Telefonica is the only Spanish telecom operator with a nationwide fixed
telephone network, all other organizations wanting to offer services must
purchase broadband access products from Telefonica.

At the end of 2015, Spain had 60.1 million mobile customers, a density rate of
127 percent. The country's wireless providers are Movistar (Telefonica),
Vodafone, Orange, and Yoigo.

The Spanish broadband sector got off to a late start because the country was one
of the last in the European Union to deregulate its telecom industry, but the
demand for high-speed access has now begun to soar. 83 percent of Spain’s
population is online, but only 33 percent have so far joined the growing number
of broadband users.

Sweden

Sweden has benefited from being one of the first countries in Western Europe to deregulate its telecommunications industry. The market was liberalized in
1993, several years before European Union mandates ended telecom monopolies in
most parts of the region. Today, Sweden now enjoys one of the highest teledensities and broadband subscription rates in
the world.

Sweden has 3.5 local access lines and a fixed-line teledensity of
40 percent. The
telephone system has been described as top-notch, both in terms of its domestic
and international facilities. Telia, a company formed by the merger of the
incumbent service providers of Sweden in Finland, is still the leading player in
the market, but the Swedish market is competitive thanks to the aggressive
liberalization.

Sweden has 12.8
million wireless customers and a teledensity rate of 137 percent. There are four
carriers competing in the market: Telia, Tele2, Telenor, and 3. All four of them
provide 3G and 4G services.

Sweden has one of the most robust Internet markets in the
European Union. According to the International Telecommunications Union, 95
percent of the population uses the Internet and 38 percent have broadband
connections.

The Swedish government has played an active role in promoting
broadband, having invested close to $1 billion on broadband expansion throughout
the country with the condition that commercial players match the investment. The
country’s aggressive stance on liberalization has had a huge effect on the
broadband sector. Telia, the incumbent landline provider, has just 20
percent of the market.

Sweden
has also seen an increasing market for super-broadband, which is defined by the
European Competitive Telecommunications Association as a broadband connection
exceeding 10M bps. Ten percent of the Swedish population subscribe to these
services, by far the largest percentage in Europe.

To offset its small role in the broadband market, Telia invested $1.25 billion between 2014 and 2017 to bring fiber-optic
connections to 1.9 million people (about 42 percent of the population).

Switzerland

The Swiss
Federal Office of Communications (OFCOM) has kept the country’s
telecommunications policies in line with European Union directives, even through
Switzerland is not a member of the EU. At the end of 2013, the neutral country
had about 4.0 million local access lines and a teledensity of 48 percent, a
figure that has been dropping quickly and steadily.

Switzerland
has 11.2 million wireless customers and a density rate of
139 percent. There are three companies competing in the country, and the clear
leader is Swisscom. The other two players are Sunrise and Salt, which used to be
owned by Orange.

95 percent of the Swiss population uses the Internet and 52 percent
has a broadband connection.

United
Kingdom

The UK has an advanced
telecommunications infrastructure. All of the country's communications circuits
are digital, and several companies operate nationwide fiber-optic backbones. At
the end of 2016, there were about 32.2 million local access lines in operation
in the UK. The fixed-line teledensity is 53 percent, which is high compared to
some of the other nations in Western Europe.

BT Group is the former state-owned telecommunications provider, and it
provides service to 10 million consumers and one million businesses. It is still
the largest player in the market, but competitors have made remarkable strides
in the United Kingdom. Today, 86 percent of the population lives in an area
where there is a competitor reselling unbundled local loop access, and their
presence has resulted in BT's market share falling to 38 percent. This is a
steep decline from 2007, when BT Group had 69 percent of the market. .

Virgin Media is the largest cable operator in the UK and a major player in
the fixed-line telecommunications market, with 4.0 million residential telephone
customers. The company, which was formed by the merger between NTL and Telewest
Global, was the first carrier in the country to offer service bundles that
combine fixed-line and mobile telephone service, broadband Internet access, and
cable television, which is also known as "quad-play bundles". Today, 84 percent
of their customers subscribe to more than one service and 66 percent are signed
up for at least three services. It has a competitive advantage over Cable &
Wireless and other fixed-line carriers in that it does not have to lease
capacity from BT in order to deliver local and long distance telephone service.

Vodafone entered the fixed-line market when it acquired the UK operations of
Cable & Wireless in April 2013. Cable & Wireless had been around since the 1860s
and was one of the first companies to compete directly with BT, but in recent
years it had shifted its focus to large businesses, other telecom carriers, and
government agencies. The acquisition was a major shift for Vodafone since it
puts the company in the UK fixed-line market for the first time, and gives them
another potential market to help offset their competitive third-place ranking in
the competitive mobile market.

The UK has a very competitive wireless sector with a density rate of 126
percent. There are four carriers competing in the country, and three of the five
largest mobile providers in the world operate here. They are EE, O2, Vodafone,
and 3.

The United Kingdom has a robust Internet sector. According to the most recent
data published by the International Telecommunications Union, the United Kingdom
had 26.1 million broadband Internet subscribers at the end of 2015, which is 41
percent of the population. The country's service providers have done an
excellent job building out their infrastructure and making broadband largely
ubiquitous. According to data compiled by Ofcom, 99.6 percent of the country is
connected to a local exchange that is capable of providing DSL service, and 49
percent of the population is covered by Virgin Media's cable network. As such,
95 percent of the country uses the Internet.

The leading provides are BT Group, Virgin Media, BSkyB, and TalkTalk.

While the UK’s "Brexit" vote means that the country will, barring any reversals,
be departing the European Union, the impact this will have on its telecom
infrastructure remains unknown. The planning of the actual exit process is only
in its earliest days. In the meantime, the UK remains a member of the EU.

Market
Leaders

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There
are a handful of carriers who are the market leaders. Most of these are
the former PTTs in the leading nations in Western Europe. Some of the key
players in the region include:

BT Group

BT Group is the former state-owned telecommunications provider, and it
provides service to 10 million consumers and one million businesses. It is still
the largest player in the market, but competitors have made remarkable strides
in the United Kingdom. Today, 86 percent of the population lives in an area
where there is a competitor reselling unbundled local loop access, and their
presence has resulted in BT’s market share falling to 38 percent. This is a
steep decline from 2007, when BT Group had 69 percent of the market.

To offset its declining business, the company is invested millions of
dollars in a massive build-out of a fiber-optic network that covers two thirds of all homes and businesses in the country. Today,
that network covers about 15 million homes and businesses, and the company
estimates that 80 percent of all broadband subscribers are connected to the BT
network.

BT has restructured itself several times over the years, and it is currently
organized into for business units:

• BT Retail – BT Retail provides service to businesses and
  consumers in the United Kingdom.
• BT Wholesale – BT Group also has a sizable wholesale
  business with more than 1,000 customers.
• BT Global Services – This group provides telecom service to
  7,000 businesses in 170 countries, including 64 percent of the
  Fortune 500.
• Openreach – Openreach operates BT Group's network
  infrastructure, including the local access network and the
  fiber-optic network it is building out.

BT also acquired EE in 2016.

BT Group operates most of the last-mile infrastructure in the UK, which it
uses to offer DSL services. It is the largest broadband provider in the country,
with 32 percent of the market. High-speed broadband is a major part of the
company's business strategy, and it has invested heavily in a nationwide
fiber-optic network that provides direct-fiber access to two thirds of the
country.

In 2016, Openreach, BT's infrastructure operations, announced plans to bring
very fast broadband service to one million businesses by 2020. This service will
deliver connections of up to 1G bps.

Deutsche Telekom / Telekom Deutschland

Telekom Deutschland was created in 2010 when Deutsche Telekom merged T-Home
and T-Mobile into a single group. It is the largest landline carrier in
Europe and the leading provider of local and long distance services in
Germany. The company got its start as a government-owned monopoly, but
competitors have been gradually eating away at its market share since they
were allowed into the market in 1998.

Deutsche Telekom recognizes that the lines between various communications
delivery platforms continue to be blurred as people access the Internet from
their telephones, watch television over their computers, and more. The company's
focus on converging technologies is also evident in its two-pronged growth
strategy designed to offset declining revenues in its home territory. First, the
company seeks to continue to grow its international presence organically and
through acquisition. Secondly, it is aggressively marketing creative new
services and bundles in Germany that combine telephone service with broadband
Internet access, IP television, and/or mobile calling.

For example, it offers a package of fixed and mobile calling, television, and
broadband Internet called Magenta One. The company expects to have three million
subscribers by the end of 2018. Another example is a package called MagentaHome Hybrid that
combines broadband DSL with LTE mobile service. This service first tries to
connect to the company's DSL network then switches over to LTE if the network is
congested.

The company is also looking beyond the PSTN toward next-generation networks
and the services that can be offered over them. A core part of this strategy is
the company's plan to build out a pan-European IP network by the end of 2018. This project
has been a serious point of contention in the international telecommunications
community since the German government ruled that the company does not have to
open to resellers.

In the mobile market, Telekom Deutschland is the second largest player. The
company already operates a wireless broadband network that uses UMTS and HSDPA
technologies supporting download speeds of 3.6M bps. It also has an EDGE network
in areas where there is no UMTS/HSDPA coverage. 4G LTE service is available in
all 16 federal states, which was the coverage requirement issued by the
government when the company won its operating license. The company is currently
upgrading its 4G network to support speeds of up to 150M bps.

Deutsche Telekom is also the largest Internet service provider in Europe and
Germany. Domestically, it has 42 percent of the market and the number one
position in that sector. The company sees DSL service is a key part of its
strategy to offset declining revenues from its local and long distance services
in Germany, especially as the population continues to abandon ISDN connections
in favor of true broadband. As such, the company has been aggressively building
out its infrastructure. Its DSL network now covers 96 percent of the population,
and it offers faster ADSL2+ in 1,000 markets and VDSL service in 50.

DT is also aggressively building out a fiber-optic network to keep pace with
increasing demand for faster broadband service. It had 4.5 million fiber
customers at the end of the third quarter of 2017.

Orange

Previously known as France Telecom, Orange is the
largest telecommunications carrier in France, with 41 billion euros in revenue
in 2016 and a market-leading position in every part of the market. It is also a
very strong player throughout Europe, with operations in France, Armenia,
Belgium, Luxemburg, Moldova, Poland, Romania, Slovakia Spain, and the United
Kingdom. Domestically, Orange has been facing competition in the fixed-line
sector since the long distance market was deregulated in 1998. Its share of the
local and long distance calling markets continue to slide, but it still operates
approximately 45 percent of the country's local access lines.

In 2014, the company announced a new strategic plan called Essentials 2020
that is focused on the following initiatives:

• Offer richer connectivity. Orange plans to
  invest 15 billion euros between 2015 and 2018 to triple the
  average data speeds of its broadband and mobile networks around
  the world. In France, the company will triple its investment in
  fiber-optic Internet services by 2020 and increase the number of
  homes that are connected to the service to 12 million in 2018
  and 20 million in 2022.
  As part of this initiative, Orange began shutting
  down the country's copper infrastructure in 2017 and is migrating all
  customers over to its IP networks.

• Reinvent the customer relationship. Orange
  wants to improve the experience it delivers for its customers.
  They hope to have half of all
  European customer interactions take place in digital channels by
  2018.

• Building a people-oriented and digital employer
  model. Orange wants to have 90 percent of their
  employees recommend the company as a great place to work. As
  part of this goal, they want to deliver 50 percent of all
  employee training through digital channels by 2018, introduce
  new tools for employee collaboration, and encourage more
  employees to buy stock in the company.

• Accompanying the transformation of enterprise
  customers. Enterprise customers are a huge revenue
  generator, but Orange wants to increase its revenues from IT
  services by 10 percentage points by 2020. To do this, they are
  focusing on collaboration and mobile tools, cloud solutions,
  security services, and Internet-connectivity.

• Diversifying by capitalizing on assets.
  Orange is concentrating on the Internet of Things and mobile
  financial services as two key growth markets.

 In the mobile sector, Orange is the 10th largest wireless provider in
the world and the largest player in the French market. Domestically, the company
had 32 million customers, which translates to 39 percent of the market.
Globally, Orange has 194million customers around the world, with operations
throughout the Caribbean, Europe, Africa, and the Middle East.

Orange leverages strong brand recognition to sell multiple types of service
to consumers and businesses. As the wireless penetration rate approaches
saturation in France, Orange is increasing its focus on large enterprise
customers as a way to improve revenues. Orange markets its services to business
customers by emphasizing its international coverage and improving mobile
productivity for end users. The company has contracts with several multinational
corporations, including 65 percent of the 100 largest companies in the world.

Lastly, Orange is the largest provider of ADSL broadband in Europe and is the
largest ISP in France. The company had 11.2 million customers at the end of the
first half of 2017, which gives it 40 of the broadband market. Orange is also
upgrading its infrastructure to support direct fiber-to-the-home broadband,
which will offer speeds of up to 100M bps. It now has about 1.2 million of these
customers.

Telefonica

Telefonica is the former monopoly provider of all fixed-line services in
Spain and the hands-down leader in every sector of the telecommunications
market. It is also the largest company in Spain. According to data compiled by
CMT, Telefonica owns 58 percent of the market for landline telephone service,
with about 11.3 million lines in operation . Competitors have been able to
nibble away some of the company's market share, but the closest competitor in
the local market is Grupo Ono (which has since been acquired by Vodafone) with
approximately 2.48 million fixed lines in service (12 percent of the
market). Because Telefonica is the only Spanish telecom operator with a
nationwide fixed telephone network, all other organizations wanting to offer
services must purchase broadband access products from Telefonica.

Telefonica has countered any encroaching competition by reducing prices,
offering perks like free voice mail, and rolling out service bundles that
include wireless calling and broadband Internet access. For example, Telefonica
now offers a package called Family ONE that lets customers make calls from one
landline number and four wireless telephone numbers for a flat rate. As a result
of Family ONE and other packages, the company is losing market share in the
fixed-line market, but it is leveraging its powerful brand name and its presence
in other parts of the market to maximize average revenue per user.

Telefonica is also a major player in the global telecom market, with a
presence in 23 countries across the world. It is the one of the largest
telecommunications company in the world in terms of number of customers, with
328 million customers around the world. It is also one of the largest in the
world in terms of market cap value. Most of the country's international
operations are focused on countries with large populations who speak Spanish or
Portuguese, including Mexico, Guatemala, Columbia, Morocco, Venezuela, El
Salvador, Nicaragua, Panama, Brazil, Uruguay, Peru, Ecuador, Chile, and
Argentina. Telefonica also has a presence in the Czech Republic, Ireland,
Germany, and the United Kingdom. 

In the wireless market, Telefonica operates under the Movistar brand name.
Movistar currently holds 38 percent of the wireless market in Spain. With fixed
broadband services, Telefonica, under its Terra ISP brand, is the market leader,
with more than 5.6 million subscribers and 45 percent of the broadband market.
The bulk of these customers are using xDSL services and most of the others using
FttH. Terra is the largest ISP in Spain and a major player in several
Spanish-speaking countries, including 16 nations in Latin America. The
modern-day company was founded in 2000 when it acquired Lycos, a popular search
engine and Web portal.

Telefonica has been working to build out its
fiber-optic network. By the end of 2017, its network passed 1.2 million homes,
double the number it passed in 2012. The company sites the fact that fiber
customers have an average revenue per user rate that is almost 1.5 times higher
than its DSL customers as a reason behind the strong investment.

Vodafone Group

Vodafone is the second largest wireless telephone
company in the world, with 427.2 million customers in Europe, the Asia/Pacific,
Africa, the Caribbean, and the Middle East, but it is now the third largest
player in its home territory and its market share has been gradually declining.
In its home market of the UK, it has 11.4 million customers and 23 percent of
the market. Much like BT Group in the fixed-line sector, Vodafone's market share
in the mobile market has been slowly eroding as other carriers build their
marketing strategy around competing directly against it. To counter this,
Vodafone is marketing itself as an innovative service provider who is on the
cutting edge of rolling out new handsets, faster networks, and creative
applications. It also crossed over into the corporate fixed-line market by
purchasing Cable & Wireless.

Germany. In Germany, Vodafone is
the second largest provider of mobile and landline services. The company
is fighting competing with Telekom Deutschland by offering service bundles that
combine wireless service with fixed-line calling and broadband Internet access
from its Arcor business, although it is placing less emphasis on its fixed-line
business. A unique aspect of Vodafone's strategy is the way it is applying cloud
computing to wireless services. The company has been offering a cloud-based
telephone service called Vodafone One Net, where the company will store data and
applications on its own network, which can then be accessed via a mobile phone
or Wi-Fi connection. Vodafone was also the first company in Germany to launch 4G
service over an LTE network, and it's 4G network now covers 70 percent of the
population and serves 891,000 customers.

Spain. Vodafone is now Telefonica’s biggest competitor after
it acquired Groupo ONO, a major cable company, in July 2014 for 7.2 billion
euros. The deal made sense for the cable company because, while it has the
ability to offer local and long-distance calling, cable television services, and
broadband Internet access to 85 percent of the country, but it did not have its
own portfolio of wireless solutions to offer as part of service bundles. As of
the end of 2017, the cable company had just under two million fixed-line
customers in Spain, which gave it 11 percent of the market, and 1.7 million
broadband customers, which is 12 percent of the high-speed market. This
acquisition combined Groupo ONO’s operations with the second largest provider of
wireless services in the Spanish market, where it had about 11.8 million
customers and a market share of 27 percent, as well as 1.5 million fixed line
customers, for an eight percent market share.

Other Leaders

The
following table provides a list of market leaders for each country in Western
Europe:

Market
Trends

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In
general, the telecommunications sector of
Western Europe is healthy. Most markets are still experiencing growth, particularly in
wireless and broadband services. The European Union has been lauded for
developing an overall regulatory framework that ended communications
monopolies and created a level playing field. In a small handful of these
markets, however, national governments have been slow to enforce these
policies, which has stifled growth.

Greece, for example, has not done a good job in pressuring incumbent OTE to
provide fair access to its network. This lack of competition has only hurt
consumers, since

Greece has one of the lower broadband penetration rates in the region.

The liberalized communications markets of Western Europe have allowed a
handful of start-up companies to establish themselves in the region – COLT
Telecom and Tele2, for example, both have operations in several European
countries – but, for the most part, the incumbent service providers are
still the dominant players in their home territories.

Some of the major European carriers saw deregulation as an opportunity to
recoup revenues it may lose in their home territories thanks to
competition by branching out internationally. These companies leveraged
their power financial status to build out infrastructure in other markets
or to acquire other companies. As a result, Europe is now home to some of
the world’s largest telecommunications carriers: BT Group,

Deutsche Telekom,
Orange, and Telefonica. Each of these companies have extensive
international operations, including a presence in multiple European
countries. There are also a group of smaller countries that have been able
to carve out a smaller regional presence. KPN of the
Netherlands, for example, has operations in
Germany and
Belgium, while Telia has a strong presence in the Scandinavian region of
Europe.

Moving
forward, competitors will continue to nibble away at these regional
giants, but they will not have the financial resources to continue to
compete effectively. Tele2, for example, sold off assets in several
European countries due to poor performance. In all likelihood, the
mega-carriers will continue to put distance between themselves and the
rest of the pack.

In order to further level the playing field, the European Commission is
considering creating pan-continental regulator called the European Telecoms
Authority. The European Union calls this matter the "highest
political priority" facing the EU today because there are many issues
that are common to all member states that can be handled differently by
various country regulators. Additionally, the Commission argues that it is
difficult to regulate international telecommunications services when
individual regulatory agencies may have different opinions.

The initial proposal called for the ETA to replace the individual
telecommunications regulators, but that suggestion drew heavy criticism from
several countries, particularly France. The latest proposal being considered
would give each member of the European Union a membership on the ETA, with a
simple majority vote being the deciding factor on issues.

Incumbent service providers across the region are struggling with declining
revenues from their core local and long distance telephone services, while
the wireless and broadband sectors continue to drive growth in the European
market.

Mobile
services are thriving across
Western Europe. Every country except for Andorra has wireless penetration
rates higher than 100 percent. With many of these markets approaching
saturation, carriers are banking on mobile broadband services as a means to
boost average revenue per user. Fourth-generation services are now widely
available and some carriers are already testing 5G services.

Broadband Internet access is another hot topic in Western Europe. The market for
high-speed Internet services has exploded as telecommunications carriers are
rolling out broadband as a way to increase revenues and consumers are eager to
sign up for speedy access. South Korea, which led the world in terms of
broadband penetration for several years, has now slipped to fifth place behind
Switzerland, Denmark, the Netherlands, and France, according to the OECD.

DSL is still the most widespread access technology of choice in almost every country in
Western Europe, but is quickly being usurped in the most developed nations by
the proliferation of fiber-based offerings. Austria, Belgium, the Netherlands,
and Portugal are currently leading the way in the deployment of newer, faster
alternatives to DSL.

Competition
is playing a significant role in the proliferation of broadband services across
the region. The European Union reports that incumbents’ market share of the
broadband sector has declined to 46 percent.

Strategic
Planning Implications

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The
European Union opened the telecommunications market to competition on
January 1, 1998, with the goal of creating a competitive market. In
December 2000, the EU ministers met to grade the progress of the
liberalization, and they found that their efforts had been successful,
although not totally complete. To help propel the process, the
ministers approved regulation to unbundled access to the local loop of the
public telephone network. By unbundling access to the local loop,
competitive providers were finally provided an avenue for controlling
their business relationship with customers and the access they need to
install the profitable technologies to make them even more competitive.
The true test of the EU’s efforts will be measured by how reasonable the
interconnection rates are for alternative providers. Providers are
governed by their individual regulatory, so the actual rates do not always
abide by the recommended levels.

Regulatory
authorities routinely review the progress each country makes in opening
their markets to competition and revise regulations to foster healthy
business, but the levels of competition in voice services varies greatly
around the region. Regulatory authorities contribute to an open market,
but market-led competition furthers the progress. The local agencies have
the biggest impact in following up on problems that arise. 

Not
all Western European countries are members of the European Union. The
following table provides a snapshot of the members. 

Source: European Union

There
are still barriers to entry to most markets in the region, despite growth
across the board. The rates for leased lines vary, but generally remain
expensive. Other major problems are high roaming charges for wireless
calls and varying levels of power held by regulators.

Western Europe, in general,
provides a large and ever expanding area for business investment in the IT
and telecom sectors. It has an advanced infrastructure, liberalized market
structures, and some of the worlds largest economies. It also includes a
number of the world’s largest telephone companies, which have considerable
investments around the world, including the United States
and Asia. Much of the equipment used in these networks is imported, and
the need for sophisticated new technologies continues to evolve. Of
particular interest are the major growth areas of wireless communications,
wireless 4G services and broadband equipment and services.

Web Links

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• Andorra Telecom: http://www.andorratelecom.ad/
• BASE: http://www.base.be/
• Belgacom: http://www.belgacom.com/
• Bouygues Telecom
  BT Group: http://www.bouyguestelecom.fr/
• Deutsche Telekom: http://www.telekom.com/
• DNA Finland: http://www.dna.fi/
• E-Plus: http://www.eplus.gruppe.de/
• eir: http://www.eir.ie/
• Everything Everywhere: http://www.everything-everywhere.com/
• HIVE: http://www.hivetelecom.com/
• IceCell: http://www.icecell.is/
• Liechtenstein Telekom: http://www.telecom.li/
• Mobilstar: http://www.mobilstar.ee/
• Movistar: http://www.movistar.com/
• Nova: http://www.novatelecom.com/
• O2: http://www.o2.co.uk/
• Orange: http://www.orange.com/
• OTE: http://www.ote.gr/
• Prima: http://www.prima.sm/
• Proximus: http://www.proximus.be/
• Q-Telecom: http://www.wind.gr/en/q
• SFR: http://www.sfr.fr/
• Siminn: http://www.siminn.is/
• Swisscom: http://www.swisscom.com
• TDC: http://www.tdc.com/
• Tele2: http://www.tele2.com/
• Telecom Italia: http://www.telecomitalia.com/
• Telefonica: http://www.telefonica.com/
• Telia: http://www.telia.com/
• Telekom Austria: http://www.telekomaustria.com
• Telenet: http://www.telenet.be/
• Telenor: http://www.telenor.com/
• UPC: http://www.libertyglobal.com/
• Virgin Media: http://www.virginmedia.com/
• Vivodi Telecom: http://www.vivodi.gr/
• Vodafone: http://www.vodafone.com/
• Wind: http://www.wind.it/
• Yoigo: http://www.yoigo.com/
• 3: http://www.three.co.uk

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