BMI's Executive Summary

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The Sector At A Glance

Key Insights On The Telecomunications Sector of Germany

In the first nine months of 2007, the number of German mobile subscribers grew by 8.9% to reach 93.292mn. BMI estimates that the sector grew by 9.6% for 2007 as whole, which means that 2007 was a stronger year for mobile customer growth than 2006. Likely reasons for the increased subscriber growth in 2007 include the impact on the sector of an increasing number of mobile virtual network operators (MVNOs), as well as the emphasis which major operators such as T-Mobile have placed on prepaid growth; we believe that both of these developments have contributed to the trend towards multiple SIM ownership and to an increasing number of inactive prepaid mobile users.

Ultimately, BMI expects to see new mobile subscriber growth beginning to tail off in the near future, and we predict that market saturation will be accompanied by consolidation in the MVNO market. Although we predict that 2008 will see a 6.4% increase in subscriber numbers, we anticipate a sharp slowdown in customer growth from 2009 onwards. We predict that the number of German mobile subscribers will rise to above 107mn by the end of 2012 (with a penetration rate of 129%). Long-term, the country’s mobile operators will put increasing emphasis on building their more lucrative contract customer base and on promoting and improving the quality of 3G services. We believe that there were around 11.5mn 3G subscribers in Germany at the end of 2007, which is equivalent to 12.2% of the total mobile user base. By 2012, we predict 34mn 3G users, or just less than 32% of total mobile subscribers.

Although Germany's broadband market continues to manifest steady growth, concerns remain about the regulatory protection which the German government has extended to Deutsche Telekom's VDSL network. The government supports the operator's claims that it should not have to share its infrastructure with competitors for a set amount of time. Many believe that the incumbent continues to wield considerable advantage within the country's broadband market. In August 2007, Deutsche Telekom started to offer IPTV services over its ADSL2+ network. Since its introduction in October 2006, the incumbent's IPTV service has only been available over its limited VDSL network. The provision of IPTV over ADSL has significantly increased the telco's geographical coverage, with 17mn households in 750 German cities due to be covered by the ADSL2+ network by the end of 2007, compared with the mere 36 cities to which the VDSL network extended. Meanwhile, in October 2007, one of Deutsche Telekom's largest competitors, Vodafone-owned Arcor, launched its own IPTV package. 'Arcor-Digital TV' was initially made available in 51 towns and cities. Arcor is the third German telco to offer IPTV, following in the footsteps of Deutsche Telekom and Telecom Italia subsidiary HanseNet, which launched its 'Alice IPTV' service in May 2006.

Germany sits in third place in our new set of Business Environment Rankings table for Western Europe. Although the country receives relatively strong scores for country risk and for the state of its telecoms market, its overall score remains compromised by its inadequate regulatory independence.

Contents

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Chapter 1 - Executive Summary

Chapter 2 - Business Environment

West Europe Markets

Germany

Table: Western Europe Business Environment Ranking

Germany Telecommunications Industry SWOT

Chapter 3 - Industry Forecast Scenario

Fixed-Line

Table: Germany Telecoms Sector – Fixed Lines – Historical Data & Forecasts

Internet

Table: Germany Telecoms Sector – Internet – Historical Data & Forecasts

Mobile

Table: Germany Telecoms Sector – Mobile – Historical Data & Forecasts

Chapter 4 - Macro-Economic Climate

First quarter recovery to be boosted by Q206 World Cup effect

Table: Germany - Macroeconomic Forecasts

Chapter 5 - Country Snapshot: Germany Demographic Data

Section 1: Population:

Table: Demographic Indicators (2005)

Table: Rural/Urban Breakdown

Section 2: Education & Healthcare

Table: Education

Table: Healthcare: Vital Statistics

Table: Healthcare: Expenditure

Section 3: Labour Market And Spending Power

Table: Employment Indicators

Table: Consumption and Stratification

Table: Wages per year

Chapter 6 - Competitive Landscape

Table: Key Players: Germany Telecoms Sector

Table: Selected Operators Financial Indicators

Market Overview

Fixed-Line

Table: Regional Fixed-Line Penetration Overview

Internet Overview

Table: Regional Broadband Penetration Overview

Mobile Overview

Table: Regional Mobile Penetration Overview

Market Data

Fixed-Line

Table: German Local Access Market 2005

Broadband

Table: German Broadband Market, Q206

Mobile

Table – German Mobile Market Q206

Table: German Mobile Net Additions, Q206

Table: German Blended ARPUs, 2004-6 (EUR/user/month)

Mobile TV

Chapter 7 - Company Monitor

Regional Case Study: Nokia

Table: Key European Contracts

Selected Profiles – Operators

Deutsche Telekom

T-Mobile International

Vodafone Germany

Chapter 8 - BMI Forecast Modelling

How we generate our industry forecasts

Telecommunications Industry

Sources

Chapter 9 - Appendix: Regional Demographic Data

Wages (ave labour force per annum), US$ PPP

Population

Household Spending Per Capita, US$

Private Consumption Per Capita, US$ PPP

Market Size, GDP, US$bn

Competitive Landscape for Europe Telecommunications Reports: Sample of Companies Ranked

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Commentary on key operators highlighting ownership structures, latest available revenue figures, market share analysis and ARPU counts. BMI forecasts for all headline macroeconomic indicators, including real GDP growth, inflation, fiscal balance, trade balance, current account and external debt. Company SWOTS Covering all leading telecommunications operators and manufacturers operating in each market, including competitive intelligence on geographic presence and competitive positioning against local companies; local market share; leading products, services and technologies; foreign direct investments, projects, merger and acquisition strategies.

Network of European Telecommunications Sources

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BMI's European Telecommunications Reports are based on an extensive network of multilateral organisations, government departments, telecommunications industry associations, chambers of commerce and company reports. Information sources include:.