Boston, MA -- (SBWire) -- 01/09/2013 --BMI View: Switzerland is one of the highest value mobile markets globally, underpinned by high incomes and demand for advanced services. The market retains subscription growth potential relative to other Western European markets. Despite ARPU declines in recent years, and a slowdown in the growth of non-voice revenues, we believe the market also contains potential for value generation in the short and medium term. The launch of LTE, roll-out of FTTH infrastructure and the associated opening of higher VAS markets will help counter price competition in traditional services - although consumer IP substitution is an underlying threat to this view.
Key Data:
- BMI extended our five-year forecasts this quarter for the mobile, mobile ARPU, fixed-line and broadband markets.
- Q113 also saw the implementation of a new Risk/Reward Rating methodology, placing greater emphasis on data services and private final consumption growth. Switzerland's industry rewards score improved, while its country risks score declined. However, it remained in third position in the Western Europe Risk/Reward Ratings table.
- BMI upgraded our blended ARPU forecast for Switzerland on the basis of slower than expected decline in operator ARPUs reported for the three months to the end of June 2012. We now forecast monthly blended ARPU of CHF44.1 in Q412 and CHF40.3 in Q417.
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Key Trends And Developments
In Q212 Swisscom reported total SMS of 694mn, down by 4.9% y-o-y. Meanwhile, BMI calculates that SMS per subscriber declined 8.1% y-o-y. Based on the trends witness in other Western European markets, most notably in the Netherlands, we believe this could represent the beginnings of SMS-IP substitution as subscribers take up services such as WhatsApp. This is a threat directly arising from the proliferation of smartphone ownership and uptake of wireless data services, and will lead to a decline in revenues, although it is not possible to determine the scale of the impact at this time.
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