New Market Report: Belgium Telecommunications Report Q3 2013

Q412 data show that the new Telecoms Law had an immediate impact, allowing many mobile subscribers to change service provider part-way through an existing contract. Churn rates rose appreciably and operators took the opportunity to eliminate inactive SIMs from their records, giving them a better insight into growth opportunities. Multiscreen product bundles appear to be the order of the day, with operators such as Belgacom/Proximus, Mobistar and Telenet keen to enable subscribers to access their complete product ranges anytime, anywhere. This should boost mobile data revenues further still and help justify the considerable expense of building next-generation networks.

Key Data

* Mobile growth was negative in Q412 as BASE shed nearly 1.3mn inactive accounts and new network switching rules introduced in October 2012 prompted a high level of churn for all three operators. This was countered by the launch of lower-priced services and multi-product bundles, but operators' subscriber numbers still fell markedly, impacting on ARPUs. On the bright side, consumption of data services remained strong and as many as 50% of new handsets sold in 2012 were smartphones. This bodes well for operators' investment in 4G networks.
* Meanwhile, M2M usage continues to grow rapidly, based on data provided by Mobistar. Broadband market data supplied by the Internet Services Provider Association (ISPA) suggested sluggish growth in the fixed broadband arena. We await broader market data from the regulator before adjusting our broadband sector forecasts.
* ARPUs continue to fall faster than expected in Q412 owing to higher churn rates. Also, fresh MTR reductions in January 2013 and the arrival of at least one new player later in the year have yet to make their impact felt on ARPUs, which will continue to trend downwards for the foreseeable future.

Full Report Details at
- http://www.fastmr.com/prod/596787_belgium_telecommunications_report_q3_2013.aspx?afid=301

Key Trends & Developments

Proximus, Mobistar and BASE responded to the new rules regarding consumers' ability to switch provider part-way through contracts with aggressively priced services and new multi-product bundles. This helped soften the blow of heightened churn in Q412 and also leaves them in a better position to execute their multiscreen service ambitions. However, BASE continues to underperform in many respects.

Belgium climbed two places on BMI's Risks/Rewards Ratings table this quarter after we took a more bearish view of the opportunities for investment potential in the mobile sector - the elimination of over 1mn inactive SIMs supplies a more realistic view regarding user and ARPU growth. However, Belgium remains susceptible to the ongoing Eurozone debt crisis and it is possible its country risk score could be revised downwards in the months to come.

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