Triple-play marketing helps grow Dutch fixed-line base in Q4 2014

Houten, The Netherlands, 17 March 2015 – The Dutch fixed telephony market grew by 0.3 percent during the fourth quarter to end 2014 with 6.23 million lines. Despite the quarterly growth, the telephony market was still down 0.3 percent year-on-year, according to Telecompaper’s latest Dutch Fixed Telephony Market report. The quarterly growth was driven by a 1.3 percent increase in consumer VoIP lines to 5.29 million, offsetting the 5.8 percent drop in PSTN/ISDN lines and 4.1 percent decrease in WLR connections.

The growth in VoIP lines during the quarter came from fibre (+6.7%) and DSL (+1.9%) networks, offsetting a 0.4 percent drop in cable VoIP lines. The growth in DSL and fibre VoIP was driven by KPN’s triple-play marketing strategy, which offers fixed telephony “free”, and Vodafone’s nationwide campaign focusing on its fixed network activities. Tele2 also seems to be profiting, with modest quarterly growth since Q1 2014, even without extensive marketing efforts.

“The cable operators have started to lose market share, confirming our analysis that they have reached a saturation point in terms of how many more fixed lines they can sell,” said Kamiel Albrecht, Telecompaper analyst and author of the report. “The decision by UPC and Ziggo to stop offering free on-net calls earlier this year shows they are more focused on growing revenues than the number of connections.” A similar saturation effect is expected to occur for fibre starting in 2015 and DSL starting in 2017. As a result, Telecompaper expects the overall fixed telephony market to show a Compound Annual Growth Rate (CAGR) of -0.7 percent over the five-year period 2015-2019.

Telecompaper’s quarterly report also estimates retail revenues* for the consumer fixed telephony market. These totaled EUR 322 million in the fourth quarter of 2014, down 0.5 percent during the quarter. Over the full year 2014, revenues totaled EUR 1.296 billion, decreasing almost 7 percent compared with 2013. The ‘Dutch Fixed Telephony Market Q4 2014’ report also provides a detailed forecast for revenues, subscriptions and provider and technology market shares for the period through 2019.