An interesting LTE race is brewing in Slovenia, primarily between Telekom Austria and Telekom Slovenije — or whoever winds up buying a majority stake in the state-owned Telekom Slovenije.
Slovenia was a bit slow off the LTE mark in auctioning off its “digital dividend,” the sub-1GHz spectrum ideal for urban LTE deployment. The country only made it available this year when it auctioned off portions of the 800 MHz and 900 MHz spectrum in April. This delay may have created a pent-up demand, since the two biggest operators have been busily expanding their networks.
As Claudia Bacco noted earlier, Telekom Austria has made a significant investment in LTE expansion in the small Central European country of about 2 million. The company which operates Si.mobil in Slovenia purchased nearly 50% of the available mobile spectrum in April. Telekom Austria’s LTE network now covers 68% of its serving area and should reach more than 90% by the end of the year. It has a goal of reaching 95% population coverage within three years.
Telekom Austria is racing Telekom Slovenije’s Mobitel which is the dominant mobile operator in Slovenia (although a European Commission report noted that its grip was slipping to a little less than 50% of the market in 2013.) Telekom Slovenije also won big in the spectrum auction bringing its spectrum counts close to Telekom Austria’s.
Telekom Slovenije boasts an LTE network covering more than 60% of the population and plans to reach 75% of the population by the end of the year. The operator says it has more than 100,000 users on its LTE/4G mobile network as of June. Not a huge amount, but it’s a good start considering the digital dividend auction happened only two months earlier. (Telekom Austria had only 22,000 “mobile broadband subscribers” according to its first half report for 2014.)
Telekom Slovenije’s LTE efforts may get some extra backing when it goes private. In a privatization effort, the Slovenian government plans to sell off 72.75% of the telecom, hoping to raise €700 million ($878.1 million) and no less than eight investors submitted non-binding bids in July. Showing a high level of interest in expansion to this region. Among the carriers bidding, the leading contender was reportedly Deutsche Telekom over Russia’s MTN and Turkey’s Turkcell.
While the sale was put on hold for the recent elections in Slovenia, it’s expected to move forward soon. If it is the buyer, the giant Deutsche Telekom certainly has the means to give Telekom Austria a run for its LTE money in Slovenia.
Why all the interest in Slovenia? For one, it’s a forward-looking country with a relatively stable economy ever since leaving Yugoslavia in 1991. It joined the European Union and NATO in 2004, and it was the first former communist country to join the Eurozone in 2007.
Slovenians are also highly connected. The country has 2.3 million mobile users, according to Slovenia’s statistics office. (Notice that this number exceeds estimates of the country’s population, implying multiple device contracts per user.) Of households with children in Slovenia, 97% are connected to the Internet; and it’s 70% in households without children.
Nearly three-quarters of those households access the Internet using mobile devices, and those using mobile Internet connections of 3G or higher have increased — from 37% in the first quarter of 2013 to 45% in the same quarter of 2014. It’s no wonder the GSMA classifies Slovenia as a fast grower.
The potential for rapid LTE adoption is there, and obviously the big companies see the opportunity. And there is at least one smaller player worth watching as well. Tus Mobile also won some spectrum in the April auction. It has yet to launch its LTE service, but Tus claims to be the fastest growing operator in the country for the last six years running. Even so, it will be difficult to keep up with the two big dogs in this market.
Either way, keep an eye on Slovenia. It should be an interesting race to watch.
