Subscribers: In
the first quarter of 2006, the number of Italian
incumbent retail broadband lines has increased
to 4.958 million while the wholesale lines passed
the 1 million land mark (1.024 million). This
takes the total number of active DSL subscribers
to 5.982 million in Italy. In the meanwhile, through
a combination of organic growth and strategic
acquisitions across Europe; the incumbent has
secured a year on year growth of 159%. This takes
the DSL subscribers to 1.471 million in that period.
The annual
growth of retail DSL subscribers stands at 35.46%
and wholesale active DSL lines at 43.62%. This
trend is represents the greater competition
and openness of the Italian broadband market
which has been traditionally dominated by the
incumbent Telecom Italia.
The Telecom Italia (Alice)
broadband market share at the end of March 2006
was 76.6% while it market share in DSL market
reached 81%.
Revenue:
Broadband revenue for the first quarter
of 2006 ending March 2006 stood at 301 million
Euros, a year-on-year increase of 90 million
Euros or 42.65%. During the same period the
Internet revenue with a year-on-year increase
of 27.8% rose from 295 million Euros to 377
million Euros in Q1 2006. The lower annual growth
rate of Internet revenue in comparison with
Broadband was mainly due to a decrease in narrowband
revenue from 84 million to 76 million since
Q1 2005.
In order to increase its market share, the incumbent
has taken a series of initiative such as the
“One Company Model”, based
on a unified management of fixed and mobile
telephony.
The company has also been offering packages
with the speed of 20Mb in order to compete with
high speed FTTx services offered by FASTWEB
and 24Mb ADSL speed of Tiscali packages.
Price elasticity: According
to the result of our price elasticity analysis
of Telecom Italia retail tariffs for Q1 2005
and Q1 2006; the demand for DSL broadband is
elastic to the change of tariffs as the arc
elasticity ratio is 0.3. In other words, for
every drop in the cost of bandwidth by one Euro
there was a net gain of 27,875 new subscribers
since Q1 2005.
Broadband
packages: The uncapped DSL tariffs
start from 19.95 Euros for a 640Kbps for the
residential market to 113 Euros for a flat rate
package in the business sector.
Q1
2006 Telecom Italia (Alice) packages
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For more information
about this press release or this research brief,
please contact us at
info@quantum-web.com
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tariff research and analysis. It provides broadband
quarterly statistics, pricing analysis, consultancy,
and tailored reports, product of both a deep technological
understanding and a first-rate research methodology.
Quantum-Web uses a variety of econometric models,
statistical techniques and in-depth market behavioral
analysis to provide comprehensive market intelligence
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