German Mobile Penetration Rate Reaches 132.2%, T-Mobile Remains Market Leader—Regulator

German telecoms regulator BNA has released market data on the local mobile sector, reporting that as of the third quarter of 2009 there were a total of 108.215 million mobile subscribers in the country. This was 0.9% more than at the end of 2008 and represents a penetration rate of 132.2 per 100 inhabitants, against 130.8% at end-2008. The outgoing traffic from the mobile networks, as of 2008, reached 86.14 billions of minutes, up 23% year-on-year (y/y), with the volume of incoming traffic totalling 71.37 billions of minutes, up 16.7% y/y.

In terms of subscribers, Deutsche Telekom's T-Mobile remains the market leader, controlling 26.3% of all retail clientele, as of the first quarter of 2009. Of the other network operators, it is followed by Vodafone (23.3%), Telefónica O2 (15.4%), and E-Plus (12.5%). At the end of the reported period, the market's MVNOs saw their market decreasing to 22.5% from 23.4% at end-2008.

Outlook and Implications

• Critical Year in German Mobile Market: 2010 is of particularly high importance for the German mobile players, as the BNA will auction off the frequencies in the 800-MHz range, closing the deadline for the expressions of interest on 21 January (see Germany: 22 December 2009: German Mobile Spectrum Auction Back on Track as EU, German Regulator Resolve Differences). In order to have the auction conditions approved by the European Commission (EC), the regulator is committed to complete a market analysis of the sector in three months after the licensing, which may eventually result in some form of frequency distribution between the carriers, with the refarming of the 900-MHz GSM band being the most prominent topic in such action. The auction, as well as the related future investments, may push the two smaller network operators—E-Plus and Telefónica O2—closer to each other, with for instance E-Plus parent KPN's management having indicated that the two units could commence a collaboration to strengthen their positions against T-Mobile and Vodafone (see Germany – Belgium: 20 November 2009: KPN Considers German Co-Operation with Telefónica, Could Sell Belgian Ops—CEO). As regards the market shares that the BNA reports for the operators, they seem to differ a little from those used by some other sources, such as industry group VATM, which normally rank E-Plus above Telefónica O2 (see Germany: 9 November 2009: Revenue from German Telecoms Market to Drop by 3.6% in 2009—Study). We assume that this is mostly due to the fact that a chunk of E-Plus's client is served by units which in the BNA's methodology count technically as MVNOs.