The move could be a first step towards consolidation in a fragmented fibre broadband market - the Norwegian regulator tracked over 100 players offering FTTP at YE 2010, many of these being regional energy companies which have expanded into offering broadband services, much like LOS Bynett and Bynett Privat.

These acquisitions will help Telenor boost its limited fibre-to-the-premises (FTTP) service coverage. The telco first launched services over FTTP in 2008, but confirmed in Q1 2010 that this network still passed just 0.05m-0.1m homes. The incumbent is looking to boost its share of the FTTP market, which IHS Screen Digest put at less than 5% at YE 2010. Overall the FTTP market is growing in importance, hitting 0.3m lines at YE 2010, accounting for 15% of the total broadband market.

Telenor provides broadband over DSL, cable and FTTP, yet our research indicates the company has been losing market share for several quarters, slipping from 50.3% in Q1 2010 to 49.4% by year-end 2010.

These two acquisitions support the telco's attempt to curb its market share erosion by upgrading its fixed broadband network to higher-capacity next-generation FTTP (as well as VDSL and DOCSIS 3.0 cable), while increasing takeup and improving the features of its multi-play services:

 

• Telenor launched an IPTV service in Q1 2010 - the service can only be taken in FTTP areas as part of a bundle
• The telco launched VDSL services in Q1 2011, available at launch to 0.4m homes, with the aim of extending IPTV to these homes during 2011
• The ISP has also upgraded its cable network to next-generation DOCSIS 3.0, offering high-speed services through its subsidiary Canal Digital Kabel TV.

 

The intensification of competition in the next-gen market comes as the overall fixed broadband market is nearing saturation, with nearly 74% homes broadband-connected at year-end 2010, according to IHS Screen Digest.