The year 2010 saw, in the area of network interconnection, a further wave of consolidation of the Czech telecommunications market. This trend was propelled also by the transfer of a significant portion of the activities of České Radiokomunikace to T-Mobile, which spurred the ADSL broadband internet market. T-Mobile used the metallic cables unbundled by Telefónica O2 to provide the service. On the other hand, another major service provider, VOLNÝ, a.s., commenced a retreat from the residential fixed broadband market.
In the area of fixed public electronic communication networks, particularly GTS Czech, T-Mobile, Dial Telecom and RIO Media pursued acquisitions which resulted in the strengthening of their respective market positions.
Mergers and acquisitions in the electronic communication markets raised the need for changes in the fixed network interconnection between Telefónica O2 and other licensed operators. No changes were implemented in the mobile network interconnection between Telefónica O2 and other mobile service providers.
At the end of 2010, the fixed network of Telefónica O2 was interconnected with sixteen networks operated by other licensed entities. Telefónica O2’s mobile network in the Czech Republic was interconnected with the networks of three other mobile operators and with twelve fixed public electronic communication networks.
The share of customers using the services of other operators relying on the Wholesale Line Rental (WRL) service from Telefónica O2 saw an increase in 2010. Carrier Selection/Carrier Pre-selection (CS/CPS), on the other hand, gradually lost importance as the number of subscribers stabilised and no major fluctuations in the numbers of activations occurred.
National wholesale services
The trend, which in the area of national wholesale was evident already in the previous year, eventually culminated in 2010. The unfavourable macroeconomic climate accelerated the already ongoing consolidation of the telecommunications market.
Despite the fact that the economic reality called for more stringent cost control and a number of economizing measures, mobile operators followed the strategy of Telefónica O2 and innovated their service portfolios and continued to roll out their 3G networks in an effort to satisfy the growing demand for mobile internet and internet in handset.
These market developments spurred the demand for Telefónica O2’s wholesale services, especially its backbone network capacity. In collaboration with T-Mobile, Telefónica O2 commenced the preparation for 3G network sharing, a project to save costs to both companies and accelerate the deployment of the network.
With a strong campaign of T-Mobile in the consumer fixed broadband market, Telefónica O2 recorded an increase of wholesale ADSL connections, whose number went up by 22,000 to the total 70,000.
The demand for Ethernet-based data services also continued to grow. The Company responded by increasing the coverage and innovating its product portfolio in favour of higher speeds. The interest in services with higher transmission capacities of 1Gbit/s and greater also increased.
International wholesale services
In the area of international data and internet services, Telefónica O2 responded to the growing demand for international transmission capacity by acquiring a sufficient capacity reserve. As in the previous year, also in 2010 the Company saw a rising demand for high capacity international leased lines (Lambda 2.5 and 10 Gbps), and the volume of sales increased accordingly. Likewise, international IP connectivity was up, as was the demand for Ethernet-based services.
In the area of international voice services, Telefónica O2 continued to strengthen its market position in Central and Eastern Europe. The Company forged ahead with interconnecting its networks directly with those of other European fixed and mobile operators in Europe and beyond, with a focus on Russia, Near and Middle East. The transit voice traffic recorded a 12% increase on 2009, and reached a record-breaking mark of close to 1.7 billion minutes.
Also in 2010, Telefónica O2 maintained a high quality of voice services. Vodafone Germany recognized the Company as the international operator with the best quality of service.
In the area of international services, the Company closely cooperated with the international operator TIWS (Telefónica International Wholesale Services), which is a part of the Telefónica Group.