Statistics Explained

Archive:Telecommunication sector statistics - NACE Rev. 1.1

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This article belongs to a set of statistical articles which analyse the structure, development and characteristics of the various economic activities in the European Union (EU). According to the statistical classification of economic activities in the EU (NACE Rev 1.1), the present article covers telecommunication sector statistics, corresponding to NACE Group 64.2, which is part of the media and communications sector. The activities covered in this article are the distribution of sound, images, data and other information via cables, broadcasting, relay or satellite. These services include:

  • the management and maintenance of networks;
  • the provision of services using these networks, including the provision of radio and television services, but not the production of radio and television programmes.

This article covers, for a large part, the activities of the so-called information society, a society whose wealth is based on its ability to process, store, retrieve and communicate information in whatever form – oral, written or visual. Enterprises acting in computer and related activities, such as hardware, software or data processing, are covered in Computer and information services statistics - NACE Rev. 1.1.

Table 1: Telecommunications. Market shares of operators in telecommunications (NACE Group 64.2) (%) (1)
Table 2: Telecommunications. Cost including VAT of a 10 minute call at 11 a.m. on a weekday, September 2006 (EUR)
Figure 1: Telecommunications (NACE Group 64.2). Index of turnover, EU-27 (2000=100)

Main statistical findings

Focus on mobile and fixed line telephony

Information on the market shares of operators in fixed and mobile telecommunications in the Member States shows that incumbents (those enterprises that were active before the liberalisation of the market, generally formerly state-owned telecom operators) still dominate. Across the EU they accounted for more than half of the market in 2005, whether for local, long-distance or international calls (in terms of minutes of connection or turnover). An average for the EU-25 shows that incumbent operators accounted for 72 % of local calls, some 66 % of long-distance calls, and 56 % of international calls. However, in some countries the dominance of the incumbent operator is less marked. For example, in Finland the incumbent accounted for less than half of the market for both long-distance calls and international calls. In some Member States, the same operators for the fixed network offer local and long-distance national and international telecommunications, while in other markets some operators specialise in particular services.

For the leading operators in mobile telecommunications data are available for 2006. Based on the number of subscriptions, leading operators in mobile telecommunications generally accounted for significantly lower market shares compared with the incumbent fixed telecommunication operators, and in a large majority of the Member States they provided less than half of all subscriptions in 2006. Slovenia and Cyprus stood out from the rest of the countries as their leading operators in mobile telecommunications accounted for 71 % and 90 % respectively of total mobile phone subscriptions.

Information on the cost of three types of fixed line calls for September 2006 shows that the difference in the cost between Member States is considerable. Cyprus recorded the lowest costs for local and national calls (EUR 0.22 for a 10 minute call on a weekday, including VAT) while Slovakia was the most expensive, 2.7 times as high for local calls and 5.9 times as high for national calls. Germany had the lowest cost calls to the United States (EUR 0.46), whereas the cost of such calls was 12.9 times as high in Latvia.

In June 2007 legislation was adopted on charges for using public mobile telephone networks abroad (roaming charges). In September 2008 the European Commission adopted a proposal (COM(2008) 187) to extend this from July 2009 to cover roaming charges for sending text messages and using mobile data services, and to extend the duration of the existing legislation on call charges to 2013.

Structural profile

The EU-27’s telecommunication services sector (NACE Group 64.2) employed some 1.2 million persons in 2005. There were few working proprietors and unpaid family workers in this sector as practically all (98.1 %) members of the workforce were paid employees. This workforce generated EUR 421.2 billion of turnover in 2005 and EUR 200 billion of value added in 2006. As such, the telecommunications sector accounted for more than half of the value added in the media and communications sector (NACE Divisions 22 and 64), but less than one quarter of the workforce, indicating a very high apparent labour productivity.

The five largest EU economies also had the largest telecommunications sectors in 2006 in terms of value added. The United Kingdom and Germany ranked first, each contributing around 18 % of the EU-27’s total. The same two Member States had the largest workforces, both employing just over 200.0 thousand persons in telecommunications. The contribution of telecommunications services to non-financial business economy value added [1] was highest in Romania (6.6 %, 2005), Cyprus (5.2 %, 2005) and Greece (5.0 %), although it should be noted that no recent data are available for this sector for Bulgaria or Luxembourg that are traditionally quite highly specialised in telecommunications.

Annual short-term statistics are available for the index of turnover for telecommunication services for the years 2000 to 2007. The EU-27’s turnover growth was uninterrupted during this period; with growth averaging 6.1 % per year, some way above the 5.3 % average for non-financial services (NACE Sections G to I and Divisions 72 and 74). Growth was very constant between 2002 and 2005, before slowing in 2006 (0.9 %) and accelerating again in 2007 (4.2 %).

Expenditure and productivity

The EU-27's telecommunications sector recorded high tangible investment, valued at EUR 46.2 billion in 2005. The investment rate, showing the relation between investment and value added, was 24.3 % in 2005, the highest rate among the sub-sectors of the media and communications sector, and the only one that was above the non-financial business economy average. Several Member States recorded particularly high investment rates in the telecommunications sector, most notably Romania, Cyprus (both 2005) and the United Kingdom where investment rates in this sector were more than double the national average for the non-financial business economy.

The EU-27's telecommunications sector recorded one of the highest average personnel costs (EUR 51.5 thousand per employee) within the non-financial business economy in 2005. Despite this, total personnel costs made up just 19.9 % of operating expenditure in the EU-27's telecommunications sector in 2005, the lowest share of the four media and communications sectors; this share was nevertheless still higher than the non-financial business economy average (17.1 %) in the same year. Apparent labour productivity was also very high in the telecommunications sector, the EUR 159.4 thousand of value added per person employed was the fourth highest among the non-financial business economy NACE groups in 2005 or 2006, and the highest of all of the non-financial services NACE groups. Despite these high average personnel costs, the telecommunications sector recorded a wage-adjusted labour productivity ratio of 309.4 %, indicating that apparent labour productivity covered average personnel costs three times over. This was the fifth highest level of this ratio among the non-financial business economy NACE groups for which data are available. Without exception every Member State (with data available in 2005 or 2006) recorded a wage-adjusted labour productivity ratio that was higher for the telecommunications sector than for the non-financial business economy as a whole.

Data sources and availability

Data sources include short-term statistics (STS) and Eurostat information society statistics.

Context

This sector gathers together several activities linked to media and communication activities, however, within this group a distinction has to be made between traditional activities (for example, postal services) for which the level of activity is rather stable and other newer activities (such as mobile telephony and electronic publishing), for which growth developments are more marked.

As part of the initiatives to support the development of the information society, the European Commission launched the i2010 strategy in June 2005, a digitally-led strategy for growth and jobs and the EU's policy strategy to boost the digital economy. Its aims are to: establish a European information space, in other words, a true single market for the digital economy so as to exploit fully the economies of scale offered by Europe’s consumer market; reinforce innovation and investment in information and communication technology (ICT) research given that ICTs are a principle driver of the economy; and promote inclusion, public services and quality of life, in other words, extending the European values of inclusion and quality of life to the information society. In April 2008, the results of a mid-term review of i2010 (COM(2008) 199) was published. A few examples of the activities cited in the review include a new regulatory framework for audiovisual media services, legislation to create a single market for mobile phone use across borders, and proposals to reform the regulation of telecommunications. Concerning the last of these examples, in November 2007 the Commission adopted proposals for a reform of the regulatory framework for telecommunications with the aim to provide consumers with better and cheaper communication services, whether for mobile phones, Internet or cable TV. The proposals covered strengthening consumer rights; reinforcing competition; promoting investment in infrastructure (freeing radio spectrum for wireless broadband services); and making networks more reliable and more secure. Following discussions in the European Parliament and the Council a revised set of proposals were adopted by the Commission in November 2008.

Further Eurostat information

Publications

Main tables

Database

Dedicated section

Other information

  • COM(2008) 187 of 11 April 2008 on the role of the CFP in implementing an ecosystem approach to marine management
  • COM(2008) 199 of 17 April 2008 on preparing Europe’s digital future i2010 - Mid-term review

See also

Notes

  1. ↑ Cyprus and Romania, 2005; Bulgaria, the Czech Republic, Ireland, Luxembourg, Malta, the Netherlands, Poland and Slovenia, not available.
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