This report is comprised of 167 statistical tables and covers 19 countries. For those needing high level strategic information and objective analysis on this region, this report is essential reading and gives further information on:
The importance of LLU for competition;
Increasing demand for VoD and triple play services;
The implications of rapidly developing ADSL2+ networks;
The changing face of converged media with widespread triple play services becoming a standard feature in homes;
Future plans, strategies and results of home entertainment carried through broadband;
Governments and municipalities investing in optimum fibre networks to bolster their economic welfare;
Shifting mood throughout Europe to make broadband a Universal Service Obligation.
The substantial growth in broadband in Europe during the last two years has kept several European Union (EU) countries at the top of global league tables, with Iceland, Denmark and The Netherlands having taken over South Korea as leaders in broadband penetration by mid-2006. This growth has been driven by intensifying competition and by regulatory measures to improve competitor access to local loops. The major operators have also offset their eroding voice telephony revenues by investing in IP services, and the progressive development of all-IP networks, notably in the UK, promises further growth in coming years as triple play services bolster saturated markets. The leading broadband markets in early 2006 were Belgium, The Netherlands, Denmark and Sweden, while the UK showed the fastest growth. The main growth driver remains DSL, followed by cable, while fibre has also had an improving footprint in certain markets, notably Scandinavia and Italy. Fibre is likely to take an increasing share of network build as deployment prices fall and governments and municipalities invest in optimum infrastructures to sustain national and local economies. This report presents statistics and analysis on the growth of broadband markets in Europe, together with country forecasts to 2015 based on scenarios assessed on several key factors. It analyses the latest developments in ADSL, cable, and fibre technologies, and examines market conditions, the competitive and regulatory environments, and government policies supporting broadband infrastructure and take-up to the end of the decade and beyond.
Europe’s broadband market continued to show remarkable resilience during 2005, reaching 50-60% growth in some countries. The overall broadband growth rate in 2005 was about 15% per quarter. Slower growth was noticeable in some countries where adoption was already high (Belgium and Sweden) though it continued to grow strongly in The Netherlands;
A wide variety of technical solutions is available for accessing broadband. Satellite, Broadband Powerlines (BPL), fibre, dedicated lines and Wireless Local Loop (WLL) accounted for about 14% of new connections in 2005, while WiMAX may have a strong future following the clarifications on technical protocols at the end of the year. The EC is keen to use its regulatory powers to boost these technologies, promoting inter-platform competition, particularly with BPL, which it considers a potential alternative to cable and DSL;
Increasing competition throughout the region has followed the launch of services by a greater number of alternative operators, predominantly due to improvements in interconnection and access market conditions;
Strong growth in the number of Asymmetrical Digital Subscriber Line (ADSL) connections were largely due to the focus on broadband by incumbent operators, a trend that is likely to continue through 2006 and 2007 as they make up for falling fixed-line revenue;
Local Loop Unbundling (LLU), carrier preselection (CPS) and Wholesale Line Rental (WLR) are increasing competition in the local loop - although in a delayed and piecemeal fashion in many countries. France has proved to be a leader in Europe, following a slow start, while the UK and other countries have strong regulatory backing to expand LLU for competitors;
Fibre optic cable will be the underlying technology to cope with the multiplicity of applications which consumers will demand. Cheaper roll-out prices have made infrastructure commitments more feasible, while municipalities and governments have embraced large-scale networks to promote and secure economic growth;
DSL is likely to remain the dominant platform during the next few years, since it reaches at least twice as many households as cable, and its main backers - the incumbent telcos - have strong financial and infrastructural resources to exploit their existing footprints. Furthermore, they are able to deliver emerging ADSL technologies, such as Very High Data Rate Digital Subscriber Line (VDSL) and ADSL2+, which were rolled out in several European countries by the beginning of 2006, with many more networks being built during the year. By 2008, ADSL2+ may claim 71% of European broadband connections, dwarfing alternatives;
Key players in the provision of 20Mb/s services include Free (Iliad), Wanadoo and neuf Cegetel in France, as well as Telecom Italia’s Alice brand serving Germany, Italy and France. The UK was provisioned with its first 24Mb/s service in early 2006, while Sweden and The Netherlands are leaders in municipal fibre networks;
Consumer demand for high-bandwidth applications - triple play, IPTV, Video-on-Demand, and a range of business and family-based video-sharing tools - will stimulate network roll-outs by incumbents and by new entrants exploiting LLU. Once broadband is released from its PC-based limitations to become the main conduit for home entertainment, broadband penetration will broach the natural 60-65% saturation level and climb towards 85-95% in some markets within ten years, given the right conditions;
The convergence of telecoms and media will further stimulate broadband take-up, as popular programming such as sport events become mainstream. In The Netherlands exclusive TV rights to the Dutch Premier Soccer League are on broadband TV rather than traditional TV, while the BBC is similarly streaming major sports events via broadband. In Italy, Mediaset bought the TV rights to Livorno teams’ football games for the 2007-2010 seasons covering the ADSL and mobile TV distribution platforms.