Europe goes mad for broadband

Massive price cuts

Almost half of all households in Western Europe - 72m in total - will be be hooked up to broadband by 2010 as the cost of high-speed net access continues to fall.

The Netherlands and Scandinavia are expected to be broadband beacons thanks to their large proportion of online consumers, competitive markets and relatively low broadband prices, according to Forrester Research.

Portugal, Greece and Ireland will continue to lag in the broadband adoption charts as a result of lower overall levels of net use and PC ownership.

Lars Godell, principal analyst at Forrester, says massive price cuts are "leading to a rapidly declining broadband premium. This, combined with a continued strong supplier push, provides a major incentive to the consumer to make the switch to broadband."

Demand for residential broadband has boomed over the last two years. Take-up grew 81 per cent in 2003 and continued to surge in 2004, clocking 28 per cent growth in the first six months alone, Forrester says.

But it ain't all good news. In most countries, incumbent telcos continue to dominate their national broadband markets with market shares typically of 50-70 per cent. But in some countries broadband competition is beginning to bite: in the UK BT's share is down to 25 per cent while KPN's slice of the Netherland's action is 44 per cent.

"Continued intense competition, triggered by aggressive local loop unbundling (LLU) regulation and renewed focus on broadband triple-play bundles of voice, video, and data...will both drive the market forward and gradually reduce incumbent telcoss market dominance," said Forrester.

This week Viviane Reding, European Commissioner for Information Society and Media, called on the industry to supply "concrete proposals" to ensure that half of Europe can access broadband by 2010. ®

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