The latest Heavy Reading report, Next-Generation Broadband in Europe: The Need for Speed, tracks both individual national markets and the region as a whole, and it finds an emerging residential broadband environment where high bandwidth and triple play over DSL are driving expansion.
The report looks at the broadband strategies of nearly three dozen operators in 16 countries, as well as the technologies likely to drive growth and the providers best positioned to deliver the services to Europe’s broadband users.
Key findings include:
- The total number of broadband lines jumped by more than 65 percent in 2004, with the highest growth in the U.K., France, Switzerland, and Italy. Overall broadband penetration by household is 21 percent, but there is wide variation, with Belgium, the Netherlands, and Switzerland all above 30 percent, and Ireland and Greece below 10 percent.
- Total broadband access lines will nearly quadruple over the next five years. Heavy Reading forecasts subscribers will increase from 38 million at the end of 2004 to 128 million at the end of 2009, a penetration rate of 69 percent. This assumes growth will rise to 90 percent of households over the next decade as incumbents replace their existing networks with all-broadband networks.
- A bandwidth race has begun to develop in many countries, and several providers are already offering maximum downstream bandwidth of 10 Mbit/s – including Bredbandsbolaget AB (B2), France Telecom SA (NYSE: FTE), Free, Noos, TeliaSonera AB (Nasdaq: TLSN), and Tiscali SpA.
- In 2004, less than 10 percent of connections were running at a speed of 2 Mbit/s or more. Heavy Reading projects that by 2009, that figure will have soared to almost 80 percent, and almost 30 percent of connections will be more than 10 Mbit/s.
- The triple play of voice, data, and video will become strategically important in the battle for European market share. "Pretty much all the bigger providers are talking about offering high speed, voice, and video; actually most are already doing it," says Graham Finnie, Heavy Reading Senior Analyst and author of the report.
- Despite the demand for more bandwidth and the implementation of triple play, European operators, unlike their counterparts in North America and Asia, are showing little interest in deploying fiber over the next three to four years. Thanks to shorter local loops, less interest in HDTV, and higher costs and a lack of regulatory relief for fiber deployment, operators believe ADSL2+, VDSL, and current-generation cable modems are enough to meet most user needs through the rest of the decade. Most operators have already deployed ADSL2+ or will do so this year; VDSL is attracting less attention, but it's likely to see more significant deployments in 2006 and beyond.