New EU States Hit 1M B'band Subs

ECTA says the 10 new European states have reached 1M broadband connections between them; usage has increased by half across the EU

January 7, 2005

2 Min Read

BRUSSELS, Belgium -- The latest ECTA scorecard confirms that the 10 new EU member states now have 1 million broadband connections between them.

For the EU as a whole broadband usage had increased by a half in the first 3 quarters of 2003 to 33m this quarter, as consumers have responded to the steadily growing choice of offerings available from entrants in the market. Governments and regulators are therefore being rewarded for the investments they have made in creating a level playing field.

Hungary boasts the largest total number of broadband connections among the new member states, but Estonia has the highest level of penetration. In several member states cable and other networks play a substantial role in the market, and it will be interesting to track whether the incumbent DSL services will subsequently emerge as dominant as they are doing in the rest of the EU.

In the EU-25, there have been positive developments in the wholesale broadband access market and this is now leading to growth at the LLU rung of the “investment ladder”.

  • Wholesale broadband access: Over the DSL lines that incumbents provision, their share of retail broadband connections has fallen from 81% to 77% in the last three quarters. Notable exceptions to this drop have been Germany, Portugal and the Netherlands. The number of ATM interconnect connections has increased the most substantially, although there are signs that growth is slowing here. However, IP handover products remain the largest single access product used by entrants, so regulators should start increasing attention to facilitating migration of customers from IP handover to ATM and LLU based products.

  • LLU: At the LLU level, this quarter saw the number of line sharing connections overtake the number of “full unbundling” connections. This reflects the fact that line sharing was not initially given the same priority by regulators following the adoption of the LLU Regulation in 2000, but is now a key driver in urban parts of France, the Netherlands and Sweden. It is possible that LLU will surge back into the lead in 2005 as players in many member states introduce VoIP services.

Looked at more broadly, however, the incumbents still retain a stranglehold over the provision of fast Internet access. Despite the rise in unbundling, the proportion of total connections provisioned by incumbents has remained unchanged. This is because cable TV (and other alternative infrastructures) has declined in importance, reflecting the fact that markets where cable is present grew quickly early on and are now more mature. Indeed, growth rates in the EU’s leading countries is now tailing off at levels much lower than those achieved in other countries.

European Competitive Telecommunications Association (ECTA)

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