EU broadband gap widening


16 Oct 2007

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The broadband gap in Europe is widening, according to a report released by the European Commission.

The gap between the strongest broadband performer Denmark (37.2pc penetration) and weakest Bulgaria (5.7pc) is widening slightly, the report found.

The main reasons for this are the lack of significant alternative infrastructures in some member states or the need for a more consistent and speedy application of existing remedies recommended by the Commission.

The report stated more needs to be done in order to stimulate investment so there is more consistent growth across the EU. On 13 November the Commission will propose effective competition on the broadband markets in order to achieve broadband as a key priority of the reform of the EU Telecom Rules.

“Broadband growth remains strong with the top EU countries now world leaders in broadband penetration,” said EU Telecoms Commissioner Viviane Reding. “However, it is unacceptable that the gap between the strongest and weakest performers in Europe is growing. Europe must act now to get its broadband house in order. I will make specific proposals on this as part of our package of reforms for the EU Telecom Rules on 13 November.”

Average EU penetration (number of subscribers per population) has grown from 14.9pc to 18.2pc over the past year. In the best performing countries — Denmark (37.2pc) and The Netherlands (33.1pc) — roughly one third or more of the population has broadband, with a substantial proportion using an infrastructure other than the incumbents. Ireland has a penetration rate of 15.5pc, below the EU average and 14th out of all EU countries.

On 1 July 2007 there were over 90 million fixed broadband lines in the 27 EU member states, of which some 20 million lines, excluding Bulgaria and Romania, had been added since July 2006, an increase of 28.7pc. Proportionally, growth was highest in Denmark (7.7 lines per 100 inhabitants), Luxembourg (7.1 per 100) and Ireland (6.7 per 100).

DSL remains the EU’s main broadband technology, with some 72.5 million lines. However, DSL growth has slowed by 6.1pc compared to July 2006, while alternative technologies such as cable, fibre to the home and wireless local loops are more widely used, totalling some 17.7 million lines.

There has been intense competition in DSL subscriptions, demonstrated by a high growth of unbundled local loop products: 55.4pc of all alternative operators’ DSL lines (17.6 million lines) are either fully or partially unbundled, compared to 45.9pc in July 2006. Resale (8.2 million lines) remains an important type of wholesale access.

The market share of the alternative operators in Europe has continued to grow and has reached 53.5pc in July this year. However, the market share of new market entrants is only at 44.3pc if simple resale of incumbents’ DSL lines is excluded. Alternative operators are also increasingly invest in their own networks compared to services based on the incumbents’ infrastructure.

By Niall Byrne

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