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Next year will be Europe's watershed year for broadband rollout and take up, according to new research.
"Soaring demand" for high-speed Internet services will drive the number of high-speed data users in Western Europe substantially higher over the next six years. According to Frost & Sullivan, the number of Western European broadband subscribers will rise from 3.8 million at the end of 2001 to 28.1 million in 2008.
Moreover the company says 2003 will be the European broadband market's watershed year, when the number of subscribers will start to grow in "leaps and bounds." Drivers will include increased connection speed demand, greater Internet traffic and the growing office/home office (SoHo) population.
But in addition to these factors, compelling content, such as videoconferencing, video-on-demand and store-and-play applications, will drive demand for DSL services claims Donald Tait, telecoms research analyst at Frost & Sullivan.
But the company admits that roll out has been slow until now and refers to factors such as local loop unbundling as the main culprits. "The European Commission cites three key reasons why competition is making such slow progress in the European broadband market. This includes incumbent telcos exploiting first mover advantage, predatory pricing and regulatory delaying tactics," said Tait.
More government intervention needs to occur in order to promote the rollout of broadband in Europe, Frost & Sullivan says. Offering tax incentives to companies to roll out broadband in rural and low-income areas is one method of developing the market, the study explains.
According to the study Sweden is leading the way in penetration with 4.5 percent per 100 inhabitants, followed by the Netherlands and Denmark.
Britain remains rooted near the bottom of an international league table of broadband countries. To stress this point, Frost & Sullivan says the French government in July 2001 announced USD1.4 billion would be available for low cost loans to fund broadband infrastructure work in rural areas. In contrast, the UK government announced in June 2001, USD42.6 million to Regional Development agencies.
Ireland currently has no consumer or wholesale DSL product.
Meanwhile, fixed wireless broadband providers are not projected to experience the mammoth growth that their fixed-line colleagues will experience. Some of the leading pan-European fixed wireless operators filed for bankruptcy in 2001, the report says, citing casualties such as Winstar, Formus Communications and Deutsche Landtel. These failures, along with curtailed investment in the technology "have had an adverse effect on the rollout of broadband fixed wireless during 2001."
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