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European broadband to take-off in 2003
Monday, February 25 2002
by Matthew Clark


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."