Tuesday, November 23, 2010

EU: Growth in Fixed Line Broadband Slows as Mobile Takes Off

Growth in the number of fixed broadband lines across Europe is declining while the number of mobile broadband connections, especially in countries such as Finland, is accelerating, according to a new report from the European Commission with data from mid-year. Broadband take up continues to grow in the EU with 25.6 subscriptions for every 100 citizens (23.9 one year earlier). Between July 2009 and July 2010, the number of broadband lines throughout the EU grew by 8%, compared to an 11% growth of a year before. As of July 2010 there were around 128 million fixed broadband lines in the EU, with 9 million new lines added since July 2009. There are approximately 220 million households in the EU. The growth rates are slowing as the markets mature and reach saturation. The report also notes an early trend in fixed-to-mobile broadband substitution in countries such as Finland and Sweden.

Annual growth in mobile broadband is remarkable at 45%, with 6 mobile broadband dedicated access devices (usb-keys or dongles) per 100 citizens.

Neelie Kroes, Commission Vice-President for the Digital Agenda, said "Fast broadband is digital oxygen, essential for Europe's prosperity and well-being. Take up and available speeds are improving, but we need to do more to reach our very fast broadband targets. In particular, we need urgent agreement on our proposal to ensure radio spectrum is available for mobile broadband, for which demand is growing very fast."

Some highlights of the report:

The average speed of broadband connections is improving. In July 2010, 29% of EU broadband lines had speeds of at least 10 Mbps (up from 15% one year earlier). About 5% of lines in the EU have average speeds at or above 30 Mbps (only 0.5% at or above 100 Mbps).

Nine EU countries (Belgium, Denmark, Finland, France, Germany, Luxembourg, The Netherlands, Sweden and UK) have levels of broadband take up above the United States (US levels are 26.4 subscriptions per 100 inhabitants, according to OECD May 2010 statistics). Greece and the Czech Republic made the best progress in the last year (measured by per capita growth).

DSL remains the most common technology to access broadband in Europe with 100 million lines, but its market share is declining in favour of higher-speed fibre architectures and cable with Docsis 3.0 . Total DSL coverage increased from 92.7% of population in December 2008 to 94% in December 2009, while rural coverage reached 80% of rural population by end 2009 as opposed to 76.6% a year ago. Only six member states have DSL coverage below 90%.

FTTH grew by 40% between July 2009 and July 2010, but currently only represents 1.7% of the total lines in Europe as it is present only in a handful of countries (notably Sweden, where 24% of broadband lines are FTTH). The biggest FTTH growth took place in Portugal (+154% in this period) followed by Latvia (+108%).

Mobile broadband access (e.g. dongles for laptops) is taking off in a number of Member States, in particular Finland (21.5 mobile broadband dedicated access lines through usb-keys/datacards/dongles per 100 citizens), Austria (16.7), Sweden (14), Denmark (13.4) and Portugal (12.1). Current mobile broadband penetration in Europe stands at 6%, a 45% increase since July 2009.

The average market share of incumbent telecoms operators in the EU fell slightly to around 44% (highest at 76% in Cyprus, 68% in Finland and 66% in Luxembourg; and lowest at 28% in Romania and the UK and 32% in Bulgaria).

The report finds that incumbent domination of broadband markets (including resale of wholesale lines) is structurally in decline to the benefit of infrastructure-based competition (basically through local loop unbundling that enables access to the network by third parties). Fully unbundled local loops and shared access lines represent 74.8% of the alternative operators' DSL, up from 71.4% one year ago. Growth in the number of unbundled local loops, although slower than last year, takes place at the expenses of resale, a type of low-investment access for new entrants, which has shrunk from 10.6% to 8.9% of DSL lines since 2009. New entrants to telecoms markets appear to have invested progressively which has helped create a more competitive broadband market.http://europa.eu