European Broadband Subs Grow 55% In 2002, Finds Strategy Analytics

The figures show a 55% increase in the number of users over 2001, with penetration now reaching 7.5% of all European households. The report also claims that a growing number of people are choosing ADSL services in preference to cable. SA says that ADSL increased its share of new customer acquisitions from 72.3% in 2001 to 76.1% last year; cable’s share fell from 26.0% to 22.6%.

Strategy Analytics predicts that a further 7.2 million European homes will acquire broadband internet for the first time during 2003, bringing the total to 19.1 million, or 11.9% of total households. Unlike last year, cable operators are expected to increase their share of net new subscribers to 25.0%, while ADSL’s share drops back to 71.0%. However, cable’s improved performance will be contingent on successful financial restructuring and increased investor confidence, it says.

In the UK, cable operator NTL has recently emerged from its financial restructure, whilst rival group Telewest Communications is thought to be a few months away from completed its debt for equity swap. The two groups unexpectedly ruled out an immediate merger this week (see UK Cable Merger Put On Hold).

In the longer-term, Strategy Analytics forecasts that 38% of European homes will have broadband internet services by 2008. DSL and cable will continue to dominate: alternative platforms, such as satellite, fibre-to-the-home, fixed wireless and powerline, will only account for 2.1% of homes by this time, it says.

“Our analysis shows that broadband has been most successful in countries such as Belgium, Denmark and the Netherlands, where there is strong competition between cable and telco operators,” says Nick Griffiths, director of SA’s Global Broadband Practice. “Governments and regulators must adopt policies to encourage multiple operators and service providers to compete for new subscribers, otherwise broadband will remain the preserve of the affluent, urban minority.”

Recent figures from Oftel show that the UK internet access market is being stimulated by demand for high-speed, broadband services, which have recently fallen in price (see UK Gaining Ground In Broadband Arena). In the year to November 2002, broadband subscriptions rose by 272% in a market up 9%, according to the Office Of National Statistics (see Broadband Stimulates UK Internet Market). Oftel says that there are now more than 1.4 million broadband web users in the UK (see UK Broadband Revolution Gathers Pace).

The SA shows that penetration of broadband in the UK is 6.1% of internet homes. This is still lagging behind most other major European nations. Belgium currently leads the way with a 20.2% penetration, whilst Denmark is in second place with 18.2%.