Broadband To Hit 30% Penetration In Europe By 2008

In 2002, adoption grew by 92% year on year as the price premium of high-speed services over dial-up began to fall. By the end of the year, 8% of European homes had a broadband connection, representing 20% of all online homes.

Continued broadband uptake will see definitive north-south split, with penetration levels ranging from as low as 5% in Greece, up to 45% in Norway. In Scandinavia and the Netherlands overall penetration will be higher than 40% by 2008.

Price paramount Price cuts are expected to push 2003 growth of broadband adoption to 53% and a slow content build will sustain double-digit growth through to 2008, says Forrester.

Consumers are very price sensitive when it comes to subscribing to a broadband service. Last year the average ‘broadband premium’ fell from 2001’s 178% to just 101%, accelerating adoption. The critical point appears to have been the â‚Ź30 (£20) per month level, which has already been undercut in a number of countries, including the UK.

The table below shows how the relative cost of broadband services was slashed during 2002. In the UK, for example, dial-up access cost an average of â‚Ź12.55, whilst broadband cost â‚Ź52.62 – a premium of 319%, one of the highest in Europe. By the end of 2002, the premium had been reduced to just 74%, with dial-up at â‚Ź14.40 and broadband at â‚Ź25.01.

Where’s the content? Forrester says that attractive, exclusive broadband content is still embryonic and that occasional users will only make the move to broadband if it offers them content and services that they can’t get elsewhere.

As with any emerging technology, this leaves operators at an awkward crossroads: whether and when to invest in a new raft of content to drive uptake for a platform which only a relatively small number of consumers currently have. Video and TV services have already been tested, but not fully developed.

The report says that no major telco wants to commit to a commercial roll-out whilst lacklustre video-on-demand (VOD) services remain the most common experience so far: Forrester spoke to 15 VOD operators at the end of 2002 and none had more than 30,000 customers.

Delivery platforms – ADSL to lead The study also shows that ADSL will be the most popular system for broadband internet delivery, mainly because it has a higher coverage of homes in Europe than cable, but also because its main backers hold a stronger financial and market position than the cable operators.

By 2008, 71% of European homes will use ADSL to access the internet, whilst cable stands at 22% and other technologies (fixed wireless, satellite, fibre and powerline) pick up just 7%.