Competition Reignites Broadband Growth in Europe

The results of the European Competitive Telecommunications Association’s (ECTA) bi-annual Broadband Scorecard show that broadband penetration in the EU has reached an all time high and has now drawn parallel with the US and Japan. The growth, at 16%, is largely the result of increased competition from new entrant telecoms providers using Local Loop Unbundling (LLU), cable and alternative technologies. These results come after a slow down in growth in the previous six month period.

Eight EU countries now have broadband penetration levels above 20% and Northern Europe leads the table with the Netherlands having the highest penetration at 33%, followed by Denmark, Finland and Sweden. And, for the first time, average penetration in the EU15 countries is, at 19.9%, comparable with the average penetration of 19.6% in the US and 20.2% in Japan (OECD Broadband Penetration, December 2006).

Success in many of the high ranking countries in Europe can be attributed partly to local loop unbundling, the process whereby competitors rent the last mile from the national telecoms incumbent and offer their own broadband services to consumers. The impact has been particularly pronounced in the UK, where the introduction of functional separation in January 2006 has contributed to a quadrupling in the number of unbundled lines within a year and an explosion of triple play offers including telephone services and TV. By contrast, middle and low ranking broadband countries typically have minimal or no unbundling.

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