Eight EU Members Ahead of U.S. in Broadband, Commission Says

Denmark, Finland, the Netherlands and Sweden are world leaders in broadband deployment with penetration rates over 30 per cent by the end of 2007, according to the European Commission’s 13th Progress Report on the Single Telecoms Market, issued today.

The aforementioned countries, together with the UK, Belgium, Luxembourg and France, all had broadband penetration rates higher than the US (22.1%) in July 2007. Nineteen million broadband lines were added in the EU in 2007, the equivalent of more than 50,000 households every day. The broadband sector generated estimated revenues of EUR62 billion and Europe’s overall penetration reached 20 per cent.

The European Telecommunications Network Operators’ Association (ETNO), representing the incumbent telecoms providers, disagrees with the Commission's optimistic tone on broadband deployment figures: “With one million subscribers to fibre-based broadband networks, Europe is currently lagging behind its main world economic partners, in particular the US, in terms of high speed broadband access networks roll out,” the organization stated in a press release.

The ETNO is referring to a report from the FTTH Council, published earlier this year, according to which only the EU countries Sweden and Denmark are among the world’s leaders in penetration of FttH deployment – but with rather low rankings.

The FTTH Council's ranking showed that Asian economies outpace the rest of the world in terms of FttH market penetration, with South Korea moving into the top slot with 31.4 percent of households connected, followed by Hong Kong (23.4) and Japan (21.3).

EU Member State Sweden comes in fourth place with 7.1 per cent, followed by Taiwan (6.8) and Norway (6). EU Member Denmark occupies seventh position on the chart with 2.5 per cent. The United States doubled its penetration rate to 2.3 per cent and moved up to eighth position, followed by EU Member Slovenia (1.8) and Iceland (1.5), the number 10 on the chart.

Apart from broadband deployment rankings, the EC’s Progress Report presents a snapshot of Europe’s Single Telecoms Market as of December 2007, based on facts and figures from national telecoms regulators and market players.

The EU Telecoms sector is worth nearly EUR300 billion (2% of EU GDP) and grew by 1.9 per cent last year. 2007 was also the fifth consecutive year of increased investment in this sector, exceeding EUR50 billion (similar to the US and higher than China and Japan put together).

The mobile sector continues to be the largest in the Telecoms market, with mobile revenues up by 3.8 per cent to EUR137 billion. Mobile penetration rose further, to 112 per cent compared to 103 per cent in 2006. 3G mobile penetration doubled to 20 per cent in 2007, representing over 88 million subscriptions. As 3G took off, mobile data services grew by around 40 per cent.

Fixed voice telephony revenues declined 5 per cent compared to 2006, with customers switching to mobile and IP services.

Falling mobile voice prices of up to 14 per cent reflect reductions in MTRs charged by one operator to another to connect calls between their networks, as a result of intervention by national telecoms regulators.

Number portability is now possible for fixed and mobile users throughout the EU except Bulgaria and Romania. 12 million consumers switched operator in 2007.

The Commission’s report also identifies areas where the Single Telecoms Market is incomplete:

Incumbent operators hold more than 46 per cent of broadband lines and control more than 60 per cent of broadband connections in 7 Member States.

Moreover, access to fixed telephony is still provided to 86.5 per cent of customers over the incumbent’s infrastructure, and to more than 95 per cent in the case of 12 Member States, either because regulatory changes have yet to be made or to take effect.

MTRs have gone down in 2007 but vary widely across the EU. The EU’s highest MTR is more than 10 times higher than its lowest: 1.9 Euro cent/min in Cyprus, 22.4 in Estonia. This can cause uncertainty for pan-European operators.

Read the EC’s full press release

UPDATE 20 March:

Read ECTA’s comments on the Commission’s report

Source: Europa.eu, ETNO, FTTH Council

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