LACK OF COMPETITIVENSS HAS COST EUROPE 20 MILLION BROADBAND LINES, STUDY FINDS

A report published today by a leading economics consultancy has concluded that Europe could gain an additional 20 million broadband lines if regulators take action to increase competition.

In Broadband in the EU: the importance of dynamic competition to broadband growth, SPC Network examined broadband take-up and the intensity of competition across 21 countries as reported in ECTA's quarterly Broadband Scorecard. The study found that the adoption of broadband accelerates when the market opens up and more choice is made available for users.

Steen Clausen, Managing Director of ECTA commented: Put simply, opening markets provides a greater opportunity for providers to innovate and drive down prices. This diversity and value in turn helps more consumers find a product that suits their needs, such as the wealth of new video-on-demand services being launched across the EU. Competitiveness in broadband also drives adoption among SMEs and this is vital for the transformation of the EU economy.

In a recent speech in Vienna, Information Society Commissioner Viviane Reding confirmed the importance of ICT take-up across the economy down to the smallest business: Productivity gains at firm level through innovations such as e-procurement are transforming business performance,she said.

The report suggests that one of the keys to achieving this is action by regulators to ensure that markets are opened through ULL and wholesale broadband, as well as encouraging new technologies such as wireless. Amongst the original EU Member States SPC Network found that where competition amongst broadband delivery routes increased by just 1% this resulted in a 3% increase in broadband penetration. 

These conclusions are in line with the Commission's recently released report on Implementation of the European Regulatory Framework, which found that, while many factors contribute to broadband take-up, competition is one of the most important the countries with the highest penetration (above 15%) all have high cable penetration but often also well-developed access regimes such as for ULL or bitstream. The importance of choice is not restricted to the broadband sector alone: the 11th Implementation report also notes that "[mobile telephony] penetration tends to be highest in countries with a greater number of services providers".

"The SPC Network study proves conclusively that the present EU pro-competitive telecoms policies enforced by some countries are directly responsible for boosting broadband adoption by consumers and small and medium-sized businesses alike, said Clausen. Equipping SMEs with broadband will be critical to the development of the information society, and ECTA will be pressing the Commission to accelerate the opening up of the market throughout this year's review of the Directives."

SPC Networks report Broadband in the EU: the importance of dynamic competition to broadband growth is available on their website http://www.spcnetwork.co.uk/

ECTA's quarterly broadband scorecards which measure take-up of broadband and the access routes used to deliver it (eg cable, DSL bitstream, LLU), are available at http://www.ectaportal.com/.

For additional information, please contact:
Ilsa Godlovitch
Head of Regulatory Affairs, ECTA
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+32 (0)2 220 3118