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Thursday, 23 May, 2002, 09:12 GMT 10:12 UK
Broadband competition 'a myth'
Internet surfer, BBC
An average of 4% of European homes are now connected to broadband
Broadband take-up is increasing rapidly in Europe but it remains in the hands of a few dominant telecoms companies.

According to analyst firm IDC, the rise of high-speed internet services is down to aggressive marketing campaigns from incumbent operators such as BT rather than a competitive environment.

"Incumbent operators have a majority share of broadband connections in most countries," said IDC research manager Jill Finger.


The local loop unbundling process is simply too complex and politically problematic to create a competitive broadband access market within a reasonable timeframe

Jill Finger, IDC
IDC estimates that an average of 4% of homes across Europe are now connected to broadband.

Broadband offered via telephone lines remains the main method of access, accounting for 68% of connections.

Wholesale future

Cable broadband accounts for 30% of the market, with other technologies such as satellite and fixed wireless accounting for just 2% of broadband.

IDC blames the failure of local-loop unbundling - the process whereby other operators take control of telephone lines - for the lack of a competitive broadband landscape.

"The local-loop unbundling process is simply too complex and politically problematic to create a competitive broadband access market within a reasonable timeframe," said Ms Finger.

New content

Instead, operators will have to rely on wholesale services offered by the incumbent in order to compete in the broadband market, she said.

As broadband take-up increased, operators must look beyond the advantage of speed to sell services to consumers, the report said.

According to the report, enhanced voice services, education, public health services and video streaming are all things operators must consider offering in order to retain customers and create money from broadband in the future.


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