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Broadband growth sees incumbent telcos under fire

High-speed Internet connections are rolling out all over Europe, and newer providers are providing a challenge to previously dominant telcos
Written by Jo Best, Contributor
In the next few years, broadband will become the norm rather than the exception for Europeans, according to analysts.

A report by research group Forrester found that the growth in broadband connections in Western European homes has steamed ahead, growing by 81 percent in 2003 and by 28 percent last year. It predicts that by 2010, that figure will rise to 41 percent of all households by 2010, making up 67 percent of all Internet-connected households.

Despite the healthy looking state of broadband across the European Union, the respective broadband haves and have-nots will remain.

Among the haves will be the Netherlands and Scandinavia. At the end of the decade, Forrester predicts, the Netherlands will take the connectivity crown with 54 percent of households equipped with a fat pipe.

Those topping the broadband league will do chiefly because of their increased numbers of online consumers and also because of competition in the supply market keeping the broadband prices relatively low, says the report.

Ireland, Portugal and Greece will be the broadband laggards, with fat pipes making it into between 17 and 34 percent of homes, chiefly due to higher prices and relatively low PC ownership, says Forrester.

The UK will fall in the 35 to 45 percent range.

The analysts also believe that the incumbents' share of the broadband business will start to wane as time goes on.

Currently, according to the report, the incumbents have snagged between 50 and 70 percent of their home country's connections. The UK and the Netherlands are the least attached to their historic telcos, however, with BT holding onto just 25 percent and KPN taking 44 percent.

Looking to the future, Forrester predicts a continuing slide for the incumbents. The dot-com style boom of competitors will see prices maintaining their fall as a result of local loop unbundling and broadband upstarts will be able to put together a more attractive triple-play of voice, video and data service to tempt users to switch.

Figures released by the government this week found that even more Britons are ditching dial-up in favour of high-speed connections.

According to the Office of National Statistics, 38 percent of all Internet subscriptions were broadband as of November last year - an 88 percent year-on-year rise.

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