Broadband to become 'mass market' in Europe

By 2006... And providers must start looking to premium content...

European domestic spending on broadband will increase tenfold between 2003 and 2006 to reach $3.4bn but the future health of the sector will depend less on connectivity and more on selling premium content. That's the view of Datamonitor, which in its latest report on the subject forecasts there will be 41 million European households using broadband to get online by 2006 as opposed to just over 10 million today. Breaking down take up by country, the analyst house reckons Germany will maintain its lead over the next three years but that the UK will overtake France, moving into second place on the back of price reductions and major marketing campaigns by service providers, especially BT. While BT and other telcos compete with cable operators providing cable modem-based broadband, Datamonitor predicts DSL - used over telcos' networks - will be the dominant delivery mechanism. Today, cable accounts for over half of the market in some countries, including the UK. The long-term exception will be the Netherlands where cable networks are highly developed. However, in line with other expert commentary, Datamonitor reckons mass take up of broadband relies on monthly subscriptions falling to at the most $25 - a figure that will erode if not obliterate margins for some providers of connections. To remain viable, these companies will look towards premium content which users are prepared to pay for. To date, adult content and gambling sites have parted cash from surfers and future services will also likely rely on interactivity, such as downloading music and playing games. The content needs to be "exclusive, of high value to end users and offered at reasonable price points", according to the report. 'European consumer broadband markets: still a fat pipe dream?' is available now via www.datamonitor.com.