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3 December 2008

Europe remains hotbed of broadband, but DSL growth slowing says EC

The European Commission has released new figures for broadband penetration and says that across all of the 27 countries in the EU, broadband
penetration is up to 21.7%, almost up 3% since this time last year.

Digital Subscriber Line (DSL) is the EU’s main broadband technology, with nearly 86 million lines out of 107 million lines, but DSL growth is decreasing rapidly, and went up by just 10.9% compared to July 2007, to the benefit of other fixed broadband technologies like cable, fiber to the home and wireless local loops.

But the report also shows the staggering uptake of mobile broadband during the year, jumping to 6.9% penetration virtually from a standing start a year earlier. The numbers run from July to July.

The report says that 17 million fixed broadband lines were connected this year and that 75% of them have download speeds of 2 Mbps or faster. Extremely fast connections (up to 100 Mbps or beyond) such as fiber, only cover 1.4% of European internet subscribers.

By July 2008 there were over 107 million fixed broadband lines in the EU, of which 17 million lines have been added since July 2007. The rate of growth was highest in Malta (growth was 6.7 lines per 100 inhabitants), Germany (5.1 per 100 inhabitants) and Cyprus (4.9 per 100 inhabitants) but lowest in Finland (1.9 per 100 inhabitants) and Portugal (1.0 per 100 inhabitants).

Globally, Denmark and the Netherlands continue to be world leaders in broadband, with penetration over 35%. Nine EU countries (Denmark, the Netherlands, Sweden, Finland, the United Kingdom, Luxembourg, Belgium, France, and Germany) are above the United States which stands at 25%.

The gap between the strongest (Denmark 37.2%) and weakest broadband performers (Bulgaria 9.5%) remains significant but is decreasing for the first time (penetration in Denmark was 34.1% in July 2007 while in Bulgaria it was 5.7%).

The gap can mainly be explained by lack of competition and regulatory weaknesses. For example, while the market share for incumbent fixed broadband operators is beginning to stabilize at around 45%, in some countries (Austria, Bulgaria, France, Ireland, Lithuania, Romania and Spain) it has increased since July 2007.

In countries where there are significant players offering unbundled lines growth rates remains the highest.

Mobile broadband in Denmark, Greece, Germany, Italy, Slovenia and Spain grew by more than 10% and there were 34 million mobile broadband subscribers in the EU on 1 July 2008 (not including France, the Netherlands and the UK who have not provided information on this, but where mobile broadband is probably the highest).

The mobile broadband penetration rate, which measures the proportion of the total population actively using mobile broadband, ranges from less than 1% (Belgium and Cyprus) to nearly 20% (Spain) with the EU average at 6.9%.