The European Electronic Communications Regulation and Markets 11th Report

EU report: In the field of broadband, take-up has grown rapidly to nearly 53 million lines, a rise of almost 20 million during 2005. More providers are in the market, with prices falling as transmission speeds increase. New entrants now have a combined market share of almost 50%, although many rely on incumbents’ networks to provide services. There is a significant move to unbundled local loops, with increased service quality and differentiation.

In mobile, while take-up continues to increase, in particular in the new Member States, there are signs that the voice market is maturing. Revenues have, however, continued to grow at an estimated 5.9%. Prices for international roaming nonetheless remain high. 3G voice and content services are now rolling out with around 15 million subscribers.

Revenues in traditional voice services continue to decline gradually, but remain the largest source of revenue to players in the fixed market. Consumers continue to benefit from falling call prices as more players enter the market. Voice over IP (VoIP) is challenging further the market position of entrenched players. It remains to be seen to what extent the challenge is compounded by services provided by internet software and search companies.

What has led to the rapid take-up of broadband?

There was a significant increase in broadband take-up in 2005, with average EU penetration (lines per 100 population) reaching 11.5% in October compared to 7.4% in October 2004 (with average EU 15 penetration up from 8.4% to 13% over the same period). This equates to over 52,000 new broadband lines per day across the EU.

The total number of fixed broadband lines in the EU now stands at almost 53 million. Revenues from fixed data services have increased considerably (8.3%) This indicates that the consumer is benefiting from lower broadband prices as volumes grow.

New entrants have a combined market share of almost 50%, although many still rely on incumbents’ networks to provide services. But there has been a significant move to unbundled local loops, with increased service quality and differentiation.

Consumers are clearly benefiting from lower prices and higher speeds and a variety of broadband offers due to increasing competition in this market. New services (including triple play (voice, broadband, TV) and quadruple play (voice, mobile, broadband and TV) offerings), in turn are also expected to boost consumer demand and contribute to the current migration from dial-up to broadband.

Has mobile penetration continued to grow?

The average EU penetration of mobile services reached 92.8% in October 2005 with faster growth being achieved in the EU 10. Three of the new Member States have exceeded the notional 100% mark for the first time. The number of service providers has grown from 166 in 2004 to 214 last year with 79 2G network operators in the EU. Penetration tends to be highest in the countries with a greater number of service providers.

What about 3G?

By September 2005, it was estimated that there were around 15 million subscribers to 3G services in the EU, which is a considerable increase over the previous year. There are now 58 operators offering commercial services including internet access, content services including news and sports highlights, video telephony and downloads. The European Electronic Communications Regulation and Markets 11^th Report Publ 20060220