Tuesday, October 16, 2007

Two speed broadband in Europe

Although some European countries lead the world in broadband access, there is a growing gap between the best and worst performers, according to a report presented by the European Commission today. Lack of competition and regulatory weaknesses are cited as the main obstacles to broadband growth. The Commission will address these shortcomings in its proposals to reform the EU's Telecom Rules on 13 November.

On 1 July 2007 there were over 90 million fixed broadband lines in the 27 EU Member States of which some 20 million lines, excluding Bulgaria and Romania, have been added since July 2006, an increase of 28.7%. Proportionally growth was highest in Denmark (7.7 lines per 100 inhabitants), Luxembourg (7.1 per 100) and Ireland (6.7 per 100).

Broadband growth has continued in the last year throughout the EU, as businesses and citizens continue to benefit from the digital revolution (see IP/07/582). Average penetration (number of subscribers per population) has grown from 14.9% to 18.2%, despite the relatively modest penetration rates in some Member States. In the best performing countries – Denmark (37.2%) and The Netherlands (33.1%) – roughly one third or more of the population has broadband, with a substantial proportion using an infrastructure other than the incumbents.

According to data published by the Commission, the gap between the strongest (Denmark 37.2%) and weakest broadband performers (Bulgaria 5.7%) is widening slightly, with now more than a 30 percentage point difference. The main reasons for this are the lack of significant alternative infrastructures in some Member States or the need for a more consistent and speedy application of existing remedies (see IP/07/435). More than the already proposed enforcement needs to be done to stimulate investment so there is more consistent growth across the EU. Effective competition on the broadband markets in order to achieve "broadband for all" is therefore a key priority of the reform of the EU Telecom Rules that the Commission will propose next month.

KPN feels competition from Alice
Talking about broadband and the Netherlands. When the ADSL 20Mb service Alice was introduced, KPN employees sang the song Who the f*ck is Alice. But after two months KPN feels the bite and has come up with a competitor: Telfort. And I hear you say: But Telfort is a KPN brand for mobile telephony and not for fixed lines. When KPN bought Telfort it paid almost one billion euro; now this money will have to be earned back. So from this month onwards Telfort is no longer an exclusive mobile brand. It offers now also fixed lines and voip.

Besides its mobile offer, Telfort now offers two products: internet with a speed of maximally 20MBps for 19,95 euro a month and a voip subscription for 9,95 euro a month with free phoning to all fixed line numbers in the Netherlands. Telfort guarantees no price increases after one year or extra costs for the use of the fixed line. There is one catch: for Telfort internet and phoning a fair use policy is in force.

In the press release Telfort claims to bring clarity in the intransparent ADSL forest. In a recent market research survey the Dutch express that the internet market is intransparent, complex and full of misleading internet offers. This is a funny statement as Telfort mother KPN has a market share of 53 percent built up with a series of brands (XS4ALL, Speedlinq, 12Move, Tiscali and Planet, formerly Planet Internet) and its most expensive 20Mbps subscription plus voip subscripting is 92.50 euro. Bewilderment all over KPN brand portfolio.

Blog Posting Number: 896


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