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Eight EU Member States Ahead of the U.S. in Broadband Deployment says European Commission



March 19, 2008 By

Photo: Viviane Reding, EU Telecom Commissioner 

Denmark, Finland, the Netherlands and Sweden are world leaders in broadband deployment with penetration rates over 30 percent at the end of 2007, says the European Commission's 13th Progress Report on the Single Telecoms Market issued today. These EU countries, together with the United Kingdom, Belgium, Luxembourg and France, all had broadband penetration rates higher than the U.S. (22.1 percent) in July 2007. Nineteen million broadband lines were added in the EU in 2007, the equivalent of more than 50,000 households every day. The broadband sector generated estimated revenues of Euro 62 billion and Europe's overall penetration reached 20 percent. However, there is considerable scope for further consumer benefits from a reinforced single market, strengthened competition and reduced regulatory burden for market players.

"The European regulatory model is designed to increase competition in the telecoms market and this certainly is starting to pay off," said Viviane Reding, the EU's telecom commissioner. "However, the job is not yet done. Competition is limited for access to the fixed network which is still provided to 86.5 percent of customers over the incumbent's infrastructure. In addition, though telecoms technologies know no borders, only 30 percent of major operators' EU business is outside their home market. This shows that we still lack an attractive single market for businesses and services of European dimensions, so we must intensify our efforts to reduce the regulatory borders in Europe. Only by opening up the single market for business will Europe become competitive and will consumers benefit from a wide choice of rich and affordable services."

Today's report presents a snapshot of Europe's single telecom market as of December 2007, based on facts and figures from national telecom regulators and market players.

The telecom sector is worth nearly Euro 300 billion (2 percent of EU GDP) and grew by 1.9 percent last year, said the Commission in a release. 2007 was also the fifth consecutive year of increased investment in this sector, exceeding Euro 50 billion (similar to the U.S. and higher than China and Japan put together).

A Growing Sector
The mobile sector continues to be the largest in the telecom market, with mobile revenues up by 3.8 percent to Euro 137 billion. Mobile penetration rose further, to 112 percent compared to 103 percent in 2006. 3rd Generation (3G) mobile penetration doubled to 20 percent in 2007, now representing over 88 million subscriptions. As 3G took off, mobile data services grew by around 40 percent.

Fixed voice telephony revenues declined 5 percent compared to 2006, with customers switching to mobile and IP services. However, fixed operators were compensated by strong growth in their broadband services, generating revenues of Euro 62 billion.

12 Million Customers Changed Provider in 2007
Falling mobile voice prices of up to 14 percent reflect reductions in mobile termination rates charged by one operator to another to connect calls between their networks, as a result of intervention by national telecom regulators. Consumers also benefited from more bundled offerings. Thirteen percent of Europeans now subscribe to a bundled offer with a single bill, 12 percent include TV in their bundled package, 23 percent voice telephony, 6 percent mobile telephony and 24 percent Internet access.

Number portability -- switching operator without changing number -- is now possible for fixed and mobile users everywhere except Bulgaria and Romania. 12 million consumers switched operator in 2007.

The Single Telecom Market: A Lot Still to Do
The Commission's report also identifies areas where the single telecom market is incomplete:

  • Incumbent operators hold more than 46 percent of broadband lines and in 7 member states control more than 60 percent of broadband connections. In Cyprus, Luxembourg and Finland, the incumbent's broadband


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