Narrower broadband the way forward for Europe, says new research

Posted on 16 Jul 2004 at 17:08

Narrower broadband is key to driving uptake, according to a report from Jupiter Research.

The report predicts that 59 per cent of European households will be net connected by 2009, with 63 per cent using broadband.

However in the UK, while broadband figures are showing a healthy rise, the vast majority of Net connections are dial-up. This large dial-up 'latency' of Net users simply can't be bothered to upgrade. Mark Mulligan, Research Director and Senior Analyst who contributed to the report said 'online tenure' has stifled broadband uptake in Britain - because we've had dial-up for so long, many of us have simply become used to the slow speeds.

Conversely, in places such as Spain and Italy, said Mulligan, where Internet penetration isn't so great, new Internet users are leapfrogging dial-up and moving straight to broadband.

But 'the exceptional broadband territories are the Low Countries, where there was already a strong cable TV market,' said Mulligan, 'In Belgium, for example, 66 per cent of Net connected households use broadband.'

The big driver of broadband uptake in these territories has been competitiveness and continual innovation. The early introduction of tiered broadband offerings that were not that much more expensive than dial-up was a big boost. Indeed sub-512kbps services currently account for 29 per cent of all broadband connections in Europe.

However, the control exercised by BT in its monopolistic hold of the ADSL market means that UK ISPs are less able to take advantage of attracting customers with low-speed tiered services. Most ISPs buy BT's IPstream broadband services that they sell on to end users. For a long time, 512kbps has been the consumer broadband product offered to ISPs - BT is only now trialling a 256Kbps service as an IPstream product. Has this lack of choice affected the competitiveness and progress of broadband in the UK compared to the likes of Belgium?

'There's an element of that,' agreed Mulligan, adding that such products have been 'narrow in scope'. But he said that UK broadband was now 'moving in the right direction.'

Lower speed services and data capping also allow ISPs to much more effectively manage filesharing traffic that clogs up networks. Mulligan said that the traditional ploy of ISPs to market broadband as equating to faster downloads for music and content will soon have to change. Likewise consumers that have traditionally felt that because they're paying the monthly connection fee, they feel they have already paid for the content on the Internet and certainly don't want to pay more for it.

'There has been implicit and tacit support for downloading illegal content,' he said. But as content becomes more important to ISPs, they will have to show content providers they are doing everything they can to prevent that content being illegally copied across their networks.

This may leave ISPs in something of a quandary when trying to market faster services to their customers and be seen to be stringent in the legal use of online copyright content. Mulligan says to expect an 'evolution' in broadband services as uptake reaches higher levels.

Author: Matt Whipp