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EU Scorebards 2013 – Broadband Markets

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The European Commission (EC) Digital Agenda for Europe (DAE) – Broadband Markets Scoreboard report for 2013

Broadband coverage: Basic broadband is available to everyone in the EU, while fixed technologies cover 97% leaving 6 million homes unconnected. Next Generation Access (NGA) covers 62%, up from 54% a year ago. Deployment of 4G mobile increased sharply. Rural coverage remains significantly lower, especially in NGA.

Basic broadband is available to all in the EU, when considering all major technologies (xDSL, Cable, Fibre Refreshto the Premises, WiMax, HSPA, LTE and Satellite). Taking only fixed, fixed wireless (WiMAX) and mobile wireless (HSPA and LTE) into account, the coverage goes down to 99.4%. Fixed and fixed-wireless technologies cover 97.2% of EU homes.

Next Generation Access technologies (VDSL, Cable Docsis 3.0 and FTTP) capable of delivering at least 30Mbps download are available to 62%.

Coverage in rural areas is substantially lower for fixed technologies (89.8%), and especially for NGA (18.1%). 

Coverage of fixed broadband

Technologies continued to increase slightly with a focus on rural areas. In four Member States, all homes are covered by at least one fixed technology.

The UK ranked 4thin the table and achieved 99% coverage in rural areas.

Primary internet access at home is provided mainly by fixed technologies. Among these technologies, xDSL has the largest footprint (93.5%) followed by Cable (42.7%) and WiMAX (19.7%). Fixed coverage is the highest in the Member States with well-developed DSL infrastructures, and is over 90% in all but four Member States.

Overall coverage of fixed broadband increased by 2 percentage points in the last two years, but there was a remarkable progress in rural areas from 79.9% in 2011 to 89.8% in 2013.

Next Generation Access

Graph2Next Generation Access includes VDSL, Cable Docsis 3.0 and FTTP. At the end of 2013, Cable Docsis 3.0 had the largest NGA coverage at 41.2%, followed by VDSL (31.2%) and FTTP (14.5%). Developments until 2012 were dominated by the upgrade of cable networks, while VDSL coverage grew by more than 60% in the last two years. NGA networks are currently very much limited to urban areas: rural coverage is only 18.1%, coming mainly from VDSL.

The UK ranks 9thpresently in the deployment of FTTP, VDSL and Docsis 3.0 cable, total coverage achieved is at 81% with 25% coverage extending into rural areas.

4G mobile broadband availability reached 59%, up from 27% a year ago. 4G has been commercially launched in all but three Member States.

In 2013, deployments of 4G (LTE) speeded up. Nevertheless, 4G coverage is still substantially below that of 3G (HSPA). As of October 2013, close to 60% of Mobile Network Operators in the EU offered 4G services on LTE networks.

LTE deployments in the UK has reached 63 in respect of total coverage by unfortunately none of those coverage has reached rural classified areas as of yet, this places UK ranking in 12th place overall.

There are 30 fixed broadband subscriptions per 100 people in the EU, which corresponds to a take-up of 76%* of homes. The number of subscriptions are still increasing, but the growth rate is low.

The fixed broadband subscriptions market is still on the increase. The growth in penetration stabilised between 1 to 1.3 percentage points per year. The market grew by 5.4 million subscriptions in the last twelve months.

The slowdown is caused by the saturation of the most advanced Member States, as well as a modest migration from fixed to mobile technologies.

Penetration in the EU is higher than in the OECD (27%), and the same as in the US.

Take-up by Member State varies greatly, from 19 to 41 subscriptions per 100 people. Denmark and the Netherlands are among the leaders worldwide, while Romania, Bulgaria and Poland are lagging behind.

Although still very large differences can be observed in take-up across Europe, the coefficient of variation measuring the dispersion among the Member States decreased from 38% in 2008 to 22% in 2014.

The UK ranks 6thin rate of take up with a subscription as a % of the population at 34%, by comparison to the top rated member state Denmark which has achieved 41%.

>30Mbps subscriptions are getting popular, while >100Mbps is still rare in the EU.

An estimated 15% of homes subscribe to fast or ultrafast broadband.

With the increasing availability of NGA networks, fast broadband subscriptions are getting more and more widespread in Europe. Currently there are 6.3 fast broadband subscriptions (offering a headline download speed of minimum 30 Mbps) per 100 people in the EU, up from 2.5 two years ago.

The UK ranked in 11thplace with 9% penetration of subscriptions as a % of population involving fast broadband connections of at least 39Mbps. By comparison the top ranked country is Belgium at 23%.

Take-up of ultrafast (>100Mbps)

This remains marginal at 1.6 subscriptions per 100 people corresponding to 3% of homes.

Ultrafast connections represent only a fraction of fixed broadband subscriptions despite the fact that FTTH/B and Cable Docsis 3.0 networks are capable of delivering such a speed.

Sweden is by far the leader in this product category, with at least 10% penetration of the population using ultrafast broadband.

The UK ranking out of the member states is at 22, with less than 1% ultrafast broadband user population, this is also 9 places lower than the EU average.

The take up of fast broadband (at least 30 Mbps) falls well below the NGA coverage: NGA is available to 62% of homes in Europe, but only an estimated 15% subscribe to fast broadband.

Countries with higher NGA coverage tend to have higher high-speed broadband take-up, but very large differences can be seen across Member States.

wifiOver 70% of subscriptions are xDSL, although xDSL is slightly losing market share. Cable is second with 18% of the market. Fibre to the Home/Building is emerging.

Although DSL is still the most widely used fixed broadband technology, its market share declined from 80% in 2009 to 72% in 2014. The main challenger, cable somewhat increased its share during the same time period, but most of the gains were posted by alternative technologies, especially FTTH/B. Net gains of DSL, cable FTTH/B were in the same magnitude over the last two years.

Competition

Incumbent operators are market leaders in almost all Member States, although their market share is decreasing. During the last eight years, new entrant operators always posted higher net gains then the incumbents. In the last six months, new entrants yielded 80% of the total net gain in the market. This, however, could not result in a large change in the overall market share of new entrants because of the low growth rate of the total market.

Market shares are calculated at the national level for the incumbents and new entrants. However, broadband markets are geographically fragmented suggesting that a large number of homes are served by only one provider (most likely by the incumbent operator in this case).

In the UK, the split has been calculated to be incumbents 33% of the market share with new entrants having the remaining 67% suggesting a perhaps somewhat healthy level of competition?

However new entrant subscriptions remain largely dependent on using incumbent infrastructure (69%) as opposed 31% that are utilising their own infrastructure, which placing the UK ranking 4th from bottom of the table in comparison to other member states, where greater proportions of new entrants have their own infrastructure.

Speeds

Low speed fixed broadband subscriptions are getting marginal: only 3% of all subscriptions have lower than 2 Mbps advertised download speed as opposed to 36% six years ago. At least 10Mbps applies to two thirds of subscriptions, up from 9% in 2008.

CogsFast and ultrafast broadband subscriptions grew by 44% in twelve months. Despite the growth of fast and ultrafast subscriptions, they are still rare in the EU. In January 2014, only slightly more than one in five subscriptions were at least 30 Mbps and only 5.3% at least 100Mbps.

Speeds of broadband products are advertised as “up to a certain Mbit/s”, but there are significant differences between the advertised speed and the actual speed that consumers receive. In the EU, the actual download speed is 76% of the advertised speed. DSL delivers only 63.8% of the advertised headline download speed, compared to 89.5% for cable and 82.7% for FTTx.

As for the xDSL being the most widely used technology in Europe, there are large differences across Member States: 90% of the advertised download speed is attained in Poland, but only 45% in France and 50% in the UK and Ireland.

The UK achieves on average better speeds overall that a good number of other member states, with 17% achieving speeds between 2Mbps and 10Mbps and a decent 83% benefiting from speeds above 10Mbps.

Mobile Broadband

There are 62 active mobile broadband SIM cards per 100 people in the EU, up from 26 three years ago. The growth in subscriptions somewhat slowed down in the last twelve months.

Mobile broadband represents the fastest growing segment of the broadband market, although the growth somewhat slowed down in the last twelve months in terms of active subscriptions. Take-up increased by 15% in 2013 compared to 18% in 2012. 

iPadIn the Nordic countries, there are already more than 100 subscriptions per 100 people, while in Hungary, Greece and Portugal the take-up rate is still below 40%. Most of the mobile broadband subscriptions are used on smartphones rather than on tablets or notebooks.

Mobile broadband is mainly used a complementary connection rather than a substitute to fixed broadband.

The correlation between fixed and mobile broadband take-up remains rather weak in the EU. More than 30% of homes with internet access use mobile broadband, up from 16% in 2010. However, in most of the cases, mobile broadband does not substitute a fixed connection: only 8% of homes with internet access rely purely on mobile technology.

Broadband and Bundle Prices

Prices of high speed broadband access across the EU Member States tend to decrease over time but remain dispersed across Member States.

Broadband access prices remain dispersed across Europe: the median prices (calculated on Purchasing Power Parity) vary between €22 and €102 for a standalone offer with a download speed between 30 and 100 Mbps.

The UK retail prices (EUR PPP) on standalone offers came in under the EU average for 12-30Mbps at €28.63 by comparison tom the average at €36.65 and over the average for 20-100Mbps at €40.29 against the average of €33.99.

Prices of triple play bundles including broadband access, fixed telephony and television has come down considerably since 2009.

The median prices of triple play bundles including broadband access (with a download speed between 30 and 100 Mbps), fixed telephony and television vary between €38 and €90 in the EU.

The UK retail price (EUR PPP) for bundles including broadband, fixed telephony and television average at €62 in line with the overall EU average.

Broadband take-up tends to be lower in countries where the cost of broadband access accounts for a higher share of income.

The correlation between fixed broadband take-up and the relative price of broadband access is negative (-66%), so broadband take-up tends to be lower in countries where the cost of broadband access represents a higher share of the income.

26% of those households without internet access considers the broadband access prices a barrier to take-up, while for 30% the required equipment is not affordable.


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