The ten newest countries to join the European Union are poised for rapid growth in high-speed Internet use, Yankee Group analysts predict.
The analysts observe that local political support in the new member states, healthy market competition and an 'up-and-coming' middle class should drive such broadband adoption.
The ten new countries had an overall household broadband penetration rate of 1.9 per cent at the end of 2003, compared to 12 per cent in the other 15 member states. Yankee predicted that the new members could catch up with their neighbours or overtake them over the next five years.
Three names lead the pack
The ten states: Cyprus, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, the Slovak Republic and Slovenia represent a geographically dispersed and varied group in terms of technology development and adoption, but all share EU ambitions, Yankee notes.
Now that they have joined the union, the new entrants must adhere to EU regulations concerning competitive telecommunication services, and implement rules on local loop unbundling, for instance. Given these incentives to equalize competition in their markets, as well as a healthy dose of EU funding for technological development, the accession countries are in a position to make up for their currently lagging broadband usage rates.
Predictions are particularly positive for the more developed countries among the new members, such as the Czech Republic, Hungary and Poland. These three countries each had a 2 per cent penetration rate at the end of last year but are estimated to grow to around 17 per cent at the end of 2008, buoyed by the wider rollout of cable TV Internet access and lower prices for DSL (Digital Subscriber Line) services, Yankee said.
Hungary, the Czech Republic and Poland account for 90 per cent of the phone lines in the new accession region, and Poland alone accounts for 50 per cent of phone lines, Yankee said.
Other countries face greater challenges when it comes to catching up, however. Slovakia, for instance, has only recently begun offering broadband, and Latvia, Lithuania, Malta and Cyprus all have average broadband penetration rates but are small and offer few opportunities for outside providers, Yankee said.