A report from analysts, Forrester Research, claims that 27 million Europeans will have broadband Internet access by 2005.
The report, released on Tuesday, predicts that, while only 0.2 per cent of European households had broadband access in 1999, this will grow to 18 per cent by 2005, as telecom monopolies are broken up.
The report also claims that the emergence of broadband will require operating strengths that independent ISPs don’t have, forcing a major industry shake-up that will favour telecom and cable companies.
Lars Godell, a Forrester Research analyst, says: "Competition will radically expand coverage as cable and telecommunications firms battle it out. Forrester expects access prices to sink below $30 per month in ten of 17 European countries by year-end 2002."
The report says that, while a souped-up Internet experience will help drive the emerging industry, the growth of broadband will be stimulated by content providers. Godell predicts victims to the shake-out: "The new economics focused around scale, scope, and brand strength will change Europe's Internet-access landscape: Established telcos and their ISP affiliates will crush cablecos like chello, independent ISPs like Freeserve, and broadband pure plays like B2."
The company’s research shows that Scandinavia will match the US in 2005 with broadband penetration levels between 36 per cent and 40 per cent of households. Deutsche Telekom's forceful response to an unbundling threat will drive Germany's broadband penetration to 25 per cent by 2005. UK broadband will draw 20 per cent of households, while only 11 per cent of French households will enjoy the technology. The Netherlands will closely follow Scandinavia, with broadband penetration hitting 28 per cent, partly due to stiff competition between cable and ADSL. Will this mean the Queen Mum will get to enjoy video-on-demand, in a lifetime that began before television?
Forrester expects cable modems and copper technologies like ADSL to share 80 per cent of the total European residential broadband market by 2005, with ADSL in the lead with 53 per cent of all broadband connections.
The report, called European Broadband Takes Off has been compiled from information taken from executives in the telecommunications, cable and Internet industries from 59 companies in 17 countries.