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EU Sets 30 Percent Broadband Target For 2010

The European Commission wants to raise broadband Internet penetration in the European Union to 30 percent in 2010 from 20 percent today in an effort to drive economic growth, its top telecoms regulator said on Wednesday.

Information Society Commissioner Viviane Reding said only eight of the bloc's 27 member states were ahead of the United States in broadband use, with Denmark, Finland, the Netherlands and Sweden having nearly a third of homes hooked up.

"These EU countries, together with the United Kingdom, Belgium, Luxembourg and France, all had broadband penetration rates higher than the United States in July 2007," Reding said in her annual update on competition in telecom markets.

Broadband use in Europe reached 20 percent overall, still lagging the 22.1 percent in the United States.

Reding said she wants broadband penetration to hit 30 percent by 2010 and that her proposed reforms of the telecom market would help the bloc reach this target.

Reding sees increasing the use of broadband as key to boosting competition in the retail sector, offering consumers more choice and driving down prices.

Broadband is also seen as key to helping set up new businesses, particularly in more-remote regions.

She said she was confident that her reforms, now before the European Parliament and EU states for approval, would be adopted by April 2009 when parliamentary business winds down ahead of European elections in June.

The EU's 300 billion euro ($470 billion) telecom market grew 1.9 percent last year when it saw investment up for a fifth year running, which showed EU telecom rules were having an impact on boosting competition, Reding said.

"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," she said in reference to former state-owned monopoly operators such as Deutsche Telekom and France Telecom.

Reding said the charges levied by one mobile phone operator for handling another's calls were far too high and needed tackling.

Investment in telecoms in the EU last year was over 50 billion euros, in line with the United States and higher than in China and Japan combined, she said.

Some 19 million broadband lines were added in the EU in 2007, the equivalent of more than 50,000 households every day in a sector that generated estimated revenues of 62 billion euros.

Former monopoly operators have accused Reding of wanting to overregulate and make it harder to justify investment, but new entrants welcomed her comments on Wednesday.

ECTA, a lobby which represents new entrants, said incumbents just wanted to protect their strong market shares.