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27 Million European Broadband Users in 2005, Say Researchers

[London, ENGLAND] According to analysts at Forrester Research, 27 million Europeans will have broadband access by 2005.

The latest projections will be encouraging to content providers with streaming media, Internet TV, and other bandwidth-hungry applications, but there could be dire implications for the Internet access industry, warns Forrester.

"To date, broadband has been unavailable, unaffordable, and uninteresting to Europe's masses -- but change will come fast," claimed Lars Godell, analyst for Forrester Research B.V.

Godell predicts a battle between cablecos and telcos, resulting in faster development of the broadband infrastructure and a subsequent lowering of prices. He said Forrester expects access prices to sink below 30 euros per month (US $29) in 10 out of 17 European countries by the end of 2002.

In 1999, just 0.2 percent of European households had broadband Internet access, but the numbers are now beginning to grow. Scandinavia leads the way and is expected to match the United States in broadband penetration with levels of between 36 percent and 40 percent of households in 2005.

Other nations, however, will lag quite a long way behind Scandinavia and Holland.

While stiff competition between cable and ADSL will push the broadband industry in the Netherlands to reach 28 percent of households, Forrester estimates that Germany will achieve 25 percent and the U.K. 20 percent, but France will be limited to just 11 percent of households with broadband access in 2005.

Forrester believes that broadband will trigger a huge shakeout in the Internet access industry, owing to the size of investment needed to bring it to the consumer.

"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," warned Godell.

Forrester interviewed executives from 59 companies in 17 countries for the report, entitled "European Broadband Takes Off."