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.”

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