Smart Phones, Free-Access — Keys to European Internet

Unlike broadcast television and radio, the Internet in Europe is not a
consumer media, according to research presented recently by Jupiter Communications Europe.

The data indicates, in fact, that local telecoms are
currently holding back Internet development and growth of e-commerce.

“Unlike television, the Internet in Europe is not ‘free-to-air’,” said Phil
Dwyer, managing director of Jupiter Communications Europe. “Whereas in the
United States, where Internet users can remain online for hours with no
additional fees, there is a medium to high variable (telecom) cost in Europe
due to per minute charges.”

In a detailed presentation, Dwyer illustrated what effect online charges
have had on European Internet development/usage. In 1998, for instance, the
average user in the U.S. spent 32 hours a week on the Internet, compared to
22 hours a week in Europe. There was an even greater gap between AOL users:
30 hours per week in the U.S. versus 8 in Europe.

These figures become even more dramatic when one considers that there are 50
million more households in Europe than in the USA, yet there are 20 percent less
home computers. Of the European households that do have computers, only 9 percent
are online.

“Europe could have a very good, profitable e-commerce market. Unfortunately
the online charges restrict that,” said Dwyer. “Trying to create a user-free
medium base which drives e-commerce and advertising is essential. Right now,
though, it is restricted by fixed ISP charges and variable telecom costs.”

Italy, Spain, and France lead the European countries with high variable
costs, according to Jupiter.

Not all the data, however, is negative. There is a growing trend towards
free and/or unlimited Internet access, even among telecoms. Additionally,
Dwyer pointed out, the use of ‘smart phones’ will greatly increase European
Internet use through 2001.

“The installed base for smart phones already in existence will provide
no-cost Internet access to millions of users in the near future. Germany,
Italy, UK, France, and the Netherlands will be the leaders in this area,”
said Dwyer.

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