Europe seeing strong broadband growth

Customers appear willing to pay extra for high-quality broadband services

Broadband markets across Europe are seeing continued growth in all areas, according to recent research by Frost & Sullivan.

The Broadband Market in Europe report attributed the growth to deregulatory initiatives across the region and the ongoing shift towards integrated services such as triple- or quad-play.

Frost & Sullivan said that another major growth factor is growing demand for highly customised broadband-based services.

Customers appear willing to pay extra for high-quality broadband services such as video-on-demand and other multimedia content.

"As we begin to embrace the era of digital lifestyles, providers have begun to focus on providing interactive communication services," said Julia Martusewicz-Kulinska, a research analyst at Frost & Sullivan.

"Even in the more nascent markets of Eastern Europe, commoditisation of access is driving value-added services and triple-play."

Western European broadband markets are generally much more saturated and mature than the Central and Eastern Europe markets, and the penetration of broadband lines is growing at a higher rate in the this region.

Growth rates for the Central and Eastern Europe segment are expected to exceed 30 per cent from 2006 to 2008, while the Western European segment will exceed 20 per cent.

However, changing business models and new players in the market are expected to raise competition levels in the coming months.

Frost & Sullivan believes that providers must look to strategic partnerships in order to provide a wider range of services, such as bundled and value-added offers.

"One of the key challenges is identifying partners that can provide a strategic fit in introducing bundled offers," explained Martusewicz-Kulinska.

"Fixed service providers need to sustain their market position by offering new compelling services for which they would usually need to partner with solution providers that specialise in either wireless or content services."