B'band growth slowing down in Europe

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BRUSSELS -- While one in five people in Europe now have a broadband connection, the growth rate slowed in the second half of 2007, the European Competitive Telecommunications Assn. said Monday.

Total broadband lines increased from 84 million lines in the first half of 2007 to 92 million lines in the second half of the year, but this represented a slowdown in actual growth from 16% to 10%.

The figures have stoked fears that Europe will fall far behind rivals in exploiting new digital technologies that combine high-resolution with multiple channels and interactive services.

ECTA's survey revealed that countries with the highest broadband take-up -- Denmark (34.5%), the Netherlands (33.9%), Sweden (29.5%) and the U.K. (24.9%) -- all had vigorous market competition. ECTA, which represents telecom, cable and ISP newcomers, said that the worst-performing countries included Italy and Poland, where incumbent operators enjoy 64% and 59% of the retail market, respectively. Broadband penetration levels in Italy grew at 3% during the last six months of 2007, and it now ranks at the bottom of the largest EU economies.

The survey said that incumbent operators -- the former state-owned telecoms monopolies -- currently hold nearly 50% of the broadband retail share in the EU. They are seeking a moratorium on opening up the market, and ECTA said that if this is granted, it could result in incumbents controlling a staggering 80% of broadband lines across Europe and nearly 100% in many countries.

"People often do not realize that the choice they have of broadband provider and speeds and prices available depends on how effectively the regulator has opened up the network to competitors," ECTA chairman Innocenzo Genna said. "Policymakers ignore this at their peril because the choice we have today may be gone tomorrow if we do not act to keep telecoms markets open, and Europe's competitiveness is at stake."

The European Commission in November proposed giving national regulators the authority to force former monopolies to legally split from their physical transmission networks to give competitors equal access, as a remedy for persistent competition problems. ECTA backed the plan, saying that the impact was particularly pronounced in the U.K., where such a separation in January 2006 led to an explosion of triple play offers such as telephone services, Internet and TV.
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