Report outlines Europe's fast broadband growth

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BRUSSELS -- More than two-thirds of European households will have broadband by 2013, according to a report published Friday that discloses there is still huge potential for growth in broadband adoption.

The report, by Forrester Research, shows residential broadband penetration in Western Europe is set to rise by 48 million households over the next six years, from 44% at the end of 2007 to 71% by the end of 2013.

The Netherlands and Scandinavia will remain the broadband leaders, while Germany, the U.K. and France will follow, the research said. At 85% broadband household penetration by 2013, the Netherlands, Denmark, Norway, Finland and Sweden are set to continue their past years of broadband dominance.

The U.K. should be about 82%, Germany at 72%, and France 69%, the report said. But Italy, Spain and Portugal will continue to be among the European broadband laggards, reaching only 58%, 61% and 55%, respectively, by end of 2013.

"The addition of 48 million new broadband connections may seem a healthy opportunity for broadband suppliers, but our forecast reveals the key challenge for ISPs will be managing customer churn," Forrester analyst Pete Nuthall said. "In 2008, we estimate the level of churn to be 23% across Western Europe. This will peak in 2012 at 31%."

The report said the most at risk from the changes will be incumbents such as BT, France Telecom, Deutsche Telekom, and KPN, due to regulatory action that force them to open up their networks to competition.

By 2013, any remaining dial-up services will be marginalized -- 98% of online access will be via broadband, the report said. New access technologies, including WiMAX and fiber-to-the-home, will become more prominent, growing from 2% of all broadband households in 2008 to 8% in 2013, the report said.
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