Euro broadband adoption picked up the pace in '06

Top performers outdistance Asia, U.S.

The broadband industry is now worth €58.5 billion ($78 billion) in the European Union and growing at 8.5% a year, according to a report published Thursday by the European Commission (HR 3/30).

The report reveals that more than 55,000 broadband access lines were installed in European households every day in 2006, raising the penetration rate to 15.7% from 11.4% in 2005. In all, more than 20 million broadband lines were added last year, a 39% increase from 2005. There were 72.7 million broadband lines at the end of last year, up from 52.6 million in 2005 and 19.4 million in 2003.

The Netherlands (29.8%) and Denmark (29.4%) now have the highest broadband penetration rates in the world, topping South Korea (26.4%) and Japan (19%), while seven EU members have higher broadband penetration rates than the U.S. (19.2%).

However, the gap between the best and worst performers continued to widen. In eight EU member countries, the adoption rate is less than one in 10, and at the bottom, Greece and Slovakia have penetration rates of just 3.3%.

Broadband transmission speeds also vary across the EU, which on average still lag behind the U.S., Japan and Korea. This is due partly to the high population density in Korea and Japan as well as the presence of more high-capacity cable networks in the U.S. compared with several major EU countries.

The EC said the report reveals how open-market competition is the best spur for broadband growth.

"Countries where regulators have imposed access obligations on the incumbent operator's networks and where infrastructure-based competition has started to unfold are seeing the highest growth rates," the commission said. "Effective market regulation permitting access to the incumbent's infrastructure also stimulates competition, and decisive regulatory action in France and the U.K., for example, has clearly been important."