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News : Irish Last Updated: Apr 24, 2009 - 5:31:05 PM

Ireland still the broadband poor relation to Europe's knowledge economies - Denmark, the Netherlands, Sweden and Finland
By Finfacts Team
Feb 26, 2008 - 12:14:51 PM

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The pro-competition body ECTA - European Competitive Telecommunications Association - has  called for stronger powers for regulators to implement competition rules, as it publishes the results of its twice-yearly survey on broadband take-up and competitiveness in Europe. The survey shows that while one in five people (20%) in Europe now subscribe to a broadband connection, competitive impetus has reduced across Europe, with the retail market share of incumbents persisting at close to 50% and slow growth of 10% in broadband connections.

The survey also reveals that there is a serious threat to the primary source of competition - local loop unbundling - as incumbents seek a moratorium on unbundling next generation fibre access lines. If granted, this could result in incumbent operators controlling a staggering 80% of broadband lines across Europe or even close to 100% in many countries.

The survey puts Ireland 12th in a list of 15 countries in Europe - ahead only of Italy, Portugal and Greece. We are still far behind countries such as Denmark, the Netherlands, Sweden and Finland.

The report says Ireland experienced the third highest growth in uptake in the region at 17% but these figures include data for mobile broadband, which would not be considered for official OECD figures.

Innocenzo Genna, Chairman of ECTA said, "People often do not realise that the choice they have of broadband provider and speeds and prices available depends on how effectively the regulator has opened up the last mile of the network to competitors. Policy-makers 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 Competitive Telecommunications Association (ECTA), the organisation representing competitive providers, believes that the European telecoms market is reaching a critical stage as the existing legacy copper network is gradually replaced partly or wholly with next generation fibre lines.

Genna added, "Because fixed networks are particularly expensive to build it is not always economical to duplicate the last mile – the line going into each home – because it will push up the retail cost of broadband and may not be justifiable to financial investors. Instead what we need is a mechanism to share bottleneck access infrastructure on an equal basis. Functional separation could be a way to enforce infrastructure sharing rules more easily."

The survey reveals that countries with the highest broadband take-up including leaders Denmark and the Netherlands, as well as Sweden, Finland and the UK, have all benefited from competition through effective unbundling of the local loop. These countries are amongst the best broadband performers in the world today.

The worse performing countries include Italy and Poland, where the incumbent operator enjoys 64% and 59% of the retail market respectively. Broadband penetration levels in Italy grew at just 3% in the last 6 months and now ranks the lowest of largest EU economies. In Poland, penetration rates of 7% are less than half of the EU average and local loop unbundling – despite being ‘mandated’ for several years – remains elusive. Regulators in both countries are actively pursuing functional separation as a remedy for the incumbents’ dominance.

ECTA urges the European Parliament and Council to approve measures proposed by the European Commission in its Review of the Telecoms Framework, which would strengthen regulators’ powers to ensure effective sharing of telecom bottlenecks, which are critical in boosting Europe’s competitiveness. Functional separation is one tool that could be used to address enduring barriers to competition in the sector. In the UK, it has contributed to the unbundling of 4 million lines in just two years, a boost in infrastructure investment by competitors, lower prices and a dramatic increase in broadband speeds.

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© Copyright 2009 by Finfacts.com

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