European broadband markets continue to witness strong growth, thanks largely to deregulation across the region and the ongoing shift towards integrated services.
The growing demand for highly customised broadband-based services is also a major growth factor, as customers are willing to pay that little extra for high-quality broadband services such as video on demand, pay-per-view TV and other attractive multimedia content.
New analysis from global growth consulting company Frost & Sullivan finds that the broadband market in Europe earned revenues of €27,3-billion in 2006 and estimates this to reach €93,94-billion in 2013.
“As we begin to embrace the era of digital lifestyles, service providers have begun to focus on providing interactive communication services,” notes Frost & Sullivan research analyst Julia Martusewicz-Kulinska. “Even in the more nascent markets of Eastern Europe, commoditisation of access is driving value-added services and triple play.”
The Western European broadband markets are generally much more saturated and mature than the Central and Eastern Europe (CEE) markets. Therefore, the penetration of broadband lines is growing at a higher rate in the CEE region. Over the period 2006 to 2008, the growth rate for the CEE segment of the market is expected to exceed 30 per cent, while the Western European segment will exceed 20%.
However, competition levels are expected to increase as business models are changing and market participants are becoming more competitive and technologically advanced. Developing strategic partnerships that allow them to provide a wider range of services, such as bundled offers and value-added services (VAS), will be also a key challenge for service providers.
“One of the key challenges for service providers is identifying partners who will be able to provide a strategic fit in introducing bundled offers,” explains Martusewicz-Kulinska. “Fixed service providers need to sustain their market position by offering new compelling services and for that, they would usually need to partner with solution providers that specialise in either wireless or content services.”