Brussels, 04/03/2009 (Agence Europe) - Broadband connections in the European Union increased by 20% during the course of last year to reach 110.5 million connections, announced ECTA (the European Competitive Telecommunications Association that defends the interests of new telecom operators) in its new EU Broadband Scorecard. Today, nearly 22.5% of the population in Europe has broadband connection, ECTA says. According to its report, which sets out key findings until September 2008: 1) highest penetration rates were recorded in Denmark (37.5%) and the Netherlands (36.3%) followed by Sweden (31.0%), Finland (30.8%) and the UK (28.1%); 2) lowest penetration rates at just above 10% were recorded in Poland (10.1%), Romania (10.2%), Bulgaria (10.4%) and Slovakia (10.6%); 3) highest growth rates over the full year were seen in Greece, Cyprus and Malta. Additional competitive impetus from local loop unbundling was particularly pronounced in Greece and Cyprus; 4) fibre penetration was 0.3% on average across Europe. However, some countries had significantly higher fibre penetration including Sweden (5.6% population) and Estonia (4.9%) and Lithuania (4.2%); 5) incumbent operators retained 50% of the total retail broadband market (including resale) or 45% if resale is excluded. The source of most competition in the EU is unbundling of the local loop (44% of all lines supplied by competitors) followed by cable and other parallel infrastructures (36%).
Although ECTA welcomes the progress made in broadband connection in general, it denounces the highly contrasting situation in some member states where former monopolies continue to enjoy preferential conditions. In Spain, in particular, the market has stagnated and is today below OECD and European Union averages, with a rate of broadband penetration of only 20%. This situation is the direct result of dominance by the incumbent, Telefónica, which continues to control the broadband market with a 57% share of individual connections, ECTA says. Spain is a striking example of a member state that needs strong regulation to encourage investment and take-up in next generation networks, as well as to guarantee competition and consumer choice. Innocenzo Genna, ECTA Chairman, explains: “Light touch regulation has not worked in the banking sector and there is no reason to assume it will work to consumers' benefit in telecoms”. He takes the view that incumbents, such as Telefónica, “are primarily focused on increasing profitability at the expense of vital infrastructure investment”. Surveillance of Telefónica by the Spanish regulatory authority CMT is too flexible and the incumbent takes advantage of this to consolidate its position, the new operators criticise. CMT had decided not to force Telefónica to open its optical fibre networks for alternative operators for speeds up to 30 megabytes per second. Such a decision had attracted suspicion from the European Commission at the end of last year, and the CMT has since been sent back to the drawing board. “We have no problem with companies prioritising profitability, (…) However, we do have a problem with healthy companies using the recession as an excuse to blackmail policy-makers into relaxing regulation, with the aim of strengthening their own dominant position further at the expense of competitors and consumers”, said Innocenzo Genna. The situation is very different in the Scandinavian countries and the Netherlands, ECTA says. In most of these countries, incumbents have undertaken to open up their infrastructure, which is not the case in Spain or Germany, the association points out. (I.L./transl.jl)