Fixed broadband: the next chapter

Fixed broadband: the next chapter

The development of broadband has reached a crossroads. Rapid market growth over the past eight years has resulted in mass-market adoption across the globe. Nor has the market stopped growing: there’s plenty of mileage left. But to date, the market has been about connecting a PC via broadband access to the Internet. Going forward, this will change. Broadband is moving beyond the PC and simple Internet applications. It will be about connecting numerous devices, providing consumers with a range of multimedia services in an always-on digital world. This shift will in turn change the broadband access market itself. This report, with a focus on Europe, details these trends, exploring the underlying drivers behind them, and what they mean for the broadband access market and its players.

Table of contents

Key messages

Basic broadband access: further room for growth

Annual growth rate of European subscriptions will be 14% between 2006 and 2011

Broadband access has become a profitable business

Breakeven point for European operators is typically three to four years after deployment

Greater bandwidth demands equals higher costs

Video, not surprisingly, is prime traffic driver

The search for new services/revenues

Broadband and broadband content forecasts
Driving ARPU
Case study: Iliad — broadband innovator

The growth of triple play

The importance of multimedia and entertainment grows
How to differentiate

The move to NGA

Technical hurdles
Cost implications of FTTx

Broadband everywhere

The three-screen strategy
Case study: Orange
Fixed-to-mobile substitution — take two?
The importance of quality

Table of figures

Figure 1 Subscriber forecasts: Europe
Figure 2 The DSL business case
Figure 3 The DSL business case
Figure 4 Network costs as video consumption increases
Figure 5 European broadband and broadband content forecasts
Figure 6 Iliad: financial performance
Figure 7 Triple-play offerings from example cable operator, altnet and incumbent
Figure 8 Increasing differentiation of IPTV
Figure 9 Decreasing loop length, increasing bandwidth
Table 1 Orange: summary of three-screen TV offering
Table 2 Theoretical speed comparisons (premium service) – UK