-->
Take the Secure Streaming and Broadcast Workflows Survey & You Could Win a $250 Amazon Gift Card

New Analysys Study Predicts Slow Broadband Rollout in Europe

A new study by the research firm Analysys (www.analysys.com), points the finger at insufficiently robust regulation and obstructive behavior by incumbent telecom operators as the reason broadband has not spread across the EU at its previously predicted rate. The report speculates that this will, in turn, threaten to hinder the development of e-commerce and the digital economy in Europe.

DSL relies on new entrant operators and ISPs being able to install their own high-speed digital equipment at the local exchanges owned by the incumbent operators. These new entrants also need to lease the copper wires that connect to customers to complete the unbundling of the local loop. The report believes that the negotiations of terms and conditions between incumbents, regulators and new entrants, each with incompatible negotiating outcomes in mind, are exposing a fundamental culture clash in this process.

The report suggests that incumbent local exchange carriers (ILECs) need to be aware of the fact that they stand to gain financially from the unbundling process, as ILECs will gain revenue streams from providing the unbundled copper and co-location facilities. The cooperation of the ILECs will help the DSL local exchange carriers (DLECs), win customers and increase their revenue. While incumbents may stand to lose market share at the retail level, the report suggests that competition in the local exchanges will increase the overall size of the market by providing choice.

The report suggests that many potential DLECs are reassessing their options, as the negotiation process with the ILECs normally places several conditions upon the transaction. The nature of the unbundling process combined with 'conventional' market uncertainties, such as rapid technical change, are increasing the downside risks DLECs face.

"If terms and conditions for new entrant operators are too onerous they will increasingly look to other access technologies, such as wireless local loop (WLL), to provide broadband access to their customers," says Ian Scales, lead author of the report.

To support the reports findings, Analysys sites evidence supplied by Global Crossing and MCI Worldcom. Both have announced that they have no current plans to participate directly in the unbundling 'process' in the UK. Those that remain are increasingly downbeat about their likely speed of deployment and their ability to provide competitive services. Most recently, KPN Qwest announced that it intended to scale back its deployments across Europe, reducing its initial target for next year of 1800 central offices to just 300.

Streaming Covers
Free
for qualified subscribers
Subscribe Now Current Issue Past Issues