By Matt Broersma, 16 January 2004 15:19
NEWS Broadband services have begun to eat away at the traditional dial-up market in most Western European countries, but dial-up services will be a significant market for some time to come - and are continuing to grow in some countries - according to research published by IDC on Thursday.
The slow decline of dial-up and the steady growth of broadband will add up to substantial growth in overall consumer Internet connections through 2007, IDC projects. It sees broadband increasing at 36 per cent CAGR (compound annual growth rate) to nearly 50 million connections over the next four years. Consumer dial-up connections are projected to decline by nine per cent a year from 52.5 million connections at the end of last year to 34.2 million in 2007.
Migration to broadband in the UK has been steady but slower than in some other European countries, such as the Netherlands, said analyst Chris Drake. This is in part because the introduction of flat-rate dial-up services created a low-cost, simple way for large numbers of people to get online, and many of these users see no reason to switch to broadband.
"There is a very large sector of the population of internet users who don't see any need to move to broadband based on their usage, and on the amount they would pay for a broadband connection," Drake said. "Prices are still considered relatively high."
He also noted that there are psychological hurdles to switching for many users, with the process of getting a broadband connection considered complicated by some.
IDC sees UK broadband growth accelerating this year or next year, but success depends largely on whether ISPs can convince dial-up users to make the jump. "More work is needed to convince dial users of the benefits of broadband," he said. "There is a need for ISPs to consider offering content services to dial users, to whet their appetite, and give them an insight into how they could benefit from a faster connection."
Drake noted that while dial-up is on the decline generally, it actually has a strong growth potential in some countries that don't yet have flat-rate services, such as Belgium. Ireland only introduced flat-rate dial-up last year. "In countries where flat-rate dial doesn't exist, online household figures tend to be low," he said. "There is a case for introducing flat-rate into those countries, as there are sectors that have not yet been tapped into."
Overall Internet penetration in Western Europe will grow from 44 per cent in 2003 to 52 per cent in 2007, IDC projected, with the UK rising from 56 per cent to 64 per cent. Penetration in France will grow from 36 per cent to 46 per cent and in Germany from 47 per cent to 53 per cent. UK penetration is higher partly because of the earlier introduction of flat-rate services, Drake said.
Matthew Broersma writes for ZDNet UK
Comments
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1. Peter Gregory
BT should publish a schedule for the completion of broadband rollout in rural areas.If people could get it without any fuss take up would increase dramatically.
2. Arnold
Well the government wants 'broadband britain' yet aren't putting any pressure on BT to get the country enabled e.g Stupidly high trigger levels in rural areas. Its about time BT pulled there finger out and made the changes other countries did years ago
3. anonymous
I don't see why we should have to pay £25 for a 512mb broadband connection when the US can pay $15 (£10).
Oftel & the government need to force BT Retail to drop their broadband prices to a similar amount.
4. Lindsey Annison
Many of us feel that mass market ADSL (ie 512kbps/128kbps)is not broadband - after all, it's a hugely backward step from 1984 when broadband was >2Mbps.
Reliance on copper is not the answer, we need a strategy towards lighting the fibre and using wireless to complete the first mile in those areas where fibre at this time is not an option eg deeply rural and remote areas. For instance, here in Cumbria we have fibre 10 miles away (and less) down the M6 corridor, and are having to use copper backhaul solutions whne we should be able to use fibre to give true broadband.
Waiting for BT to extract the last few pennies from an elderly copper network is not good for Britain - the economy or the social fabric.
Education about what is broadband should be the responsibility of the Govt and is required top down eg in Govt, in industry and to the end user, who at the end of it is the most important part of the entire network
5. Guy Jarvis
I totally agree with Lindsey's comment.
BT understandably spends millions to spin the argument "Broadband = ADSL = Broadband" in order to obtain the best return for BT shareholders for the lowest investment aka retro-fitting 19th century technology, twisted pair copper, with DSLAMs.
As the operator of the world's largest LW wireless mesh network, Neoeon wants to offer its customers 10Mbps service now - this is not possible yet to do in rural areas simply because affordable IP transit does not exist (at least from BT...)