Study: Broadband a hit in Belgium, Denmark

In Europe, small countries are racing ahead in broadband development, as larger markets are stymied by a lack of competition, according to a study released Wednesday by Strategy Analytics.

At the end of 2003, broadband in Germany, Italy and the United Kingdom reached only 13 percent to 15 percent of homes--half the level of smaller markets like Belgium, Denmark and the Netherlands, the market research company said.

During the next several years, growth will be strongest in Sweden, Switzerland and Belgium, because the markets for telecommunications services are more competitive in those countries. Broadband penetration rates there are predicted to be between 55 percent and 60 percent.

"Europe's smaller countries have demonstrated that loosening the grip of the incumbent telcos is critical to faster, wider broadband adoption," David Mercer, a principal analyst at Strategy Analytics, said in a statement.

The company said broadband will be used as a vehicle to offer combinations of Internet, telephony and video services. The organization said some providers will target one area, but the successful providers will be those who offer multiple services.

Overall, by the end of 2004, Europe will have 33.5 million broadband subscribers, which means that broadband will reach about 20 percent of all homes. This figure is projected to climb to 41 percent by 2008.

Broadband is growing much faster in the United States, where there are nearly 26.9 million subscribers. This figure is expected to grow to about 35 million by the end of the year. Net telephony, online games and home networking are some of the key drivers of this growth.