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Home (/) / Articles (/news-and-views/articles) / European fibre broadband adoption outlook brightens

European bre broadband adoption outlook brightens

Europe | Broadband | Telecoms | Mon Feb 16, 2015
BMI View: New alliances of small fibre network operators pose a modest upside to our bullish outlook for
fibre adoption across Europe. So far, fibre deployment has largely been led by profit-motivated
incumbents which have bypassed rural areas and major business centres in favour of least-cost
consumer markets already served by less effective technologies.

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The European Local Fibre Alliance (ELFA) has been established by 10 member associations from eight
European Union countries with the aim of creating sustainable all-fibre based infrastructures in both urban
and rural areas across Europe. It believes that the European Commission's Digital Agenda Europe 2020
initiative no longer reflects the true appetite for high-bandwidth networks, owing to the recent sharp rise in
IP traffic driven by widespread adoption of high-definition streaming media services. ELFA makes a
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A key proposal includes altering the definition of 'broadband' from 144kps to 25Mbps (downstream) and
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touted as being the only sustainable technological platform to deal with long-term trends.
BMI takes the view that fibre offers the most attractive cost-benefit solution to Europe's 'digital divide'
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has been extended through xDSL and vectoring technologies, these resources will eventually be unable to
support the volumes of rich media content consumers and businesses will be demanding by 2025. Wireless
technologies such as LTE and small cells have proved useful, but the high cost of spectrum and operators'
need to monetise data consumption mean that such services will prove to be more costly in the long term.
We believe that operators should reinvent themselves as specialised service providers and offload their
infrastructure businesses to specialist investors better positioned to monetise these resources and
increase value to end users.
All-fibre networks will be essential for next-generation services such as cloud computing, video presence,
e-health, e-education and smart city applications but, left to the large infrastructure providers, widespread
and affordable access will be a long time coming. BMI believes that Europe's route to all-IP fibre
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Increased cooperation will result in lower equipment procurement costs, increased interconnectivity and
shared in-field expertise that will lower the total cost of ownership to end-users.
New data from the FTTH Council Europe show that the average fibre penetration rate in the EU28
markets reached just 5.8% of households in 2014, with fibre-to-the-home (FTTH) reaching just 3.7% of
homes. The main barrier to adoption is the high cost of fibre connections to consumers, as the large
incumbent telephone companies pass the high costs of wide-scale fibre deployments on to users. Smaller
providers - which include local communities, municipal energy utilities and independent ISPs - operate to
more focused deployment plans and can contain costs, making it more affordable for customers to utilise
their networks. The EU markets with the highest fibre penetration levels tend to be those already served
with extensive electricity, cable TV, water and gas distribution networks along which fibre can quickly be
laid. Lithuania scores highest of all, but is led by fibre-to-the-building (FTTB), a technology that can be
impeded by ageing last-mile connections based on copper cables. The most attractive market, in terms of
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At launch, ELFA is backed by the following companies and associations: Dansk Energi, the Estonian
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Association), France's Federation des Industriels des Reseaux d'initiative Publique (FiRiP), the
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Fibre Laggards And Winners

% Households With FTTH/FTTB Connectivity, By Country

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