The European Commission recently provided an update on the implementation of the national broadband plans in the EU-27 countries, along with Croatia, Norway and Switzerland.
For reference, the Digital Agenda for Europe (DAE) required all Member States to devise and make operational by 2012, national broadband plans which would enable the EU to meet the broadband targets for Europe by 2020. Those targets are as follows:
Basic broadband (512kbps to 4Mbps) to all by 2013
Fast broadband by 2020: broadband coverage at 30 Mbps or more for 100% of EU citizens.
Ultra-fast broadband by 2020: 50% of European households should have subscriptions above 100Mbps.
To date 22 Member States have national broadband plans, with the remainder either in review or in the drafting process.
Current Status
Table 1 provides a summary of the current status of EU National Broadband Plan Targets
Table 1: EU NBP Targets
Basic Broadband
As shown, the majority of Member States will support 100% basic broadband by 2013, with the exceptions of Bulgaria and Romania, which have set 2015 as their target date.
Next-Generation Access (NGA)
To date, 21 Member States have defined quantitative coverage for NGA with downstream speeds ranging from 25Mbps (UK) to 1Gbps (Luxembourg), while 8 have subscribed to full DAE targets. Little attention was directed towards upstream speeds with the exception of Finland (100Mbps) and Luxembourg (500Mbps).
According to the report, the most quoted reason for lack of NGA commitments was “there are not many applications which would require NGA bandwidths in the foreseeable future”. These same operators also point to low take-rates in areas where ultra-fast connections are already available – such as France where FTTH penetration is at 13.5% and KPN which has penetration of 12.5%.
NGA does not equal FTTH
It is important to note that the EU continues to take a technology neutral approach towards NGA – its does not specify a technology, rather leaving that up to the individual operator to determine the best possible solution based on various factors.
As such, there are multiple technologies that can support the goals of the DAE as shown below and many operators will likely take a multi-step approach towards full FTTH deployment, including interim steps of upgrading to FTTC/N+ VDSL2 with the possibility of implementing vectoring capabilities to increase bandwidth.
Facilitating Investment
Per the report, the EU states that facilitating investment to close the gap between the amount that operators plan to invest in network infrastructure and the investment required for achieving DAE targets is paramount. As such, many National Regulators are in the process of doing studies that look at the ROI of NGA investments – particularly FTTH.
Of course, the key to all of this investment is take rates – or in the EU’s terminology “demand stimulation”.
Although many countries have been active in implementing programs to increase the availability of broadband services; few have engaged in activities to increase demand (a key failure of the U.S. National Broadband plan) – and this is especially true of NGA networks.
This brings about a Catch-22 scenario. Operators don’t want to deploy these networks because consumer demand is low – since there are few applications and services that require this type of bandwidth. Unfortunately, by the time consumers “need” these types of networks – it will be too late or the investment will take even longer to pay itself back.
EU Conclusion
Although the Commission appeared satisfied (I will not go so far as to say happy or thrilled) with the current status of NBPs, there is concern about the sustainability of some of the broadband plans due to the lack of measures aimed at demand. It is believed that if more plans focused on the demand side – the business case for the investment side would prove to be more viable.
The Commission stated it will perform another analysis of this type by the end of 2013, with a special emphasis on NGA.
The full document may be accessed here: http://ec.europa.eu/information_society/newsroom/cf/itemdetail.cfm?item_id=7948