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Near saturation in major markets slows down fixed broadband take-up in Western Europe

Strategic Highlights
Published: 2019-05-17

As per InfoCom’s quarterly fixed broadband monitoring, the total fixed broadband subscriptions in the Western Europe region totalled 158m as of end-4Q18 – an increase of 2.6% YoY. This was the slowest growth observed from 2014, mainly reflecting the near market saturation in the major markets (i.e. Germany, France, the UK, Spain, and Italy). Their combined user bases comprise more than 75% of the region. In terms of technology, FTTP subscriptions remained to have the strongest development which came at the expense of xDSL (-2.8p.p. YoY in share); while cable modem remained more or less stable at 19% of the total connections.

Among the markets covered, the strongest take-up was observed in Sweden, Portugal and Greece mainly due to extended reach of FTTP services (Malta and Cyprus registered even higher growth rates but comes from relatively smaller bases). InfoCom observed that aside from expansion initiatives of the local operators, regional fibre network rollouts mainly in remote areas were also carried out in Sweden. As per the monitoring, this scheme helped push further the FTTP household coverage in the country up by 5p.p. compared to a year ago to more than 77%. Portugal Telecom, meanwhile, continued ramping-up its fibre expansions to 5.3m Portuguese homes with ~85% completion rate as of the period; while OTE Greece closed 2018 with 150 000 newly covered premises with FTTH infrastructure, as part of its target of covering 1m households by end-2022. Please note that we also monitored some active network expansions and upgrades in markets with already high fixed broadband penetration, especially in France and the Netherlands, which we attribute to the newly-launched digitalisation and broadband targets in these markets.

Aside from these, InfoCom also noted the intensifying competition mainly among convergent operators which was characterised by heavily discounted broadband plans. Considering the trend, competition-driven discounts on fixed broadband plans are still expected to prompt growths for the following periods, although advancements in 5G may somehow temper these prospects, especially in markets where mobile network coverage is high and mobile broadband is a dominant platform.

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Published: 2019-05-17

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