The UK will not be alone in experiencing an infrastructure-based revolution in broadband access, as the number of ULLs in Western Europe will grow from 10.9 million at June 2006 to 28.6 million by the end of 2010, according to a new report., The Competitive Dynamics of DSL in Western Europe: prospects for local loop unbundling and bitstream, published by Analysys.
“Local loop unbundling (LLUB) is one of the big successes of 2006, across Western Europe,” says the report’s co-author, Martin Scott. “However, LLUB could potentially become a victim of its own success. Exchanges are becoming overcrowded and, as incumbents begin to fight back with more competitive wholesale offers and cabinet-based DSL, as in the Netherlands, the balance of power may shift back to incumbents. The true landmark figure in the UK is not 1 million unbundled lines but 1.5 million – that’s when BT will restart the battle for the local loop,” adds Scott.
Key findings from the new report include:
- Alternative operators will continue to evolve towards infrastructure-based strategies in order to improve profit margins, leading to 24.2 million fully unbundled local loops in service by 2010 (a 437% increase on 2005 figures).
- Incumbent operators will retain over 50% of the retail DSL market to 2010
(down from 56% in 2005) as fixed voice revenues slide, giving incumbents
little choice but to competitively cut rates and offer new services. - Wholesale access products to third parties may continue to represent up
to 18% of the DSL market, or 16.4 million lines (a drop of only 7.9 percentage points from 2005), to 2010 if bitstream were to evolve in both pricing and value proposition, as detailed in the report.
This new report looks at the market drivers and key trends in local loop pricing and the demand for the services that it enables, and examines the outlook for retail and wholesale broadband services across the spectrum. It considers the outcomes of alternative and incumbent network strategies and also the role that mobile and satellite operators may play in the broadband market. It identifies the present and future pricing issues and regulatory complications of unbundling, describing how they will shape the Western European market to 2010 in terms of both retail spend and subscriber numbers.
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