Western European Internet Access Industry Continues to Reinvent Itself, IDC Says

LONDON – JUNE 8, 2000 – According to the latest research from IDC, the Western European Internet access market continues to grow rapidly, driven by sustained growth in new users, the success of subscription-free and unmetered access services, the emergence of broadband access technologies, and continuing price erosion. Total user spending on Internet access services is forecast to increase at a 28% compound annual growth rate from 1999 to 2004, with great variation between countries and access technologies.


"Growth rates of traditional access methods – dial and leased line – are being eclipsed by the new broadband services – digital subscriber line (DSL), cable modem, and fixed wireless access (FWA)," said James Eibisch, research manager for IDC's European Telecommunications program. "With growth rates of above 300% this year, broadband access will represent one-third of all connections by the end of 2004." In terms of revenues, however, broadband will account for half of all access revenues by the end of 2004, due to its fast take-up as well as the low growth rates and rapid price erosion of the traditional access methods.

Key Market Developments

· Following Freeserve's lead in the United Kingdom, subscription-free access is now widespread in most European countries, although as the pressure is on to develop U.S.-style unmetered access, subscription-free access as it currently exists may be short-lived.

· Unmetered access services are beginning to be offered, initially in the United Kingdom, but will spread across Europe.

· In response to EC recommendations, increasing competition, and a growing disparity between leased line and broadband services, there will be aggressive price cutting of leased line services.

· 2000 will see further high-profile partial flotations of leading ISPs following the examples of Freeserve, Terra Networks, and Tiscali.

· Further local loop unbundling will lead to increased competition in the European Internet access market.

European Internet Access Market 1999-2004 (IDC #HP01G) sizes, forecasts, and analyzes the Western European markets for consumer and business Internet access services via dial, broadband, and leased line connections. This report includes analysis of major recent and current market developments, profiles of leading pan-European service providers, an overview of market, regulatory, and unbundling conditions for 16 Western European countries and profiles of major service providers per country. This report is available to purchase from your local IDC office.

About IDC

IDC delivers dependable, high-impact insights and advice on the future of ebusiness, the Internet, and technology to help organizations make sound business decisions. IDC forecasts worldwide markets and trends and analyzes business strategies, technologies, and vendors, using a combination of rigorous primary research and in-depth competitive analysis. IDC provides global research with local content through more than 500 analysts in 43 countries worldwide. IDC's customers comprise the world's leading IT suppliers, IT organizations, ebusiness companies, and the financial community. Additional information can be found at http://www.idc.com.

IDC is a division of IDG, the world's leading IT media, research and exposition company.

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