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Operators To Battle For Share Of Eur80 Billion Broadband Home Market, Says Analysys (28/1/2004)

Fixed and mobile telecoms operators in Western Europe face a battle to win a share of the lucrative broadband home market, which is forecast to be worth up to EUR80 billion in 2008, according to a new report from Analysys, the global advisers on telecoms, IT and media.

"While the major share of the market will go to consumer electronics companies, content owners and packagers, broadband operators could generate up to EUR10 billion by providing broadband home services such as communications, entertainment, IT and security services," said Margaret Hopkins, author of the report. "These services could be delivered over the fixed broadband Internet, but many of them could equally well be delivered over broadcast TV networks using mobile phones to provide interactivity."

The new report, Delivering the Broadband Home. New fixed and mobile services and devices: forecasts 2003-2008, examines two scenarios. In the first, the broadband Internet service providers gain up to EUR30 per month in revenue per household or a total of EUR10 billion in 2008. In the alternative scenario, the mobile operators and broadcasters take most of this revenue and mobile operators are able to add up to EUR1.8 per month to consumer ARPUs or a total of EUR4 billion in 2008.

"The scenario which comes to dominate will depend on the outcome of four key uncertainties - the appeal of services, plug-and-play standards, the development of open platforms, and partnerships," added Hopkins. "There has been a tendency to assume that many broadband services will be offered over fixed networks, but it is increasingly obvious that some could also be delivered using mobile, especially if the mobile operators form partnerships with broadcasters."

The decisions of established players in the market are critical - of particular influence will be the partnership choices made by content owners. Disney and Sony might look like obvious candidates to play a powerful role but, according to Analysys, there are other established players that could shape this market, including News International, Vodafone, Nokia and Microsoft.

"The two scenarios illustrate the fact that very different outcomes are possible," added Hopkins. "No player can afford to watch while the broadband home evolves. Telecoms operators, consumer electronics vendors and content owners must proactively try to shape the market to their own advantage."

Communications will remain the leading source of revenue for telecoms players, contributing, for example, EUR4 billion in 2008 for fixed operators in the broadband scenario - with entertainment and IT services contributing EUR2.5 billion each and new services, such as home security, providing the balance.

Written by Margaret Hopkins, the new report assesses the size of the potential market for broadband home services, examining the different experiences of country markets (France, Germany, Italy, Spain, Sweden and the UK) and the decisive factors that will determine which players will benefit from the growing possibilities of consumer communications and entertainment.

www.analysys.com