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Divided Europe: Motorola reveals nations split over broadband (17/7/2006)

Motorola research shows UK lags behind the rest of Europe in broadband application awareness and adoption, France and Germany lead awareness of VoIP, Italy and Spain lead on video calling, downloading content and desire for Fixed Mobile Convergence

Motorola Inc. (NYSE:MOT) today published the results of an independent research report* that highlights the growth of the digital home across Europe. The report reveals changing dynamics in the home broadband market and has unearthed varying degrees of consumer awareness, take-up and demand amongst different countries. 2,500 respondents were surveyed across, France, Germany, Italy, Spain and the UK.

ÒThe regional variations demonstrate the necessity for Network operators to now pay closer attention to new consumer trends and ensure smarter, faster and more sophisticated infrastructures are in place to support growing consumer demands,Õ said Karl Elliott, marketing director, Motorola Connected Home Solutions EMEA.

In countries such as Italy, Spain and France, operators have spurred adoption by bundling broadband with other services such as voice and Internet Protocol Television (IPTV), while the UK lags behind the rest of the continent in awareness, uptake and desire for a number of broadband applications.

ÓDriven by falling prices and new services, the European broadband market continues to grow at breakneck pace. In total Europe added 20 million new broadband households last year, twice as many as were added in America in 2005. By the end of the decade we project that there will be 134 million broadband subscriptions in Europe, representing more than 61 per cent of all households in the region. This will create a fertile ground for selling value added services to connected consumers,Ó said Martin Olausson, Senior Analyst at research firm Strategy Analytics.

Key Findings per Country

á France - highest awareness of VoIP (93 per cent) and UK the lowest (77 per cent).

á France - strongest uptake of VoIP, with 52 per cent of those aware of VoIP already using it, compared to 17 per cent in the UK.

á UK - majority (65 per cent) are unwilling to give up their landline for a comparable broadband voice solution, while 77 per cent of Italians were very open to not having a landline as long as they had broadband.

á People are ready for FMC - the idea appeals to the majority of respondents. Ranked highest in Spain at 91 per cent, and was least popular in the UK at 65 per cent.

á Italy and Spain - download more music videos than any of the countries surveyed.

á Spain - downloads more music than any of the other countries surveyed.

The research indicates that the availability and desire to take advantage of the latest broadband applications is transforming the way people purchase their broadband. Where in the past price has been the key factor, the survey identifies that speed is now the top concern with approximately 58 per cent citing this as their reason for subscribing to their selected broadband service. They identify quality as the second most important factor (17 per cent), followed by the freedom broadband brings to effortlessly access content such as movies and games (14 per cent). Price was only a top concern for approximately 9 per cent of respondents.

Voice over Internet

The research revealed that voice over the Internet has clearly hit the mainstream, with a majority of respondents across Europe aware that calls can be made via broadband. France, Germany and Italy demonstrated extremely high levels of awareness, with over 90 per cent of respondents aware of VoIP, while there is less awareness in Spain (79 per cent) and the UK (77 per cent).

Despite having less VoIP awareness, Spain demonstrated the strongest understanding of video calling, with three quarters of respondents aware they can make face-to-face calls via broadband.

France is the country with the most VoIP enthusiasts - over half of those aware of VoIP are already using it and a third of those aware of video calling already using it.

The UK is most reluctant to give up their landline when provided with a comparable broadband voice solution. 65 per cent of respondents are unwilling to substitute, compared with 23 per cent of Italians.

Fixed Mobile Convergence

With an eye on the future, European consumers seem to be ready for FMC. Spain appears to be primed, with 91 per cent finding appeal in the idea of saving money by automatically routing mobile calls through to their broadband connection when entering their home or office. Italy also demonstrated a readiness with 85 per cent of respondents saying it was appealing. UK respondents are currently the least excited about the potential cost savings and convenience of FMC, with 65 per cent finding it appealing.

IPTV

While there appears to be a gap in consumer understanding of the benefits of IP telephony, they are eager about the promises of IPTV. A strong majority of respondents would prefer to watch TV and movies via the internet rather than being restricted by set broadcast schedules, with Spain the highest at 90 per cent and Italy a close second at 89 per cent. Germany is least willing to pay a premium for on-demand services, with only 31 per cent willing to pay extra for a high quality service to download music, TV programmes and movies. The UK is also unsure about paying extra, with only 34 per cent interested.

Spain is three times more likely to download movies than the UK.

Downloading Music and Video

While consumers are yet to fully embrace the array of options available via broadband, they are becoming experts in the downloading of music and videos. Likely driven by the take-off of MP3 players, music is clearly the most popular download across all five European countries when compared to downloads such as movies, music videos and TV. Spain is the highest at 87 per cent and the UK next at 85 per cent. If music is any indicator, we can expect consumers downloading of movies, music videos and TV programmes to escalate in the near future. Highlighting distinct regional differences in download patterns, the French are most likely to download TV programmes (40 per cent), but least eager to download music at only 64 per cent.

Multi-play

There is generally strong interest across Europe to deal with a single service provider for voice, internet and TV. The research found that the UK is least interested, with the idea appealing to 72 per cent of respondents, compared to Spain with 94 per cent. Of those respondents that want a single provider, a majority of countries stated that the price of a bundled package would be the deciding factor. Across Europe, consumers seem to have bought into the idea of the ÔConnected HomeÕ, with the majority agreeing that the computer will become the centre of home entertainment.

* Research conducted by Vanson Bourne

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