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European Broadband Driven by Lowest-Price

More people in Europe are basing their broadband service subscriptions on price rather than on whether the service is delivered via fixed or mobile networks. This trend that will have a major impact on how telecom network operators position and promote their services, according to the latest market study by Pyramid Research.

In Europe, the level of competition in each market -- and attractive competitive pricing -- have emerged as the determining factors affecting subscriber broadband purchase decisions.

"The dynamics in the fixed broadband market are shaping those in the mobile broadband segment, and as mobile technologies improve and mature, they will have a stronger impact on the fixed segment," notes Jan ten Sythoff, Manager of mobile content at Pyramid Research.

There is a stronger correlation between GDP per-capita and broadband adoption when cellular and fixed networks are measured together than if fixed and mobile broadband technologies are examined separately, which strongly suggests that subscribers tend to choose between the two when making purchase decisions.

Mobile operators now need to ensure that their broadband packages are positioned competitively with other mobile and fixed broadband offers, while fixed operators also need to focus on both sectors, with pricing and bundling as key differentiators.

Broadband penetration continues to grow across Europe. Fixed broadband penetration rates in a number of countries are high in relation to the levels of income. The high penetration rates are driven by low-cost, unregulated services provided through neighborhood networks or Wi-Fi -- as seen in Bulgaria and the Czech Republic.

In other countries, fixed broadband penetration is low compared with the level of income, and in markets such as Portugal and Austria, mobile broadband has filled the gap left by less than competitive fixed markets.

Growth in mobile broadband can be expected in markets where overall broadband penetration is low. Pyramid expects rapid uptake of 3G in Russia, Slovakia and Ukraine once the networks provide good coverage.

They anticipate limited opportunities for fixed-mobile broadband bundles, because the services are competitive more than they are complementary.

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