Category: Europe

European Broadband Pricing Drops 23% in 2004

A new report, the European Broadband Pricing Report, researched by Quantum Web and distributed by BroadGroup, shows European broadband pricing (of speeds between 0.5Mbps and 2Mbps) dropping since January 2004 by around 23%. The numbers of supplier and packages available have increased considerably over this period with 0.5Mbps tariffs availability increasing 75%.

455 tariffs offered by 109 operators over 36 European countries were examined over the first three quarters of this year (2004).

At the higher speeds, 4Mbps and 8Mbps the price reductions have been less dramatic. Clearly at this premium-end of the market there is little competition and in their words “[leaves] more room for price elasticity for content providers.”

It’s interesting to note that non-DSL products make up 20% of the European market.
BroadGroup European Broadband Pricing Q3 2004 Graph
We find it surprising that, given the intense competition at the 0.5Mbps level, pricing hasn’t come down more than at 1 and 2Mbps levels. We wonder if this is due to the majority of connections being provided by wholesalers to markets, such as BT Wholesale in the UK. Without competition at this level, these wholesalers (normally the incumbent telco) don’t have much impetus to lower their prices dramatically, just gradually, to keep their telecoms regulator from getting angry.

When we asked the BroadGroup about pricing across the surveyed countries they said there was a considerable difference. Generally, the previous Eastern European counties have lower pricing, as do many of the Scandinavian countries. To us this points towards major fibre optic network runs equalling lower prices, as most of the former Eastern Europe frog leapt mainland Europe by replacing their antiquated phone system with fibre. Scandinavia is well known for their wisdom in laying copious amount of fibre. We suggest that those trying to make their countries competitive both in terms of the obvious – IT, and the less obvious – digital entertainment networks, pay attention.

BroadGroup – Broadband Pricing in Europe Q3 2004

Europeans Devote 20% of Media Activity to the Internet

There has been a rise in the amount of time people spend online, with the Internet now accounting for 20% of Europeans’ media consumption, according to research commissioned by the European Interactive Advertising Association (EIAA).

The Internet now represents 20% of European’s media consumption, above magazines (8%) and newspapers (11%) but below radio (30%) and TV (35%), according to the research.

The study was undertaken via phone interviews with 7,000 respondents in the UK, Germany, France, Spain, Italy and the Nordic countries between September and October 2004. Five hundred were interviewed in both Belgium and the Netherlands. The study was designed to quantify how people allocate their time across media in Europe and to gauge consumer perceptions of the Internet and the role it plays within their media selection.

The EIAA is a pan-European trade organisation for sellers of interactive media. Members are currently AdLINK Internet Media AG, AOL Europe, LYCOS Europe, MSN International, Tiscali, T-Online International and Yahoo! Europe.

Issues:

According to the survey, the Internet now accounts for 20% of European’s media consumption, up from 10% in December 2003. Almost half of all Europeans are now using the Internet with penetration rates ranging from 74% (Sweden) to 34% (Spain).

At 35%, TV continues to represent the lion’s share of the average European’s media consumption, followed by radio (30%), the Internet (20%), newspapers (11%) and magazines (8%).

Respondents generally perceived the Internet as a more pro-active media. Sixty-one per cent viewed it as a medium to “keep you ahead of the game” and half cited the Internet as their favourite source of information. Seventy per cent rated the Internet as “the best place to get what you want when you want it” and 80% described it as the “best time-efficient medium”.

These results compare with a separate study by the Online Publishers Association (OPA) in New York which showed that, for the first time in the US, content such as information services or entertainment became “the leading online activity as measured by share of time spent online”. Content surpassed other online activities such as communications, commerce and search.

Positions:

“We are witnessing a shift in how consumers are using the Web as broadband households continue to grow. Clearly, it is much more than a tool; it is a primary source of information, entertainment and fun,” said Michael Zimbalist, President of the Online Publishers Association.

“The Internet is now a rival to other media and with ‘always on’ and mobile technologies emerging, we can only expect this trend to continue,” said Michael Kleindl, Chairman of the EIAA.

The number of Dutch broadband connections (cable and ADSL) increased from 2.53 million on 30 June 2004 to 2.85 million on 30 September 2004. The penetration of broadband connections in Dutch households reached 40.4 percent on 30 September 2004 compared to 22.9 percent on 30 September 2003. ADSL increased market share to 54.7 percent and penetration per household to 22.1 percent. Cable continues monthly additions over 100,000, thanks to @home with 49,000 new customers. @home boosted its customer base to 409,000 and passed chello, while Wanadoo saw a seasonal dip in quarterly growth, continuing to stay the largest broadband ISP with 429,000. Het Net doubled net additions to 66,000, passing the 200,000 milestone in Q3 and becoming the fifth largest broadband ISP with 204,000 subscribers, behind chello with 379,600 and Planet Internet with 376,000.

European Interactive Advertising Association

European Music Rights: Hearing Today – Latest

It’s been clear that retailing Digital Music in Europe has been a lot more complex to organise than in the US. Witness the slower rollout of European music services – EU challenges EU-wide music royalty structure).

The collecting societies will be fighting their corner today at the hearing in Brussels. All involved hope this should go towards clarify the situation.

Failure to fix clear, fair rules for online music licensing has “been the main obstacle in Europe” blocking faster development of online music services, said Lucy Cronin, executive director of the European Digital Media Association. Quoted from the IHT as they covered the build up

Latest News 13:00 update

The run of the events so far. First thing this morning the commission presented its objection and the collecting societies presented their disagreements. This was followed by Q&A session lead by the Commission when one of the issues re-examined was cross board monitoring.

When we asked for an instant reaction to the situation, Lucy Cronin told Digital-Lifestyles “By lunchtime it doesn’t appear that the Commission are being swayed by the collecting societies arguments.”

This afternoon the Interested Parties will have an opportunity to present.

Following this hearing, the wheels of the Commission continue to turn. A report will be circulated for internal consultation. It is expected that it will be a couple of months until the EU ruling will be publicly announced.

European Digital Media Association

Apple Avoids French Courts Opening FairPlay DRM

VirginMega, a joint venture between Virgin France and local media company Lagardère, has failed in its legal attempt to get Apple to license it DRM technology.

VirginMega claims that Apple’s refusal to license its FairPlay technology – the Digital Rights Management (DRM) system that allows songs from the iTunes store to be played only on iPods – is hampering the expansion of its digital music download market. The retailers complaint was ruled to be short on convincing evidence, according to the French Competition Council.

The problem, as VirginMega sees it, is that as its own online music service uses Microsoft’s audio files format (WMA) and is protected by Microsoft’s DRM technology, it isn’t supported by Apple’s iPod digital audio player. Since Apple won’t build WMA compatibility into the iPod, and as the iPod is the number one digital audio player worldwide, VirginMega is obviously miffed. Virgin wants Apple to licence FairPlay so it can incorporate the technology into the tracks it sells, thus making them iPod-compatible. The lack of compatibility between rival music services and players will certainly put VirginMega at a ‘disadvantage’, so it’ll have to look elsewhere to improve its sales to WMA-compatible devices.

Clearly Apple isn’t keen to share. Some feel that Apple may have shot itself in the foot here, as wider content support for FairPlay could help to drive the sale of iPods. By establishing AAC and the FairPlay DRM as a standards, more iPods would be sold and other standards, like WMA, would possibly be left by the wayside. Conversely if other music sites started using FairPlay, Apple would lose the relationship with the music purchaser.

Skype & Siemens Bring Wireless VoIP

Siemens Gigaset M34 USB Adaptor SkypeSiemens have announced the availability of a range of handsets that work with VoIP (Voice over IP) software, Skype. Simply by plugging the USB adapter into a computer running an updated version of Skype, home and business users will be able to make calls using a cordless handset. Calls to other Skype users will be free and calls to International landlines can be made at very low cost using SkypeOut.

For those of you who like model numbers – the Siemens Gigaset M34 USB PC adapter works with the recently launched Gigaset C340/345 and Gigaset CX340/345isdn, Gigaset S440/445 and Gigaset SX440/445isdn, Gigaset S645 and Gigaset SL440.

The handset range is, in itself, pretty impressive featuring some with built-in cameras capable of sending MMS and others able to do Instant Messanging (IM). Remember, these are not cellular phones, but are for home or office use.

When we spoke to Siemens they told us that you can walk into a shop in Germany and buy many of these handsets today. There are ongoing discussions with UK retailers and it’s likely that the M34 USB adaptor will be bundled with handsets – guide price £100 for the Gigaset C340/M34 bundle, with availability probably post-xmas.

The real strength of this deal is that normal, average home users will be able to use VoIP, using a hand-set that is familiar to them. They won’t have to go to their computer to make a Skype call and dig deep into software.

The deal was first announced in March at CeBIT 2004 and was originally slated for release in September. Reasons for the delay are currently unclear.

We imagine that Skype must be pretty pleased with this deal. Not only do they enable people to use their service on a phone but it gives Skype a mainstream legitimacy that was previously lacking.

What is slightly unexpected about this is that Siemens, a provider of POTS (Plain Old Telephone System), is voluntarily moving to VoIP. It is another clear sign of the acceptance from ‘old school’ telephony companies that VoIP is the way forward. Marketing-wise it’s a great way for them to shake off this old image and appear ‘down with the new tech kids’.

We’ve been experimenting at the Digital Lifestyles studio with using a Bluetooth Jabra BT250v headset and a Belkin Bluetooth Adaptor to make Skype calls. On the whole it works, but the setup is definitely not consumer friendly as yet.

Siemens Mobile – Gigaset M34 USB
Skype

Vodafone 3G Services Go Live!

Following on from Monday’s story, Vodafone’s betting heavily on 3G this Christmas, read on for further details of Vodafone’s new offering.

Timed to attract consumers in the lucrative pre-Christmas market, Vodafone’s third-generation (3G) service offers quicker music, video and e-mail downloads compared to GPRS. With 3G you can access all of Vodafone’s current services, as well as new video calling, video messaging and video clips specifically for the 3G network. Vodafone is supporting the new service with an enhanced Web portal designed to offer easier access to the 3G services.

The mobile operator is aiming at the youth market, which has been influential in the growth of services such as text messaging. It hopes the key attraction will be music downloads, as mobile operators look to compete with Internet music download services such as Napster and Apple’s iTunes.

The roll-out will be concentrated in densely populated urban areas, covering about 30 per cent of the population, according to Vodafone. Although the new 3G technology promises to provide data transfers at near-broadband speeds, it has taken ages for firms to launch their 3G services due to technical glitches. Although streaming audio and video will the prime marketing driver, it’s likely that data on the move, not video calls, will drive the market.

Vodafone’s ‘enhanced’ 3G content includes a downloadable music catalogue, a made-for-mobile drama inspired by the TV series 24, together with exclusive videos, pictures, animated greetings and wallpaper including the launch of Movie of the Month, starting with Bridget Jones: The Edge of Reason. Sports fans are promised access to UEFA Champions League and Barclays Premiership video clips, together with exclusive Manchester United and Ferrari mobile video content.

“Vodafone live! with 3G will dramatically change the way our customers experience their Vodafone services and we are confident that Vodafone live! with 3G will be a success”, said Arun Sarin, chief executive at Vodafone. “Customers want communication, organisation, entertainment and information on the move and they will increasingly turn to one device to deliver these needs: their mobile phone. Vodafone live! with 3G will become increasingly mass market next year and we expect over 10 million customers to be using Vodafone live! with 3G by March 2006 in our subsidiaries.”

As reported in September, Vodafone has ordered 10 varieties of 3G handset from Sharp, Sony Ericsson, Motorola and Samsung, with built-in features including MP3 music players and 2-Megapixel camera phones. They will be subsidised as aggressively as its existing 2G handset range, so high-end users who agree to a contract will be entitled to a free phone. The launch is also international, extending to Austria, France, Germany, Greece, Ireland, Italy, Japan, the Netherlands, Portugal, Spain, Sweden, Switzerland and the UK.

www.vodafone-i.co.uk/live/

Vodafone’s betting heavily on 3G this Christmas

Vodafone live! with 3G enhances Vodafone live! by providing customers with faster access to content and the ability to see more and share more with the use of video. The company’s 3G services will further add video calling, video messaging, a richer music experience, new games, as well as video clips.

A return on investment is critical for Vodafone, who has spent some £8 billion on top of the £14 billion it had to fork out for 3G licenses (Vodafone and its four UK rivals paid around £22.5 billion for the 3G licences). Of this investment, The Observer newspaper reckons that £8 billion has been spent on network infrastructure, with a little more going on R&D, and some £100 million earmarked for advertising. David Beckham will feature prominently as the mobile giant launches a pre-Christmas advertising blitz, promoting video downloads and other bandwidth-hungry services made possible by advanced colour-screen handsets and the higher connection speeds of 3G networks.

The new high-speed service uses a completely different network to the standard Vodafone live! service. The company has built it so that whenever you are outside a 3G service area, you will continue to access all the services, but the speed to access will be reduced. Video calling or streaming content will not be possible and the service will stop if moving off the 3G network. You should know when you’re in a 3G service area because a small 3G symbol will appear on the screen of your handset.

As well as content, 3G service providers will have to distinguish themselves with coverage. For instance, Vodafone claims about 60 per cent population coverage, but much of that will be in London and a few other metropolitan areas. Orange, which also plans to launch its 3G offering before Christmas, said its initial network deployment would be more extensive. Alexis Dormandy, Orange’s chief marketing officer, told The Sunday Times:: “We have a much larger, broader network because it’s supposed to be a mobile network rather than a ‘stay-in-one-place’ network.”

With such a big financial commitment to 3G, it’s vital that Vodafone has to get its 3G marketing right. Thankfully, it will be launching its service with no fewer than 10 mobile handsets (as we’ve covered), a problem Hutchison encountered when it launched its ‘3’ service a year or so ago.

Vodafone

Cisco CTO challenges WiMax

Cisco Systems CTO Charles Giancarlo has announced that his company will not be backing WiMax (IEEE 802.16) technology. The announcement came during his brief keynote address at the Next Generation Networks conference in Boston, where Giancarlo asserted that Cisco will only be “providing the backbone infrastructure that may be behind any WiMax deployment. Cisco has not invested in WiMax. DSL and cable are already there, and they are much more deterministic.”

WiMAX is a third-generation wireless technology that provides high-throughput broadband connections over long distances. Wi-Fi and WiMAX are actually complementary technologies, according to Intel, as WiMAX is a ‘last mile’ technology – it connects businesses and homes to the high-speed Internet. Wi-Fi provides the wireless LAN connectivity within a building or a home. The two technologies have been built as close cousins, and should work together to provide the best connection for the users needs. The technology may well find its way into airport hotspots, for instance, but it’s unlikely service providers will invest in building two parallel wireless broadband networks.

An implementation of the IEEE 802.16 standard, WiMAX provides shared network connectivity at speeds of up to 75MB/s and as far as 30 miles, which should be enough bandwidth to simultaneously support more than 60 businesses with T1-type connectivity and hundreds of homes at DSL-type connectivity. However, on the average a WiMAX base-station installation will likely cover between three to five miles, so home networking is not the compelling application for WiMax. Today, last mile connections are typically made through cable, DSL (digital subscriber line), fibre optic connections and even standard phone lines. The ability to provide these connections wirelessly, without laying wire or cable in the ground, promises to greatly lower the cost to provide these services.

A further benefit of the WiMAX standard is that it relies mainly on 2GHz to 11GHz bands as opposed to the ‘overcrowded’ 2.4GHz band used by WiFi. The specifications of WiMAX avoided many of the mistakes that went into the WiFi standard, allowing longer reach, Non Line Of Sight (NLOS), greater bandwith, and better encryption. However, the 30 mile radius should be taken with a grain of salt, as it would most probably only apply to a true line of sight point-to-point connection under ideal atmospheric circumstances.

Giancarlo reminded listeners at his speech that many wireless technologies have come and gone over the years without finding success. “This is what went wrong with MMDS (multichannel multipoint distribution system) and LMDS (local multipoint distribution system). The economics became very bad very quickly.”

However, this hasn’t stopped Telabria, who has already announced plans to build the first WiMAX network in the United Kingdom. The network, which is now under construction, will deliver high-speed wireless broadband services to residential, business and enterprise customers in the South East of England, and provide backhaul for Telabria’s growing installed base of WiFi hotspots in the region. The service will commence trials in January, with a commercial launch by mid 2005. “We’re extremely excited about the network we’re building,” said Jim Baker, Telabria founder and Chief Executive Officer, speaking at the WiMAX World Conference in Boston. “WiMAX is a revolutionary standard which, over the next few years, will fundamentally change the structure of broadband networks”.

VoD, NVoD & DVR All to Grow In Europe – Yankee

Combined Annual VoD and NVoD revenue will increase fivefold to Euro 2.2 Billion by 2008, while DVR service penetration will also increase to 20% of Western European Digital TV Homes by 2008, says Yankee Group.

Video on demand (VoD) and digital video recording (DVR) are phrases that service providers are getting very used to – because that is where their business is heading, and both will “coexist as complementary options for digital TV customers,” says Jonathan Doran, Yankee Group Broadband & Media Europe senior analyst, in yesterday’s news release.

Yankee predicts that Video-on-demand (VoD) and its variants will account for an increasing proportion of digital TV revenue in Western Europe, with products like FastWeb and arrivo accounting for a growing proportion of European pay-TV revenue in the next 3 to 5 years.

Two reports, On-Demand TV, Part 1: VoD Will Grow Europe’s Pay-TV Markets, but Not Much, and On-Demand TV, Part 2: Operators Must Move Fast to Add DVR to Their Digital Proposition, mention some challenges that VoD must face. Cable operators, for example, will have to fork out for digital upgrade costs and provision of customer-premises equipment, while satellite operators won’t be able to provide true VoD services if they don’t have a return path. Furthermore, while services such as Sky+ and PILOTIME are showing strong initial appeal among early adopters, high subscription fees will deter many users.

But most importantly, Yankee says platform operators will have to recognise that VoD represents an enhancement of the digital TV value proposition rather than a core application, so that although VoD will become an intrinsic part of digital TV, it will only account for a modest share of overall service revenue.

Operator-provided DVR service faces numerous challenges, Yankee warns, like competition from standalone retail DVR and DVD-R units. However, as equipment prices continue to fall and platform operators increase their marketing push, consumer adoption of DVR service is increasing. “DVR services will be more widely and frequently used by digital TV subscribers than regular VoD offerings that are limited to the less ubiquitous cable and broadband platforms,” says Jonathan Doran.

It’s still more theoretical than practical at the moment, so many cable operators will have to play it safe and offer both VoD and DVR until a demand pattern is established.

Europeans don’t Get Portable Video Players Yet

A new survey has found that Europeans are not enamoured by the all singing, all dancing devices that play songs and films, play video games and have a video-playback feature. Only 5% are interested in buying a device that plays both music and video, while a mere 7% would like their device to play games and video. But almost a third are interested in listening to music on a portable player such as an iPod.

5,000 consumers from Britain, Germany, France, Sweden, Spain and Italy were recently surveyed by Jupiter Research and the results were published yesterday.

Things might change, of course, if the multi-purpose gadgets could stay small, neat and inexpensive, and indeed Apple has managed to add photo display capabilities to the iPod without increasing its size.

It makes sense that 27% of European consumers would prefer to have music-only while on the move, since unlike movies, you really can listen and enjoy it whilst running or walking. As for the 13% who want to watch video while out and about, maybe they are the ones who have to wait the longest for buses and trains.

So, gadget makers sit up and take notice. Consumers want music, just music – 39% of French and 31% of British consumers were most interested in music players – and they want the sound quality to be top notch. That’s why lots of them have dedicated, digital music players. This is probably not really what Bill Gates wants to hear, with his Portable Media Center waiting in the wings.

Last months Jupiter Research report, ‘European Digital Music: Identifying Opportunity’, predicts that digital music revenue will reach €836 million(~$1,062m), or 8% of the total market, by 2009. While the growth of digital music players like Apple’s iPOD or the Creative Nomad Jukebox feature a lot in the news, CD’s still rule. So, it is sobering to remember that these statistics and reports are only referring to a tiny proportion of the music-listening public.