Opportunities for Broadband Service Providers
Considering that there are nearly 19 million small- and medium-sized enterprises (SMEs) across Europe, broadband service providers will feel optimistic about the tremendous opportunities this untapped segment generates. Increasing interest among national and regional governments in the business broadband market is creating an encouraging atmosphere for service providers to thrive.
Applications such as teleworking, voice over Internet protocol, e-commerce and videoconferencing are likely to provide further opportunities for the business broadband service providers. The demand for faster and always-on access to the Internet, cost savings, access to advanced applications and increased productivity is expected to go a long way in helping broadband providers make inroads into the lucrative SME market.
Currently, service providers have to confront some barriers because of their inadequate understanding of SMEs and their business issues. Once the providers identify appropriate marketing strategies to tap the SME segment, migration to broadband is expected to be a lot faster.
"Broadband also creates opportunities for service providers to bundle services, thereby enabling them to offer more services," reports Paul Devine, Research Manager at Frost & Sullivan. "The providers will be greatly helped by governments' interest in the broadband project. Governments in the European Union are aware of the influence of modern telecommunications infrastructure in increasing productivity and are encouraging Broadband adoption," he continues.
"The EU governments have initiated a programme to benchmark their broadband take-up and use of ICT and have also tied in local IT companies that can advise SMEs on implementation and support of their broadband infrastructure," notes Mr Devine. "Many regional governments have set up funding to offer seminars and education to local businesses on the benefits of broadband."
To reduce the digital divide, governments have subsidised rollout of broadband in rural areas or offered grants to companies to install satellite broadband where digital subscriber line (DSL) is unavailable. This way, the benefits of broadband will not be confined to the technically sophisticated businesses.
The issue of participating in a fiercely competitive market along with the rapid commoditisation of the service is challenging the market participants to find a service differentiator. Keeping products simple and user-friendly as well as providing a source of assistance and advice is likely to help them gain market advantage.
Most EU countries are expected to witness rapid growth in the short term. For instance, while the U.K. business broadband market is already growing by 100 per cent, by the end of 2005, about 90 per cent of the French market is likely to be able to subscribe to DSL-based broadband.
In Germany, about 250,000 SMEs are being serviced by DSL. Success in this country can partly be attributed to the low level of competition from cable and satellite.
"For effective targeting of and penetration into the SME sector, service providers will have to focus on promotion, channel management, increased availability of applications and means of alleviating end-user concerns," concludes Mr Devine.
www.frost.com
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