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EU Digital Agenda Delivers a Timely Boost to the Broadband Economy

The EU Digital Agenda recently, announced by the European Commission, will play a pivotal role in the evolution of the European telecoms and media sectors thanks to its focus on boosting broadband availability and enabling an easier flow of content and services between nation states.

According to Frost & Sullivan, a global consultancy, although national governments will need to decide whether to follow Brussels' lead or retain a national regulatory focus, the Agenda will act as a significant driving force across the digital economy over the next decade.

Boosting broadband availability, especially with regards to high-speed services, is central to the ongoing development of online services across the region. "The explosion of online video service usage, driven by the deployment of broadcaster's on-demand services and the ongoing allure of illegal download sites, will need to be supported by greater capacity provision," says Adrian Drozd, Principal Analyst for Frost & Sullivan's Telecoms group. "Certainly, the ongoing transition to high definition content, and increasing demand for 3D services, will place even greater demands on broadband networks. The emergence of IPTV as a viable platform for pay-TV services further accentuates this requirement, while connected TV services will further boost consumer demand for bandwidth."

The targets set out by the Agenda are ambitious - it states that all citizens should be able to access basic broadband by 2013, with 30Mbps connections available to all by 2020. However, the biggest concern is the lack of detail how the deployment of high-capacity fibre networks will be funded. Attracting investment for deployment in rural areas - where it is often not commercially viable for operators to deliver services - will remain a key issue.

In the UK, the previous Labour government proposed that a 50p/month tax be levied on all landlines, which would have raised around £170 million (€200 million) per year to help pay for the introduction of super-fast broadband. The new Conservative-Liberal Democrat coalition has outlined new plans to invest a part of the TV license fee instead; the suggestion is that the element of the fee currently reserved for digital switchover could be used to fund broadband deployment, especially in the third of the country where BT, Virgin Media and other operators are unable to deliver commercially viable services. "With BT already investing £2.5 billion (€2.9 billion) in order to deliver 40Mbps connections to around two-thirds of households by 2010, investment will clearly be needed to meet the more ambitious targets proposed by the EU," comments Adrian Drozd.

As it is still not clear who should bear the brunt of upgrade costs, the operators are anxious to gain some financial compensation from over-the-top content providers in order to help pay for the essential network upgrades needed to support the delivery of such services. There is clearly a need for more innovative business models to be explored which provide a fairer return for service providers.

The Agenda sets out practical ways in which the EU will help to improve cross-border online services and reduce disparities between services offered in different member states. The proposals aim to improve standards, reduce regulatory hurdles, encourage the use of ePayments and simplify digital content management / licensing. The objective is that 20% of EU citizens will be using cross-border online services; today, only 7% of the online transactions made by European consumers are cross-border in nature. Although it is still not clear how these guidelines will be implemented and funded, at least a benchmark has been set.

Adrian Drozd concludes: "The EU Digital Agenda will play an essential role in the evolution of the European telecoms and media sectors by placing emphasis on boosting broadband availability and enabling an easier flow of content and services between nation states. For the former, it remains to be seen whether the objectives will result in greater European intervention with regards to network rollout, and if more financial assistance may be delivered as a consequence of the Agenda. For the latter, the resultant increased adoption of high-speed connectivity will deliver new potential in terms of advanced services provision, while the focus on cross-border service availability will bring both opportunities and challenges."

Источник: Cellular news

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