Tiscali 2007 Annual Report Download - page 28

An increase in the penetration of broadband -type access has
been witnessed on the market, against the continuation of sales
policies leading to price competition.
If, on the one hand, the broadband market has without doubt
the most significant weight for the operators in terms of rev-
enues and is characterized by constant growth of the cus-
tomers on a parallel with the on-going technological innova-
tions, the n
arrowband market , especially in Italy, is still of a
significant size, even though continually decreasing. The num-
ber of users in fact fell by around 7.3 million at the end of
2003, to 3.3 million at 30 June 200710
Such performance takes on the form of a normal market trend
where we witness a migration of the n
arrowband customers
towards
broadband-type access so as to avail of the faster
download and upload speeds and exploit the more greatly cus-
tomized services with a higher added value.
Broadband connections within the home-based market, accord-
ing to IDC, were around 89 million at the end of 2007, and are
expected to increase to over 111 million by 2010.
In the wake of broadband product development there is also
growing DSL product availability, accompanied by a diminish-
ing monthly payment. The market trend shows a reduction in
ARPU (Average revenue per user) in comparison with a high-
er bandwidth availability. This effect is also attributable to
stronger marketing investments which, attracting new cus-
tomers, contribute to the growing use of the product.
According to IDC, by 2010 revenues solely from broadband
access in Western Europe are expected to represent a market
value of about EUR 32 billion, compared with about EUR 26
billion in 2007. Of these, over 69% will be from the home-
based market.
The weight of DSL technology has a growing impact on the
broadband market. IDC forecasts that in 2010, of the esti-
mated 111 million broadband connections, about 81% will
be via DSL.
The broadband market is characterized by an increasingly
significant presence of alternative operators (OLOs) who erode
the traditionally dominant position of the former-monopolist
operators, thanks to the development of a proprietary
unbundling network. Consequently, competition has increased
considerably within each single country, with around 50% of
the total market held by the alternative operators (OLOs) who
have significantly increased their market share.
With regard to prices, the average trend for the period should
see a reduction, albeit moderate. In this respect, it is impor-
tant to mention that this access-only service price trend will
REPORT ON OPERATIONS
27
BROADBAND CONNECTIONS
SOURCE: TISCALI PROCESSING BUSINESS CONSUMER
(EUR ml)
40,000
30,000
20,000
10,000
0
2005 2006 2007 2008 2009 2010
BROADBAND REVENUES BY CUSTOMER SEGMENT, 2005 - 2010
SOURCE: IDC DATA PROCESSING, 2006
BROADBAND CONNECTIONS BY TECHNOLOGY IN WESTER EUROPE, 2015 - 2010
SOURCE: IDC DATA PROCESSING, 2006
(ml)
120
100
80
60
40
20
0
2005 2006 2007 2008 2009 2010
BROADBAND CONNECTIONS IN WESTERN EUROPE, 2005-2010
SOURCE: IDC DATA PROCESSING, 2006
ITALY UK
(000)
25,000
20,000
15,000
10,000
5,000
0
2006 2007 2008 2009 2010 2011
DSL CABLE METRO ETHERNET OTHER
(000)
120,000
100,000
80,000
60,000
40,000
20,000
0
2005 2006 2007 2008 2009 2010
10. TISCALI PROCESSING