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New Home Networking to reach 168 Million Households Worldwide in 2008
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New Home Networking to reach 168 Million Households Worldwide in 2008 - 17-August-2008, 15:10

Home Networking to reach 168 Million Households Worldwide in 2008

CONNECTIONS Europe Summit focuses on entertainment and multimedia services in European markets

Rapid growth in home networking, approaching 168 million households worldwide in 2008, is laying the foundation for expansion of multimedia services internationally and especially in the European markets, according to Parks Associates. The market research firm will host CONNECTIONS Europe Summit on August 29, 2008, at the Kempinski Hotel Bristol Berlin, to discuss the implications of this market growth.

Europe is in the midst of a home networking boom thanks to an increasingly competitive market for broadband services. France and the U.K. have been at the forefront so far, and Germany, Spain, and Italy have been bringing up the rear. The latter three markets could keep the boom going, however, provided that regulators foster greater competition.

Broadband growth pushed Europe ahead of North America in terms of home network adoption, said Kurt Scherf, vice president, principal analyst, Parks Associates. With the network in place, providers will tie in high-demand entertainment services. By 2012, over one-third of networked nodes worldwide will have entertainment or multimedia functionality, with particularly strong growth in IPTV services.

Competition among incumbent and upstart telephone operators in Europe has been fostered by regulators aggressive stance on local loop unbundling. Since the late 1990s, regulators in Europe have allowed alternative carriers to have access to last-mile connections that were initially built by the incumbents. Regulators established rules regarding the fees that could be charged to the competitive players, ensuring that these upstarts would only pay for the facilities and equipment that they actually used. This move has put the competitive players on equal footing with the entrenched players, resulting in a dramatic shift in the availability of operators from whom customers can choose. Where there was just one PTT (Postal, Telegraph, and Telephone provider) per country, now there are many.

In the case of Italy, the entry of FASTWEB has spurred broadband adoption, but the country lacks the variety of players seen in the U.K. and France. Similarly in Spain, Telefnicas dominance is only now seeing a significant challenge thanks to the consolidation of the countrys main cable TV providers (ONO & Auna) and the growing presence of Orange. Germany presents another interesting case. Regulatory provisions there have been less friendly toward new entrants than in France and the U.K. Deutsche Telekom, the incumbent telco, controlled the countrys main cable provider until recently, and the German government is resisting pressure from the European Union to enact additional unbundling measures.

All of these data point to the fact that home networking still has room to grow in Europe. Spain, Italy, and Germany remain laggards by international standards, but they will not be so indefinitely. Once competition heats up, adoption levels should quickly rise as they have in the U.K. and France. Home network providers would benefit from keeping an eye on the changing competitive dynamics in these countries and positioning themselves to exploit demand once competition unlocks it.

CONNECTIONS Europe will provide attendees with international consumer research and feature interactive discussions on advanced television services, new media and digital content, and value-added services. Advisory sponsors for CONNECTIONS Europe: Cisco, Enure Networks, F-Secure Corporation, Macrovision, the Multimedia over Coax Alliance (MoCA), Neotion,, Toshiba Electronics Europe, WirelessHD, and Zilog, Inc.
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