Report

December 2001

Making ADSL Broadband Profitable


Lars Godell
ADSL providers should focus on value-added PC services to improve margins. Launching TV over DSL will help compete with cable but will lose more than 3,000 per subscriber over 10 years.
by Lars Godell with Matthew Nordan, Mariska Wiersum, Jessica Roitman, Matti Koivu

MARKET OVERVIEW
  • Residential broadband access grew 252% in Europe in 2001.
  • ADSL solves coverage, but prices and content still stink.
ANALYSIS
  • Value-added PC services speed ADSL profit by two years.
  • TV over ADSL costs nearly 1,900 per user in year one.
  • 24% of European households will use broadband in 2006.
ACTION
  • Get the access basics right before pursuing new services.
WHAT IT MEANS
  • Virtual broadband network operators emerge over cable.
  • The No. 2 Pan-European broadband player in 2004: Sony.
 
Figures & Data
  • Figure 1.  European Household Internet Penetration By Access Technology, 2001
  • Figure 2.  Europe's Broadband Users Remain Young, Wealthy, And Male
  • Figure 3.  Broadband's Three Key Barriers: Europe's Scorecard For 2001
  • Figure 4.  ADSL Subscriber P&L: Access Only
  • Figure 5.  ADSL Subscriber P&L: Access Plus Value-Added PC Services
  • Figure 6.  ADSL Subscriber P&L: Access, Value-Added PC Services, And TV
  • Figure 7.  Forecast: Europe's Residential Broadband Access, 2001 To 2006
  • Figure 8.  Forecast: Europe's Residential Broadband Technology, 2001 To 2006
   
RELATED MATERIAL 
  • Online Resources
  • Companies Interviewed For This Report
  • Related Research
 
GRAPEVINE
  • Broadband customer service in the Netherlands: the lesser of two evils.
  • Local-loop unbundling: time for a new approach.
  • The killer app remains dirty -- and neglected.

 

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