Europe’s iDTV penetration will reach 44 percent of European households by 2007, up from only 11 percent today, according to a new brief by Forrester Research (Nasdaq: FORR). Four countries will drive iDTV’s growth — the UK will take 45 percent of Europe’s iDTV penetration,France, Spain, and Italy will share 44 percent; and the rest of Western Europe will account for only 11 percent. Furthermore, satellite will be the main delivery mechanism.

“The growth of iDTV across Europe won’t occur in leaps and bounds,” said Forrester Analyst Hellen K. Omwando. “It will grow at a compound annual growth rate of only 26 percent to reach two-thirds of the number of PC-based Net households by 2006. The UK will still have the largest number of households with iDTV by 2007, but the 61 percent penetration will start saturating. France and Italy will play catch-up and reach a penetration of 57 percent. Italy’s impeding merger of Stream and TELE+ will provide the right ownership, impetus, and focus to market and enhance iDTV services. France will get a boost from the recent restructuring of CANAL+ and the pay-TV market consolidation, both of which will enable better collaboration with key market players.”

By 2007, three in four Swedes and Danes will have access to iDTV, with the Norwegians close behind. The focus on digital terrestrial will hold Finland at 59 percent despite its government’s push for digital TV. In Portugal, TV Cabo’s iDTV service is the only game in town, but it offers the service at a sweet price of only 7 euros if subscribers buy their own set-top box and 15 euros if they rent it from the operator. We expect the firm to connect 400,000 Portuguese households by 2007. Germany will not grow beyond a miserly 16 percent iDTV penetration in 2007. In the Netherlands, iDTV penetration will only reach 31 percent of Dutch households by 2007.

“Today, satellite delivery grabs the lion’s share of iDTV broadcast at 69 percent,” Omwando added. “By 2007, satellite will continue to retain most subscribers, cable will ramp up but not enough to catch up, and digital terrestrial will still struggle to find a foothold. Satellite broadcast will remain the most popular delivery mechanism, as better quality and more channels — up to 300 in BSkyB’s case — outweigh satellite’s problems of subscribers having to use a phone connection as the return path and relatively high cost. But satellite’s share will drop to 55 percent by 2007 as the other delivery methods gain ground. Cable will account for 34 percent of delivery of iDTV, up from 23 percent today. The collapse of terrestrial players Quiero and ITV Digital has set back an already fledgling market; digital terrestrial will only reach 11 percent of European homes by 2007 — just 3 percent more than where it stands today.”