The landscape of broadband services across Western Europe remains a battleground for telecom operators, as they vie for prominence in a market defined by fierce competition and diverse consumer demands, according to Dataxis.
With hundreds of Internet Service Providers (ISPs) in action, operators are employing various strategies to stand out, including pricing, connection speed, customer service, and bundling entertainment services.
In Western Europe, the diversity of consumer offers reflects the innovative strategies of telecom providers. Spanish tier-1 telcos lead the pack by offering an average of 20 different options, leveraging pricing, speed, and landline availability. They also maintain a multi-brand portfolio, retaining acquired brands and launching new low-cost alternatives, a strategy that sets them apart.
However, the scenario contrasts in Italy and Portugal, where ISPs offer simpler service structures. Italy’s major ISPs provide only a couple of home internet plans, while Portugal mandates most broadband services to be part of a 3play bundle, driving widespread adoption of 3play and IPTV services.
Price range also varies significantly across regions. Dutch ISPs offer a narrower range, with recent premium tier introductions altering the spectrum. France’s national ISPs provide broadband-only services ranging from EUR 19.99 to EUR 39.99 monthly with promotions.
This diversity in offers also ties to the varied access technologies utilized. Austria and France witness ISPs operating across multiple access networks, leveraging technologies like fiber, copper, cable, and Fixed Wireless Access (FWA) to cover diverse terrains, Ophelie Boucaud, Senior Analyst at Dataxis, said in a report.
Fiberization Impact on Pricing & Services
Fiberization, transitioning to full-fiber networks, reshapes pricing and services. Markets like Portugal witness a complete shift to full-fiber plans, with significant growth in infrastructure. Yet, in the UK, while fiber plans are prevalent, actual household connectivity remains at 57 percent, influencing plan subscriptions.
The price disparity between fiber and non-fiber plans averages at 30 percent across Western Europe. However, countries like Germany, Austria, and Belgium experience more significant differences due to limited FTTx availability. In Spain and Italy, where fiber dominates, the price gap is less pronounced, with Italy showcasing lower average costs for fiber plans.
Contrarily, mature markets like France, Netherlands, and Ireland witness full fiber plans being competitively priced or cheaper compared to alternatives like internet cable and vDSL.
Pursuit of Multi-Gig Connectivity
Fiber’s advent doesn’t just impact pricing; it revolutionizes speed and service reliability. Operators are now racing to offer speeds beyond 1 Gigabit per second, heralding a new era in consumer connectivity. Swiss challenger Init7 launched commercial 25G fiber services in 2021, setting the pace for ultra-fast connections.
A dozen European operators, mostly in Switzerland and Italy, offer 10Gb/s speeds. In France and the UK, ISPs have made strides in providing multi-gig services, capitalizing on marketing these advanced offerings to gain an edge in competitive markets.
Full-fiber services are reshaping broadband offers at varying rates across Europe. As countries push fiber coverage and ISPs transition services, alternative access methods face obsolescence. Yet, exceptions exist where technologies like DOCSIS 3.1 remain viable for gigabit connectivity in the short term.
The overarching trend suggests eventual alignment of prices, enabling consumers to access lightning-fast internet at costs similar to older, slower services, marking a transformative phase in European broadband.
Italian ISPs have a very simple structure of services: only 2 home internet plans at Vodafone, or 3 at Wind Tre.
In Portugal, virtually all broadband services have to be subscribed in a 3play bundle, with MEO not even offering any internet-only plans.
In the Netherlands, tier-1 ISPs offer a more limited range of prices, especially KPN which only offered internet at home for a minimum of EUR 42.49 a month, or a maximum of EUR 54.49, a 12 EUR gap. KPN also introduced a new premium tier enabling 4Gb/s access for EUR 64.49 after promotion.
The overall prices of the French 4 national ISPs’ broadband-only services only range from 19.99 (with Free) to EUR 39.99 a month with promotions.
In Austria, ISPs commercialize services on 2.6 different network accesses on average, mainly because fiber networks are yet to be deployed across the country and telcos still heavily rely on copper and cable infrastructures.
In France, ISPs also provide services across 2.8 access networks on average. This number will drop in coming years as incumbent Orange progresses its copper decommission, which is planned for now at horizon 2030.
Some markets have completely shifted to fiber already. All consumer broadband plans advertised in Portugal are now full-fiber only, with cableco NOS actively transitioning its services and customer base to full-fiber. As of Q2 2023, fiber already represents 69.3 percent of NOS’ infrastructure network, a 13-point progression since last year.
More than 80 percent of available broadband plans are full fiber in Ireland, Italy, Spain, Switzerland and the UK. Only 57 percent of British households will be connected to fiber at the end year, and only 25 percent of connected households will subscribe to a fiber plan.
In Austria and Germany, fiber plans represented 13 percent and 17.4 percent of available offers to customers last October, and this reflects a much lower fiber coverage in both countries (respectively 13 percent and 21 percent). Several tier-2 ISPs who started offering fiber rather recently still don’t cover a large enough territory to advertise full fiber to new and existing customers like United Internet’s 1&1 EUR 29.99 fiber plan.
The most significant price differences between non-fiber and full fiber plans are observed in countries where FTTx connectivity remains a novelty and has limited availability: namely Germany, Austria and Belgium.
A dozen European operators already offer 10Gb/s speed, out of which the vast majority are based in Switzerland. In Italy, incumbent TIM launched 10G service in October 2022 on its XGS-PON networks covering over 4.2 million homes across 30 cities.
In Portugal, Altice-backed MEO launched 10Gb/s services in September, and the group also operates services of 8Gb/s speed in France through SFR since February 2022. The race to 10G consumer services is well advanced in France, with Iliad’s Free having initiated the first offers on 10G-EPON through its Freebox Delta.
Last July, Bouygues announced the upcoming launch of similar speeds on its Bbox Ultym services, first available to Parisian customers only. In the UK, a handful of ISP already offer multi-gig speed: B4RN, Community Fibre, Zzoomm, and the latest to date YouFibre which launched an 8Gb/s offer last September.