February 8, 2002 -- Residential broadband has finally taken off in Europe, with ADSL subscriptions outstripping those for cable modem services in 2001 for the first time. A new Yankee Group Report entitled "European Residential Broadband Takes Off" presents a detailed forecast for consumer broadband in 15 western European markets. Key highlights include predictions that by 2006:

--Broadband will penetrate 20% of all households, serving over 31 million customers.

--The value of the broadband access market will reach EUR 11.2 billion ($9.4 billion).

--ADSL will account for 80% of total consumer broadband access revenues.

"Projected growth depends upon a number of key drivers," according to report author Jonathan Doran. These include the continued rollout of DSL by incumbent telcos and the aggressive response of cable operators in developing broadband services to compete directly with ADSL. Other major growth boosters will include competitive pricing, greater availability of self-installation packages, and wider government support of national broadband initiatives.

Several remaining factors could also constrain the potential development of residential broadband. Availability may be hampered by cutbacks to roll-out plans in light of growing financial difficulties. A lack of real competition following the failure of local loop unbundling may keep prices high, deterring large numbers of potential customers from adopting broadband. "Most significantly," says Doran, "the industry has yet to convince consumers of the broadband value proposition, given the wide availability of low-cost narrowband services and the continuing dearth of compelling broadband content."

-End-