EU Digital Agenda: broadband trends

Yesterday we looked at some basic economic facts and market trends in the European ICT sector, available at the time the Digital Agenda was launched.

We return to the Commission staff working document SEC(2010) 630 final/2, which accompanied the 15th progress report about telecoms (eCommunications) markets in Europe:

CORRIGENDUM
Annule et remplace le document SEC(2010) 630 final du 25.5.2010

COMMISSION STAFF WORKING DOCUMENT accompanying the COMMUNICATION PROGRESS REPORT ON THE SINGLE EUROPEAN ELECTRONIC COMMUNICATIONS MARKET (15th REPORT); Brussels, 25.8.2010 SEC(2010) 630 final/2 PART 1 (422 pages)

Here are a few market trends I found interesting enough to share with you.


BRICS

Europeans generally and the movers and 'brakers' of European integration need to adapt the EU to a globalising world, with some countries (BRICS) not only emerging, but practically bursting unto the scene. Here a quote regarding broadband uptake (page 23):

Growth rates in developing countries (India 62%, China 23%, Russia 39%, Brazil 23%, Mexico 54%) outpaced the levels of developed countries, clearly from much lower levels of penetration. Many EU operators have been very active in these growing markets.

Europe did not necessarily offer the best deal for SMEs and consumers (page 23):

In October 2009 broadband standalone access at 100 Mbps was available at around 30 euros per month in Japan and 20 euros in Korea. These prices are between 20 and 50% lower than prices for similar products in those EU countries where these are available.

Broadband speed

With regard to broadband speed the trend was clear (page 27):

Low speed broadband lines with download rates between 144 Kbps and 2 Mbps only represent 15% of all fixed broadband lines in January 2010, down from 25% in 2009, while the fastest category of lines (10 Mbps and above) has increased its share, from 14% in January 2009 to 23% of all fixed broadband lines in January 2010.

State aid

The working paper referred to the guidelines adopted by the Commission on 17 September 2009 which outline how public funding can be provided for broadband in line with EU state aid rules (page 32-33):

In 2009 the European Commission took 12 decisions regarding broadband projects involving public funding. 11 of these were found to be compatible with the Treaty (article 4(3) decision types), while one was not considered aid but rather a Service of General Economic Interest.

The total amount of the aid approved was €467 million.

Since then the European Commission had advanced to 83 decisions by 28 July 2011. The Commission DG Competition (see Telecommunications) is now digesting the responses to the public consultation regarding the revision of the State aid Broadband Guidelines.



Ralf Grahn


P.S. Dear Readers, I am still interested in Digital Agendas (language versions), as well as information society plans and ICT actions in the member states of the European Union. If you know something about national information society strategies, you can use the comment section or email me.

EU Digital Agenda: ICT markets and information society

The latest roundups of my blog posts in the trilingual series about EU and national information society strategies can be found in the entries Euroopan digitaalistrategia – kirjoitussarja FI SV EN and Digital Agenda: EU and national FI SV EN.

I commented briefly on one of the cornerstones of the Digital Agenda for Europe in the blog post EU electronic communications market(s) at Digital Agenda start.

This was the communication COM(2010) 253 final/3, which exists in 22 official EU languages, but the version in force seems to be the third revision. We went to the English pdf version of the 15th report:

CORRIGENDUM:
Annule et remplace le document COM(2010) 253 final du 25.5.2010
Concerne toutes les versions linguistiques

PROGRESS REPORT ON THE SINGLE EUROPEAN ELECTRONIC COMMUNICATIONS MARKET 2009 (15TH REPORT); Brussels, 25.8.2010 COM(2010) 253 final/3 (16 pages)


eCommunications

We saw that telecoms networks and services are sorted under the Commission's Information Society web pages eCommunications.

The web page 15th Progress report on the Single European Electronic Communications Market - 2009 offered us access to the communication COM(2010) 253 in 22 EU languages, as well as to the two parts of the accompanying Commission staff working document SEC(2010) 630 final/2 with much more detail (English only), including the Country chapters (Annex 1 in Part 1 or separately).


SEC(2010) 630 final/2

Relatively short communications often build on more detailed documents intended for specialists. In most cases they are available only in English.

In this case the accompanying Commission staff working document comes with a warning:

CORRIGENDUM
Annule et remplace le document SEC(2010) 630 final du 25.5.2010

COMMISSION STAFF WORKING DOCUMENT accompanying the COMMUNICATION
PROGRESS REPORT ON THE SINGLE EUROPEAN ELECTRONIC COMMUNICATIONS MARKET (15th REPORT); Brussels, 25.8.2010 SEC(2010) 630 final/2 PART 1

It is a hefty document - 422 pages. The first 79 pages are dedicated to an overview of market and economic developments, as well as regulatory developments, while Annex 1 from page 80 deals with implementation in the individual EU member states.

Let us take a look at some basic economic facts: revenues, investment, mobile market concentration, mobile communications and fixed broadband growth.


Revenues

An introductory paragraph on revenues offers us a picture of the economic importance of electronic communications and the European ICT sector in general (in 2008; page 4):

Revenues for the EU electronic communications sector were €351 billion in 2008 in the EU, which account for about half of the ICT sector overall. Seven of the ten largest telecoms operators in the world are European. 43% of the sector revenues are driven by fixed voice telephony and broadband (both business and private users), 47% are provided by mobile communications (voice and data), with the remaining 10% from Pay TV.

Investment

The financial and economic uncertainty and crisis curtailed investment in the telecoms sector in 2008 (page 5):

Investment by the EU electronic communication sector accounted for €47 billion in 2008, which represents a drop of 1.5% on 2007. Investment in the fixed market accounted for 70% of the total (incumbents are responsible for 70% of that figure) while the mobile sector was responsible for the remaining 30%.

In a majority of member states the commercial launch of LTE (Long Term Evolution) had been delayed until 2010-2011, with extensive deployment expected in 2013-2014 (page 6).


Mobile market concentration

The study noted that the top 10 mobile operators concentrate 90% of the market (page 7, footnote 10) and described the situation (page 7) in the mobile markets:

The four main groups are present in the majority of Member States (in the form of subsidiary, joint venture or commercial agreement) and they own the first and/or second largest mobile operator in almost all EU Member States (except in Denmark, Latvia and Finland). Most of the main mobile operators are subsidiaries of fixed incumbents. The only large European group which is not the subsidiary of a fixed incumbent has now entered the fixed market to complement its activities (in order to be able to supply convergent offers, e.g. quadrupleplay). While half of European operators are not part of these groups, these represent only 20% of the European market.

Mobile communications

The study noted that the approach to auctioning of spectrum licences had led to a national focus which had not yet translated into pan European services (page 7).

Mobile internet still drove only 4% of the total revenue with significant divergence across member states (page 8). However, the mobile broadband market was emerging rapidly.

Mobile voice penetration in the EU reached 121.9% and, as expected, its growth rate in 2009
had begun to stabilise (+2.5%) (page 10).


Fixed broadband

According to the study (page 19):

In January 2010 there were 123.7 million fixed broadband lines, up 9.3% since January 2009, and the EU average fixed broadband penetration rate reached 24.8%, up 2percentage points over one year.

Internationally, in 2009 the Netherlands and Denmark continued to have the highest broadband penetration rates, followed by Sweden, Finland and Luxembourg, which had penetration levels above 30% of the population, along with a group of four non-EU countries, Norway, Switzerland, Korea and Iceland (page 22).

***

Even if not sizzling hot, I found the economic facts and market trends quite interesting, both with regard to the European Union as a whole and concerning the huge differences between individual member states.



Ralf Grahn


P.S. Dear Readers, I am still interested in Digital Agendas (language versions), as well as information society plans and ICT actions in the member states of the European Union. If you know something, you can use the comment section or email me.

Digital Agenda performance targets

A number of the aims of A Digital Agenda for Europe have been turned into measurable targets, mainly in the medium term (by 2015).

What can European businesses and citizens expect from their digital environment?

Annex 2 (pages 40-41) of the Digital Agenda communication offers us the following Key Performance Targets, mainly drawn from the Benchmarking framework 2011-2015 endorsed by the EU member states in November 2009:

1. Broadband targets:

• Basic broadband for all by 2013: basic broadband coverage for 100% of EU citizens. (Baseline: Total DSL coverage (as % of the total EU population) was at 93% in December 2008.)

• Fast broadband by 2020: broadband coverage at 30 Mbps or more for 100% of EU citizens. (Baseline: 23% of broadband subscriptions were with at least 10 Mbps in January 2010.)

• Ultra-fast broadband by 2020: 50% of European households should have subscriptions above 100Mbps. (No baseline)


2. Digital single market:

• Promoting eCommerce: 50% of the population should be buying online by 2015. (Baseline: In 2009, 37 % of the individuals aged 16-74 ordered goods or services for private use in the last 12 months.)

• Cross-border eCommerce: 20% of the population should buy cross border online by 2015. (Baseline: In 2009, 8 % of the individuals aged 16-74 ordered goods or services from sellers from other EU countries in the last 12 months.)

• eCommerce for business: 33% of SMEs should conduct online purchases/sales by 2015. (Baseline: During 2008, 24% and 12% of enterprises was, respectively, purchasing/selling electronically, for an amount equal to or greater than 1% of the turnover/total purchases.

• Single market for telecoms services: the difference between roaming and national tariffs should approach zero by 2015. (Baseline: In 2009, the roaming average price per minute was 0.38 cents (call made) and the average price per minute for all calls in the EU was 0.13 cents (roaming included).


3. Digital inclusion:

• Increase regular internet use from 60% to 75% by 2015 and from 41% to 60% for disadvantaged people. (Baseline figures are for 2009).

• Halve the proportion of population that has never used the internet by 2015 (to 15%). (Baseline: In 2009, 30% of individuals aged 16-74 had never used the internet.)


4. Public services:

• eGovernment by 2015: 50% of citizens using eGovernment, with more than half of them returning filled in forms. (Baseline: In 2009, 38% of individuals aged 16-74 had used eGovernment services in the last 12 months, and 47% of them used eGovernment services for sending filled forms.)

• Cross-border public services: by 2015 online availability of all the key crossborder public services contained in the list to be agreed by Member States by 2011. (No baseline)


5. Research & innovation:

• ICT R&D increase: Double public investment to €11 billion. (Baseline: ICT government budget appropriations or outlays on R&D (ICT GBAORD) was 5,7 billion nominal euros in 2007.)


6. Low Carbon Economy:

• Promotion of low energy lighting: By 2020 at least 20% overall reduction in energy use on lighting. (No baseline.)

Digital Agenda context and contents

The communication Europe 2020 A strategy for smart, sustainable and inclusive growth COM(2010) 2020 outlined A Digital Agenda for Europe, one of the seven flagship initiatives.

The Digital Agenda was launched 19 May 2010, but about three months later the first Digital Agenda communication was replaced by a corrected version in all languages. I do not remember seeing any explanation for substituting the original communication. The English communication comes with the same warning as the other language versions:

CORRIGENDUM:
Annule et remplace le document COM(2010) 245 final du 19.5.2010
Concerne toutes les versions linguistiques

A Digital Agenda for Europe; Brussels, 26.8.2010 COM(2010) 245 final/2 (41 pages)


Planned actions

In addition to the aim of ”A vibrant digital single market” the Digital Agenda communication sketched the planned actions concerning interoperability and standards, trust and security, fast and ultra fast internet access, research and innovation, enhancing digital literacy and skills and inclusion, ICT-enabled benefits for EU society, international aspects of the Digital Agenda, and implementation and governance.

Annex 1 Table of legislative actions (pages 37-39) contains a lot of information in a nutshell.


Digital Agenda updates

Although it felt refreshing to return to the original communications, we should not forget that a lot has already happened. We can turn to updated information on the dedicated websites for the EU2020 growth strategy and the seven flagship initiatives intended to be mutually reinforcing, specifically the flagship initiative A Digital Agenda for Europe which brings together the different strands, as well as the reform package known as the Single Market Act (SMA), relevant for the digital single market.



Ralf Grahn

Blogging about EU radio spectrum, broadband deployment and Digital Agenda

Here is a round-up of my blog posts to date about EU radio spectrum policies, broadband deployment and the Digital Agenda for Europe, including the first entries concerning IT policies in Sweden, one of the most competitive information societies.

The first thematic Grahnlaw Suomi Finland blog post highlighted the Commission web pages on radio spectrum policy at European level – a useful source - and mentioned the proposed programme for strategic planning and harmonisation: EU radio spectrum policy programme (RSPP) (31 May 2011).

The Grahnblawg entry in Swedish 'EU: Sverige om radiofrekvenser och radiospektrumpolitik' (2 June 2011) offered a few viewpoints from the government of Sweden in relation with the meeting of the ministers responsible for telecommunications (TTE Council) 27 May 2011.

Also in Swedish, 'Radiospektrumpolitiken i EU:s telekområd den 27 maj 2011' (2 June 2011) on Grahnlaw Suomi Finland presented the conclusions of the TTE Council in English and offered a link to the Hungarian progress report in Swedish.

The Grahnlaw blog post 'EU Commission: Radio spectrum policy programme (RSPP) proposal' (3 June 2011) presented some general aims, as well as the provisions on the aim (Article 1) and the application and general regulatory principles (Article 2).

The Grahnlaw Suomi Finland blog entry 'EU radio spectrum policy aims (RSPP proposal)' (4 June 2011) offered a further presentation of the principal aims and policy objectives of the radio spectrum policy programme proposal.

Since radio spectrum is a finite resource, much in demand, the blog post on Eurooppaoikeus 'EU ja kilpailu radiotaajuuksista' (5 June 2011) highlighted the competition objectives of the Commission's RSPP proposal in Finnish.

Grahnlaw Suomi Finland continued the discussion in Finnish about the aims of the European Commission to accelerate the roll-out of high-speed (wireless) broadband in the European Union: EU: Radiotaajuudet ja langaton laajakaista (5 June 2011).

Grahnlaw guided to relevant RSPP sources, namely the English impact assessment and the summary of the IA, available in 22 official EU languages: EU radio spectrum impact assessment (6 June 2011).

Grahnlaw Suomi Finland presented the RSPP objectives, as stated in the summary of the impact assessment: Objectives and impact of EU radio spectrum proposal (7 June 2011).

Grahnblawg presented the RSPP impact assessment and summary in Swedish: Radiospektrumpolitiken i EU: Konsekvensanalysen (8 June 2011).

In Swedish, Grahnlaw Suomi Finland presented the initial response of the Swedish government to the RSPP proposal, cited the 2009 national Broadband strategy for Sweden and mentioned the recent progress reports: Bredband: Sverige om EU:s radiospektrumpolitik (9 June 2011).

Grahnlaw mentioned Sweden as an inspiring example for other EU member states with regard to both competitiveness and broadband roll-out. Without discarding the ongoing IT strategies for various issues, the Swedish government is working on an umbrella Digital agenda, modeled on the Digital Agenda for Europe: EU2020: Sweden from Broadband strategy to Digital agenda (10 June 2011).

***

Future blog posts will discuss the interplay between the EU institutions and some of the more competitive member states with regard to economic reform policies (Europe 2020 strategy), especially the Digital Agenda.



Ralf Grahn

EU2020: Sweden from Broadband strategy to Digital agenda

If the European Union wants the Europe 2020 (EU 2020) growth strategy to counter the decline in competitiveness, one of the places to look is Sweden, which successfully combines economic progress and social inclusion.

One of the seven flagship initiatives of the EU2020 strategy is the Digital Agenda for Europe.

The first Digital Agenda Scoreboard SEC(2011) 708 and the country-specific data show that Sweden is one of the leading European countries with regard to broadband, Internet usage and eGovernment, as well as the adoption of EU legislation and progress on regulatory issues.


Broadband strategy

Previously, the Swedish government took strategic initiatives to support digitalisation in several key policy areas via an eGovernment action plan, a broadband strategy for Sweden and a national IT strategy for health care and social services.

For instance, in November 2009 the government of Sweden published a national strategy for broadband development, including an English version:

Broadband strategy for Sweden (Government Offices of Sweden, Ministry of Enterprise Energy and Communications; 36 pages)

The Swedish Post and Telecom Agency PTS has just reported on the follow-up of the government's broadband strategy, the roll-out of broadband infrastructure and the Swedish telecom market (links under Latest documents).


Digital agenda

Without discarding the ongoing strategies, in the footsteps of the EU Digital Agenda the Swedish government is now broadening its IT policy work by preparing its national Digital agenda:

The digital agenda will supplement ongoing initiatives. It will coordinate IT measures in areas such as security, infrastructure, skills provision, trust, accessibility, functionality, standards, entrepreneurship and innovation.

The government clearly wants Sweden to stay on the top in the digital world:

The digital agenda will be a cross-cutting, coherent strategy for the whole of Sweden that aims to make full use of the benefits of information technology. The digital agenda will set clear objectives for all relevant areas so that Sweden can continue to be the most successful digital economy.

The Government's ambition is for Sweden to be at the forefront in using IT to achieve growth, welfare, democratic and climate objectives. The role of the Government is to direct and create an appropriate regulatory framework, and in other ways give the market good prospects of offering solutions.

Visit Sweden and the other Nordic countries – at least digitally – for hope-inspiring views for an old and sometimes ailing Continent.



Ralf Grahn

EU Commission: Radio spectrum policy programme (RSPP) proposal

In September 2010 the Commission proposed the first Radio Spectrum Policy Programme (RSPP) for the European Union. The RSPP proposal is available in 22 official EU languages.

The English pdf version of the proposed radio spectrum decision, based on Article 114 TFEU on approximation (harmonisation) of laws:

Proposal for a DECISION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL establishing the first radio spectrum policy programme; Brussels, 20.9.2010 COM(2010) 471 final (20 pages)


Wireless single market etc.

Improved use of scarce radio frequencies is key to new and better wireless broadband services, in line with the growth, competitivensess and employment objectives of the Europe 2020 strategy (EU2020) and the Digital Agenda for Europe.

According to the Commission the first multiannual RSPP runs until 2015 and it is intended to serve a number of aims, among which:

The strategic planning and harmonisation of spectrum use at Union level should enhance the single market for wireless electronic communications services and equipment as well as other Union policies requiring spectrum use, thus creating new opportunities for innovation and contributing to economic recovery and social integration across the Union, while at the same time respecting the important social, cultural and economic value of spectrum. To this end, the Union therefore needs a policy programme that covers the internal market in all Union policy areas involving the use of spectrum such as electronic communications, research and development, transport and energy.

Aim and main principles

The first two Articles of the proposed decision express the Commission's view of the aim and the guiding principles:

Article 1
Aim

This Decision establishes a radio spectrum policy programme for the strategic planning and harmonisation of the use of spectrum to ensure the functioning of the internal market.


Article 2
Application of general regulatory principles

Member States shall cooperate with each other and with the Commission in a transparent manner, in order to ensure the consistent application of the following general regulatory principles across the Union:

(a) encouraging efficient use of spectrum to best meet the increasing demand for use of frequencies;

(b) applying technology and service neutrality in the use of spectrum for electronic communications networks and services, in accordance with Article 9 of Directive 2002/21/EC (Framework Directive), and where possible for other sectors and applications, in such a way as to promote efficiency of spectrum use, in particular by fostering flexibility, and to promote innovation;

(c) applying the least onerous authorisation system possible in such a way as to maximise flexibility and efficiency in spectrum usage;

(d) guaranteeing the functioning of the internal market, in particular by ensuring effective competition.

These Articles are followed by provisions about specific policy objectives.



Ralf Grahn

EU Council presidency trio and European Digital Agenda (continued)

Yesterday’s blog post European Digital Agenda: EU Council presidency trio Spain, Belgium and Hungary (2 January 2010) brought us about halfway through the [Draft] 18 month programme of the Council (dated 27 November 2009; document 16771/09; 89 pages).

The presidency trio programme placed the successor of the general Lisbon strategy for growth and jobs in a central position.

In my view, economic reform is one of the crucial areas of action for the European Union, but the EU and especially the member states have a built a wide credibility gap to bridge, after a Lisbon strategy decade of lofty aims and disappointing results.

The EU member states have the burden of proof: Show us, how the EU 2020 strategy is going to be better?



Telecommunication


Until we reached the sub-heading Telecommunication, on page 43, we had found only the general EU 2020 reform framework and a number of separate, but neighbouring issues to the post-i2010 information society strategy, the European Digital Agenda being prepared: Innovation and intellectual property (page 30), Research & Development & Innovation (page 31), as well as Customs (including negotiations on the pluri-lateral ACTA agreement) (page 33).



[Obiter dictum 1: We have to leave for later the question about the Anti-Counterfeiting Trade Agreement (ACTA), and if it should be treated from another angle than Customs control, but civil society actors and the European Parliament should be on the lookout for the coming Commission report and Council conclusions (page 34).]



[Obiter dictum 2: Someone may wonder why I burden my texts with double references, such as a direct link AND references to for instance exact names, dates or document numbers. Well, one answer presented itself, when I tried to return to the Council’s 18 month programme after a few searches elsewhere. The Spanish presidency site was down, but after a few failed attempts it was easy for me to switch to the Consilium website, armed with the document number 16771/09. Using simple search, I was able to find the [Draft] programme through the Council web pages and continue my work.]



Broadband access


If not in the same class as the air we breathe and water to drink, universal access to broadband is of fundamental importance if we want to see an inclusive knowledge society in Europe. The first paragraph under Telecommunication is therefore a cornerstone of the European Digital Agenda being prepared (page 43):

The Presidencies will launch work on the new scope of the universal service in electronic communications and on the incorporation of the broadband in the scope of universal service on the basis of a Commission communication.

European Digital Agenda


The following paragraph mentions the post-i2010 information strategy as a priority (page 44):

The approval of the New Strategy 2010-2015 for the promotion of the Information Society (i2010) will be a main priority.

Although left unnamed, this is the European Digital Agenda we have been chasing.



Other Telecommunication aims


The rest of the Telecommunication text mentions important ingredients, which are worth quoting:

The three Presidencies will foster the deployment of next generation networks, both in infrastructure and services, on the basis of the forthcoming Commission Recommendation.

Work on network security, electronic commerce and protection of intellectual property in Internet and the fight against piracy will be promoted.

The extended mandate of the European Network and Information Security Agency (ENISA) will expire in March 2012. Taking into account the outcome of the review of the regulatory framework for electronic communications, the Presidencies will initiate discussions on the future of the ENISA.

The Presidencies will further contribute to the development of the Internet of the Future. New challenges such as the extension of the universal service, network neutrality, broadband on mobile, convergence of fixed and mobile networks and the development of the internet of things will be examined.

Special attention will be given to the development of the European Action Plan for eGovernment for 2010-2015 and the electronic rights of citizens to interact with government and with businesses.

The Presidencies will coordinate and prepare for the upcoming World Radiocommunications Conference in 2011 (WRC-11) in a way to ensure consistency with the Union's policies and principles.

As regards postal services, the Presidencies will coordinate the EU position at the UPU Strategic Conference (Nairobi, 21 to 25 September 2010).

This is about as much as we can decently cram into one post, so we continue our search in one or more blog posts on the European Digital Agenda.






Ralf Grahn



P.S. Erkan Saka is a prolific blogger about politics, culture and life in Turkey, Europe and elsewhere. A must read, Erkan’s Field Diary is one of the nearly 500 great euroblogs listed on multilingual Bloggingportal.eu, our common “village well” for fact, opinion and gossip on European affairs.



While you’re at it, why not pop over to read Grahnlaw’s sister blogs, Grahnblawg in Swedish and Eurooppaoikeus in Finnish?