Discussion Papers

Christin-Isabel Gries

Entwicklung der DSL-Märkte im internationalen Vergleich
Nr. 257 / November 2004

Summary

In most European countries broadband internet access is mainly based on DSL. This holds especially for the German market, where 98% of all broadband connections rely on DSL-technology. In contrast to this, in countries like the UK, Belgium, the Netherlands and Denmark cable technology plays a major role in the broadband market as well.

At the end of 2003 broadband penetration in Germany reached 12% and was about European average. Deutsche Telekom AG (DTAG) dominated the DSL market with a market share of 91% (end of 2003). However, competition in the DSL market has been increasing since several years and the market share of DTAG has been continuously falling. Among the most important competitors of DTAG are the regionally focused City Carriers who offer own DSL accesses to end customers. Resellers who are important players in international DSL markets like the UK and Sweden, did not appear in the German market until this year. Since summer 2004, the business model of DSL resale is being implemented in the German market. In the first half year of 2004 the number of DSL subscribers grew strongly and price competition is increasing.

Since DSL markets emerged around the year 2000, new competitors have been gaining market shares slower than initially expected. The reasons behind this as well as potential ways to improve the competitive conditions in the market have been intensively discussed. It became apparent that the development of the DSL market is influenced by the interaction of many influencing factors. Among these the regulatory conditions are significant, because they determine the availability and conditions of the access options for DSL competitors. Moreover, the intensity of intra- and intermodal competition influences DSL-penetration. In addition to this, the motivation and preferences of households and the availability of interesting broadband applications effect the diffusion of DSL. The whole DSL market is shaped by political initiatives on national and Europe an level.

Given this background, the study focuses on the most important determinants of the DSL market and analyses relevant developments in an international comparison. It addresses technological and regulatory conditions as well as the development of supply and demand in Germany, the UK and Sweden. [Only German language version available.]

Diskussion Paper is available for download.

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