Recession slows broadband uptake

Mounting recessionary and competitive pressures contributed to a significant drop in subscriber net-additions for Western European broadband operators during the first half of 2009, according to a new SNL Kagan report.

The top 10 fixed broadband providers only saw an average of less than 1.4 million net additions per quarter, compared to 1.9 million per quarter during 2007/2008. Germany’s United Internet and Vodafone were the only operators in the top 10 to accelerate their rate of subscriber additions, due to the acquisitions of Freenet AG and Arcor, respectively.

The SNL Kagan report also looked at subscriber growth over a 10-quarter period (Q4 2006-Q2 2009). On an absolute scale, Deutsche Telecom (DT) added more broadband subscribers from Q4 2006 to Q2 2009 than any other ISP in the region, accounting for 22% of all top 10 operator net additions, or 4.1 million. France’s Iliad and SFR were the fastest growing operators during that period, each with a compound quarterly growth rate (CQGR) of 6.7%. Germany’s Vodafone and DT followed with a CQGR of 5.2% and 4.7%, respectively.

“While the rest of the region is still trying to stabilize following the global financial crisis, stronger macro-economic fundamentals and consumer confidence have allowed German and French telcos to achieve the fastest 10-quarter subscriber growth rates as well as maintain some of the highest growth rates in the first half of 2009,” said SNL Kagan senior analyst Ben Reneker in a statement.