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Telecommunication Markets pp 187–206Cite as

Drivers and Inhibitors of Countries’ Broadband Performance – A European Snapshot

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Part of the book series: Contributions to Economics ((CE))

Abstract

There is large variance regarding diffusion of broadband Internet among European countries. Some nations are criticised for a presumably underdeveloped broadband market. This study analyses broadband Internet access take-up using a wide range of variables to explain European countries’ broadband position and to anticipate future market developments. Correlation results for the EU-25 countries are presented using a time lag design of introducing the influencing variables for the year 2003 and the outcome criteria for 2005/2006. Findings show that (1) economic prosperity and (2) computer literacy initiate broadband penetration differences. Further, strong effects are identified for (3) English language proficiency, which affects the attractiveness of global Web content for Internet subscribers, (4) teleworking, which increases the base of potential early broadband adopters, (5) service sector employment that positively correlates with the need for information access, and (6) unemployment, which reduces the spending power of consumers. Privatisation, independent regulator, and LLU lead times have a significant positive impact on broadband development, while intra-technology and general market concentration are negatively associated with broadband uptake. Inter-technology (e.g., Cable vs. DSL) competition is not significant for broadband take-up in the EU-25 sample.

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Notes

  1. 1.

    1 “Broadband” is used for any Internet access technology that provides faster data transfer than traditional dial-up connections by using higher bandwidth and some form of packet switching and “always on” capability. Cf. Bauer et al. (2003, p. 4), Gerpott (2007, p. 799), Maldoom et al. (2005, p. 3). Commonly, DSL (Digital Subscriber Line), Cable, Fixed Wireless, Satellite, third generation mobile, and fiber-to-the-home are technologies discussed as broadband Internet access platforms. Cf. Distaso et al. (2006, pp. 89–90), Maldoom et al. (2005, pp. 11–24), Papacharissi and Zaks (2006, pp. 65–67). DSL and (in some countries) cable are by far the dominant broadband technologies today.

  2. 2.

    2 Benefits of broadband are usually debated qualitatively (cf. Bauer et al. 2003, p. 3; Frieden 2005, pp. 596–599; Maldoom et al. 2005, pp. 8–11) but are seldomly quantified (cf. Lehr et al. 2006).

  3. 3.

    3 A comprehensive summary of the literature is provided in Gerpott (2007, pp. 801–805); see also Bauer et al. (2003, pp. 9–10) for additional references.

  4. 4.

    4 In turn, broadband is also hoped to positively impact economic development (cf. the discussion of broadband benefits by Bauer et al. (2002), Chinn and Fairlie (2007), Lehr et al. (2006, pp. 4–6), European Commission (2006a)).

  5. 5.

    5 Additional socio-demographic characteristics cited in micro-level studies of broadband adoption (e.g., age, gender, residence area, ethnic group, income, or education, cf. Chaudhuri and Flamm 2005; Gerpott 2007) have also been analysed at an aggregate level across countries (see partially Cava-Ferreruela and Alabau-Muñoz 2004, pp. 6–10; Chinn and Fairlie 2007, pp. 30–35) but are neglected here.

  6. 6.

    6 Alternative definitions of penetration, particularly with different baselines, e.g., households or people aged 14 to 65, are highly overlapping (correlations exceeding r = 0.98). Therefore, the inclusion of additional common broadband indicators with low differentiation is not taken up.

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Authors
  1. Nejc M. Jakopin
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Editors and Affiliations

  1. Strathclyde Business School, University of Strathclyde, George St. 40, Glasgow, G11QE, United Kingdom

    Peter Curwen

  2. Fak. Wirtschaft- und Sozialwissenschaft, Universität Erlangen-Nürnberg, Lange Gasse 20, Nürnberg, 90403, Germany

    Justus Haucap

  3. Wirtschaftswissenschaften (ZBW), Deutsche Zentralbibliothek für, Neuer Jungfernstieg 21, Hamburg, 20354, Germany

    Brigitte Preissl

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Jakopin, N.M. (2009). Drivers and Inhibitors of Countries’ Broadband Performance – A European Snapshot. In: Curwen, P., Haucap, J., Preissl, B. (eds) Telecommunication Markets. Contributions to Economics. Physica, Heidelberg. https://doi.org/10.1007/978-3-7908-2082-9_11

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