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Cable modem wave to hit Europe

September 3, 1999
Web posted at: 3:37 p.m. EDT (1937 GMT)

by Terho Uimonen

internet graphic

(IDG) -- European cable television operators are speeding up the rollout of data and Internet access services, resulting in exponential growth in the number of cable modem users throughout Western Europe, according to new research from International Data Corp. (IDC).

As a result, revenues from cable modem shipments are expected to increase from a mere $33 million in 1998 to almost $550 million in 2003, the market researcher said.

The Benelux region -- where cable TV reaches 90 percent of households -- Austria and France are among the current leaders in rolling out data over cable services, said Richard Mol, Amsterdam-based senior analyst with IDC's European Datacommunications research program.
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Major European markets such as the U.K. and Germany are now also expected to come up to speed over the next few months and 2000, he added.

"The U.K. is obviously a major market, and we expect to see rapid growth in cable modem usage as operators there have already started to upgrade their networks," said Mol.

In Germany, the cable modem market is expected to get a boost now that incumbent telecommunications and dominant cable TV provider Deutsche Telekom has to divest its cable interests, he added.

Cable modem sales are also beginning to pick up in Sweden after cable provider StjärnTV last month dramatically dropped the prices for its Internet-over-cable service. Existing customers now only need to fork out a 495 krona (US$60.40) signing fee, which includes a network adapter card and software, followed by a 295 krona monthly fee for unlimited surfing at speeds up to 500Kbps. The rental for the cable modem is included in the price.

"This is typical for the kind of scenarios we will see around Europe," said IDC's Mol.

Demand among users will also grow rapidly due to increased use of new media-rich applications, and as a result next-generation cable modems must also provide higher bandwidths, IDC said.

The cable modem industry, however, also has to ensure that modems become standards-based, or at least upgradeable to a standard specification, IDC said, since this will result in lower costs and enable retail distribution.

IDC is owned by IDG News Service parent corporation International Data Group.

Terho Uimonen is the Scandinavia bureau chief for the IDG News Service.

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