Broadband Day

1
Keeping Belgium at the forefront of broadband

• Broadband Day
• EC Information Society DGJanuary 28, 2003
• Bernard Delvaux, Executive Vice President ANS
• Belgacom

2
OBJECTIVES OF PRESENTATION

• Analyze the situation of broadband in Belgium and
  understand the reasons for its success
• Identify the hurdles to the further development
  of broadband in Belgium
• Suggest key levers for addressing hurdles

3
THE SITUATION OF BROADBAND IN BELGIUM DEMONSTRATE
THE GROWTH POTENTIAL OF BROADBAND AND THE WAY TO
ACHIEVE IT

• More than 95 coverage

• ADSL up to 3 Mpbs (Download)
• Cable 4 Mpbs (Download), shared.

• Approximately 40 EUR a month, flat fee (depending
  on service provider) for basic service

• 18 penetration of households at end 2002
• 200 000 connections to small businesses

• The reason for the success so far of broadband in
  Belgium lies in the intense competition between
  cable (e.g., Telenet) and xDSL (e.g., Belgacom).

Source ISPA Belgacom
4
EVOLUTION OF THE PENETRATION OF CABLE AND ADSL
TECHNOLOGIES IN BELGIUM
Belgacom estimates
Number of connections
49
9
43
Source Belgacom
5
CHALLENGES FOR FURTHER DEVELOPMENT OF BROADBAND
IN BELGIUM
6
LEVERS FOR FURTHER DEVELOPMENT OF BROADBAND (1/3)
Promote demand
PC literacy

• Reduce costs to user
• Improve awareness of benefits
• Educate
• Encourage content creation

PC penetration
Price PC
Credible alternative CPE
Awareness of benefit
Ensure high penetration of broadband technologies
today (including fighting digital divide)
Compelling application / content
On-line penetration in PC population
Security and parental concerns
Price broadband
Broadband penetration in on-line population
Ensure conditions to stay in the lead for
tomorrow's broadband
Awareness broadband
Compelling specific applications
Ensure research and development of solutions
High RD bets
Ensure conditions for successful migration to
tomorrow's technologies
Regulatory uncertainty
Ensure conditions for profitability on
investments (infrastructure)
Network taxation risk
Other ROI uncertainty
7
LEVERS FOR FURTHER DEVELOPMENT OF BROADBAND (2/3)
Support RD
PC literacy

• RD for enhancement and development of
  alternative CPE
• RD for future technologies
• RD for future applications
• RD for security tools

PC penetration
Price PC
Credible alternative CPE
Awareness of benefit
Ensure high penetration of broadband technologies
today (including fighting digital divide)
Compelling application / content
On-line penetration in PC population
Security and parental concerns
Price broadband
Broadband penetration in on-line population
Ensure conditions to stay in the lead for
tomorrow's broadband
Awareness broadband
Compelling specific applications
Ensure research and development of solutions
High RD bets
Ensure conditions for successful migration to
tomorrow's technologies
Regulatory uncertainty
Ensure conditions for profitability on
investments (infrastructure)
Network taxation risk
Other ROI uncertainty
8
LEVERS FOR FURTHER DEVELOPMENT OF BROADBAND (3/3)
Regulate smartly
PC literacy

• Regulation leaves enough predictable return for
  infrastructure investors
• Create even playing field for fair competition at
  each level service providers, content and
  application developers, and CPE manufacturers
• No network taxation

PC penetration
Price PC
Credible alternative CPE
Awareness of benefit
Ensure high penetration of broadband technologies
today (including fighting digital divide)
Compelling application / content
On-line penetration in PC population
Security and parental concerns
Price broadband
Broadband penetration in on-line population
Ensure conditions to stay in the lead for
tomorrow's broadband
Awareness broadband
Compelling specific applications
Ensure research and development of solutions
High RD bets
Ensure conditions for successful migration to
tomorrow's technologies
Regulatory uncertainty
Ensure conditions for profitability on
investments (infrastructure)
Network taxation risk
Other ROI uncertainty
9
CONCLUSIONS

• In Belgium, fierce interplatform competition
  offers to customers a lot of value in terms of
  broadband availability, service and price.
• Investors require a reasonable and predictable
  ROI to secure investments in new networks and
  services. Regulation could deter further
  investments.
• Country specific situations make it difficult to
  fix detailed regulatory framework at european
  level.
• Convert vicious circle into a virtual circle
  while tackling PC penetration is a must. Belgian
  authorities and industry players are entering
  into close cooperation.