The Broadband market in Italy Research Paper Example | Topics and Well Written Essays - 3000 words

The Broadband market in Italy - Research Paper Example In the third quarter of 2008 the broadband market subscribers was approximately 18 percent of the population. Italy has consistently been ranked as one of the countries with the lowest broadband penetration in Europe, the country lacked cable and DSL infrastructure and therefore market penetration was considerably low. The entry of other firms in the industry led into an increase in penetration and in 2005 Italy recorded the highest growth of broadband in Europe. Population growth rates in Italy have been decreasing over the last several years with current rates near zero. Major cities are densely populated and most of the population lives in flats and blocks that make FTTH and DSL more appropriate to provide broadband services. Vigevano(2002) pointed out that there were some barriers to the penetration of broadband in Italy and they included digital divide and lack of competition, this means that in rural area, broadband services were less profitable and therefore majority of the providers concentrated more in urban area. Government has not typically concerned itself with encouraging more s ophisticated use of the internet such as online transactions, and focus on European Computer Driving Licence(ECDL) provided to teachers, government employees, students this leads to increasing the awareness and skills of individuals. Vigevano(2002) points out that there are some barriers to the penetration of broadband in Italy, some of the factors that he highlighted include lack of capital to improve infrastructure, this hinders the growth of broadband in Italy. ... pointed out that there were some barriers to the penetration of broadband in Italy and they included digital divide and lack of competition, this means that in rural area, broadband services were less profitable and therefore majority of the providers concentrated more in urban area. Government has not typically concerned itself with encouraging more sophisticated use of the internet such as online transactions, and focus on European Computer Driving Licence(ECDL) provided to teachers, government employees, students this leads to increasing the awareness and skills of individuals. Vigevano(2002) points out that there are some barriers to the penetration of broadband in Italy, some of the factors that he highlighted include lack of capital to improve infrastructure, this hinders the growth of broadband in Italy. He also pointed out that there are regulatory issues that pose uncertainty regarding rights; another problem is digital divide whereby there is high adoption of broadband in certain area and in others low adoption and therefore firms concentrate only in large cities. According to House (2001) the shape of the S curve depends on the time period and saturation level and that the saturation level is less than 100%, he also states that saturation is driven by both the supply side and demand side, saturation level depends on the appropriateness of the technology and Economies of scale reducing prices increasing level of acceptance to peak. Estimated Level of Saturation The chart below summarises Penetration rate of Broadband in Italy from 2001-2008 Diagram 1: From the chart it is evident that broadband users(households and business) per 100 individuals has gradually increased over the years, it is also evident that in 2001 to 2002 is the introduction