Market dominance is limiting competition and smothering take up, says the European Commission

The dominant position of incumbent operators may be affecting the European Union's (EU's) efforts to increase broadband penetration.

Eight of the EU's 19 member states are ahead of the US in the race to increase broadband availability, but the rest of the continent risks falling behind, according to the latest report from the European Commission.

Denmark, Finland, the Netherlands and Sweden all achieved penetration rates of more than 30 per cent by the end of 2007. The UK, Belgium and Luxembourg fell short of this figure, but still beat the US rate of 22.1 per cent.

Incumbent telecoms operators currently control more than 46 per cent of broadband lines and more than 60 per cent of connections in some parts of Europe. This market dominance may be affecting the competitiveness the EU is striving for, said telecoms commissioner Viviane Reding.

"The European regulatory model is designed to increase competition in the telecoms market and this certainly is starting to pay off,” she said.

"However, the job is not yet done. Competition is limited for access to the fixed network which is still provided to 86.5 per cent of customers over the incumbent's infrastructure.

"We must intensify our efforts to reduce the regulatory borders in Europe. Only by opening up the single market for business will Europe become competitive and will consumers benefit from a wide choice of rich and affordable services.”

More than 19 million broadband lines were added across the EU during 2007. The average penetration rate for the continent rose to 20 per cent, generating an estimated revenue of €62bn