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Q2 2004: no growth for Internet in Belgium

Source: ISPA press release via Belga.

The total (narrowband + broadband for residential + business) number
of active Internet connections in Belgium (1.945.000) remained
constant (+0.1%) in the second quarter of 2004.

Although Belgian Internet Providers such as Versatel, Telenet,
Belgacom and others introduced new low-cost broadband products, the
percentage growth of broadband is at an all-time low (+4.5%).

The second quarter of 2004 was very slow for the Belgian Internet
market. Overall growth of the number of connections was virtually
zero, with only an additional net 2.000 connections for an overall
total of 1.9 million connections.

In the residential market, the total number of connections even
declined a bit (-0.2% to a total of 1.59M), due to a continued
decrease in the number of dial-up connections not compensated fully
by a relatively small growth in broadband connections (+4.5%).

Broadband connections (cable and DSL) now comprise almost 71% of all
residential connections.

In the business market, there was a small overall growth of 1.5% (to
356.000) connections. Again, the growth came only from broadband
connections (+4.7%), while the number of other types of connections
continues to decrease.

Earlier this year, many Belgian Internet providers introduced
so-called "light" products, which are low-cost versions of their
broadband internet access products. The purpose was both to increase
the conversion rate from dial-up to broadband and to attract new
users. While these "light" versions certainly attract a number of
customers, they have not increased the total number of connections,
while the conversion rate from dial-up to "light" customers is not
significant. In fact the overall growth of broadband (+4.5%) in the
past quarter is the lowest since broadband was introduced (previous
quarter +8.7%; last quarter of 2003 +9.9%; and before that: 9%, 7%,
14%, 16%, etc.). The only effect the new low-cost products have had
is an accelerated replacement of narrowband subscribtions by
broadband. They did not succeed in convincing non-internet users to
go to internet.

The basic reason for the flat growth of internet connections is the
relatively low PC penetration in Belgium. Additionally, those
families that do not yet own a PC are not really inclined to acquire
one. According to a study by InSites, only 5% of families who do not
yet have a PC plan to buy one.

Fundamental new measures have to be taken to raise the interest of
families in the PC and its applications. Only then can the threat of
a knowledge gap or digital divide be avoided. ISPA urges the Belgian
government to take necessary measures to stimulate interest as soon
as possible.