Fastweb is an interesting altnet break-out story from Milan, Italy. Fastweb has a two-tiered network composed of a fibre-to-the-home (FTTH) network and the more recent DSL network based on fully unbundled Telecom Italia lines. Taking advantage of Italy's relatively low prices for unbundled local loops, Fastweb is among the leading unbundlers in Europe, with Free based in France (Iliad [2004-02]). Fastweb anticipates passing 6 million households (25% of the total) by 2006 and 10 million by 2010.

Although the prospect of a successful Comcast bid for Disney has receded almost completely, we expect it to come back. The strategic imperative for Comcast to integrate with a leading content producer remains acute. It confronts a reinvigorated and very aggressive competitor in DirecTV. Satellite is rapidly draining high ARPU pay-TV subscribers from the cable companies. Increased expenditure on programming, services and marketing are the only responses possible to combat the erosion.

Ofcom is about to issue a decision that will have a major impact on the way the UK broadband market develops. It concerns the pricing of wholesale DSL connections. The decision will be an important first signal to the market on how the newly-established Ofcom intends to deal with quasi-monopolies like BT.

Broadband took off in 2003 reaching 3.1 million cable and DSL connections at the end of the year. We anticipate a further massive shift to broadband in 2004, but mainly to the benefit of DSL suppliers. DSL has twice the geographic coverage of cable, and Tiscali's recently introduced 150k DSL service is undercutting NTL's own mid-band service in areas of overlap. This report examines the intense struggle for market share being waged by ISPs.

Does Freeview, the free-to-air digital terrestrial television (DTT) service, represent a serious and growing threat to the pay-TV offerings from BSkyB, NTL and Telewest? This report presents the results of a survey we commissioned that strongly suggests that Freeview is starting to drain subscribers from pay-TV platforms.

Location-based services (LBS) have long been credited as a key new mobile data application destined to generate substantial extra revenues for the mobile operators. A number of consumer-focused LBS have been now launched, and in this report we examine their progress and potential, drawing on our own experience and a number of consumer studies.

European digital TV take-up enjoyed a mild recovery in 2003, adding about 4 million households to reach 30 million households at the end of the year. We expect the momentum to build in 2004 and 2005. This is the main conclusion of our assessment of European trends in 2003 of take-up of digital satellite TV (DST), digital terrestrial TV (DTT) and digital cable TV (DCT).

Handset sales in the UK and the rest of Europe have reportedly been strong over the last few months, with camera phones selling well. In this report we look at our most recent survey of UK mobile handset owners to investigate whether this is a result of stronger consumer demand, or whether purchasers have been responding to cheaper offers from mobile operators.

We write regularly about Free, the French ISP that is leading Europe in unbundling local loops. Through its proprietary technology, the Freebox, Free now offers cheap DSL access, free VoIP (voice over Internet) telephone calls and a limited TV offer, over unbundled local loops. Iliad, Free’s parent company, is preparing for flotation and the company has released details about its performance and plans.

As we predicted in our last report on the music business, the end of 2003 saw the beginning of the corporate activity that the industry has been itching to carry out for a decade. In this note, we look at the major record companies’ current position in the world music industry and consider how it is likely to evolve in 2004 and beyond.