USTelecom US vs. EU Broadband Trends 2012-2020

US vs. EU Broadband Trends 2012 – 2020

KEY FINDINGS............................................................................................................................................................................................1 US VS. EU BROADBAND DEPLOYMENT :: Coverage

Households Covered with Fixed Broadband at Any Speed.......................................................................... 2 Households Covered with Fixed Broadband at High Speed........................................................................3 Households Covered with Fixed Broadband ≥100 Mbps................................................................................4 Households with Two or More Facilities-Based Competing Providers................................................ 5 Households with Two or More Wired Facilities-Based Competing Providers................................ 6 US VS. EU BROADBAND ADOPTION :: Take-Up

Share of Households Covered with Fixed Broadband Subscription at Any Speed......................7 Share of Households Covered with Fixed Broadband Subscription at High Speed.................. 8 Share of Households Covered with Fixed Broadband Subscription ≥100 Mbps............................9 Share of Households with Broadband Subscriptions at Three Speed Intervals........................10 Why is the US Ahead?............................................................................................................................................................11

USTELECOM PARTNER | Arthur Menko, BPI-Telcodata

KEY FINDINGS The US continues to handily lead the EU on three critical connectivity metrics: consumer broadband infrastructure deployment, broadband adoption and facilities-based competition.

• Deployment: US leads by 11 percentage points ≥30 Mbps; +25 pp ≥100 Mbps • Adoption: US leads by 10 pp ≥25 Mbps; +21 pp ≥100 Mbps • Competition: US benefits from nearly twice the fixed facilities-based competition of the EU overall; when comparing rural areas, the US lead extends to 7x.

NEW IN 2020: US rural deployment now leads overall EU broadband deployment, despite the added costs and challenges associated with rural deployment • Deployment ≥30 Mbps: US rural at 91%; EU overall at 87%; EU rural at 60% • The US infrastructure advantage is most significant when comparing rural areas, despite the EU definition of “rural” including more population-dense areas (which allows costs to be spread across a much larger customer base).

NEW IN 2020: US extends its lead in consumer broadband adoption at any speed, and a majority of Americans now have subscriptions ≥ 100 Mbps.

• US consumer broadband adoption lead grows by 6 pp YOY - 2019: US lead +11 pp; 2020: US lead +15 pp • Both US and EU see healthy growth in ≥100 Mbps subscriptions - 55% of connected US households and 34% in EU had ≥100 Mbps subs in 2020.

- YOY increases of 7 pp and 6 pp, respectively US lead on consumer adoption likely fueled by US broadband affordability. US broadband prices are holding steady—and even declining for millions of Americans—despite rising costs for most other essential goods and services.

US benefits from a 3:1 advantage in per household broadband capex. This can be attributed to a US policy framework that encourages investment in facilities-based competition rather than heavy government regulation of services.

1

US VS. EU BROADBAND DEPLOYMENT :: COVERAGE

HOUSEHOLDS COVERED WITH FIXED BROADBAND AT ANY SPEED US & EU in All Areas and Rural Only KEY TAKEAWAYS The US leads the EU in fixed broadband coverage at any speed.

Rural coverage in the US now rivals all EU coverage— despite the fact that rural areas are more costly to serve.

The US rural edge is substantial, despite the more restrictive US definition of rural.

Any Speed is any fixed broadband speed>200 Kbps.

EU ALL AREAS

US ALL AREAS

100%

95%

90%

US RURAL

98%

98%

98%

97%

96%

95%

95%

EU RURAL

96%

99% 97%

99% 97%

95%

94%

93%

92%

92%

91%

96%

98%

99% 97%

95%

80%

75%

83%

2012

84%

84%

2013

2014

85%

2015

86%

2016

86%

2017

2018

2019

The EU defines rural areas as ≤ 263 people per square mile. In contrast US rural areas on average only 17.4 people per square mile.

A majority (57% ) of the EU’s rural blocks would be considered non-rural in the US.

US VS . EU BROADBAND TRENDS 2012 – 201 9

90%

87%

SOURCES: FCC, NTIA AND EC’S DESI DATA

2

99% 98%

96%

90% 85%

97%

2020

COVERAGE :: US VS. EU BROADBAND DEPLOYMENT

HOUSEHOLDS COVERED WITH FIXED BROADBAND AT HIGH SPEED US & EU in All Areas and Rural Only EU ALL AREAS

US ALL AREAS

EU RURAL

US RURAL

KEY TAKEAWAYS

100% 90% 80% 70% 60% 50%

89%

55% 48%

40%

87%

91%

60%

45%

12% 2012

19%

24%

2013

2014

US rural high-speed coverage now exceeds all EU highspeed coverage.

US lead in 2020: • 11 percentage points in all areas

52%

• 31 pp in rural areas

36%

20%

0%

59%

48%

30%

10%

98%

79%

74%

70%

66%

60%

83%

80%

77%

72%

67%

63%

56%

54%

89%

84%

82%

95%

94%

93%

91%

The US deployment lead grows when considering only high-speed offerings.

27%

2015

2016

2017

2018

2019

2020

SOURCES: FCC, NTIA AND EC’S DESI DATA

US speeds: ≥ 25/3 (2012-14) and 30 Mbps (2015-2020); EU speeds: ≥ 30 Mbps down and any speed up (known as Next Generation Access).

3

US VS. EU BROADBAND DEPLOYMENT :: COVERAGE

HOUSEHOLDS COVERED WITH FIXED BROADBAND ≥100 MBPS US & EU in All Areas KEY TAKEAWAYS The higher the speed, the more the US pulls ahead in terms of the broadband services available to consumers.

The US lead extends to 25 pp for ≥100 Mbps in 2019 (most recent available EU data).

US coverage continues to grow in 2020.

EU ALL AREAS

US ALL AREAS

100%

92%

90%

90% 80% 75% 60% 50% 40%

40%

54%

53%

52% 44%

46%

61% 49%

63% 55%

61%

67%

30% 20% 10% 0%

2013

2014

SOURCES: FCC, NTIA AND EC’S DESI DATA

4

93%

US VS . EU BROADBAND TRENDS 2012 – 201 9

2015

2016

2017

2018

2019

2020

COVERAGE :: US VS. EU BROADBAND DEPLOYMENT

HOUSEHOLDS WITH TWO OR MORE FACILITIES-BASED COMPETING PROVIDERS US & EU in All Areas and Rural Only EU ALL AREAS

US ALL AREAS

EU RURAL

US RURAL

100% 90%

95%

94%

91%

91%

90%

90%

KEY TAKEAWAYS

80%

40%

70%

70%

68%

66%

60% 50%

83%

78%

70%

43%

43%

44%

45%

45%

45%

7%

8%

9%

11%

11%

11%

30% 20% 10% 0%

2015

2016

2017

2018

2019

There is over 2x more facilitiesbased competition in the US than in the EU. The US lead grows to more than 7X when comparing rural areas.

Indeed, US rural areas benefit from nearly twice as much facilitiesbased competition as all EU areas.

2020

SOURCES: FCC, NTIA AND EC’S DESI DATA

US: Two or more fixed providers—any technology, including fixed wireless. | EU: A cable and traditional telecom provider.

5

US VS. EU BROADBAND DEPLOYMENT :: COVERAGE

HOUSEHOLDS WITH TWO OR MORE WIRED FACILITIES-BASED COMPETING PROVIDERS US & EU in All Areas and Rural Only KEY TAKEAWAYS Even if wireless ISPs (WISPs) are removed from the comparison, the US lead on facilitiesbased competition remains nearly 2X the EU in all areas.

Even with this more conservative tally, the US lead remains greater than 5X when comparing rural areas.

EU ALL AREAS

US ALL AREAS

EU RURAL

100% 90%

84%

85%

86%

86%

87%

87%

49%

50%

51%

53%

55%

80% 70% 60% 50% 40%

49% 43%

43%

44%

45%

45%

45%

7%

8%

9%

11%

11%

11%

30% 20% 10% 0%

2015

2016

SOURCES: FCC, NTIA AND EC’S DESI DATA

6

US RURAL

US VS . EU BROADBAND TRENDS 2012 – 201 9

2017

2018

2019

2020

TAKE-UP :: US VS. EU BROADBAND ADOPTION

SHARE OF HOUSEHOLDS WITH FIXED BROADBAND SUBSCRIPTION AT ANY SPEED EU

US

KEY TAKEAWAYS

100%

65%

67%

68%

70%

2016

77%

2015

75%

2014

74%

2013

60%

73%

72%

2012

70%

79%

2020

76%

84%

2019

72%

75%

82%

2018

80%

86%

82%

2017

90%

92%

50%

Not only do more Americans have access to high-speed broadband, but significantly more Americans have adopted service in their homes—with US take-up rates 15 percentage points ahead of EU rates.

40% 30% 20% 10% 0%

SOURCES: FCC, NTIA AND EC’S DESI DATA

7

US VS. EU BROADBAND ADOPTION :: TAKE-UP

SHARE OF HOUSEHOLDS WITH FIXED BROADBAND SUBSCRIPTION AT HIGH SPEED EU

KEY TAKEAWAYS US residential takeup of high-speed broadband service is 10 percentage points greater than the EU.

US

77%

80%

69%

70%

64%

60%

57% 44%

40%

10%

53% 44%

35%

30% 20%

60%

50%

50%

36%

26% 13%

18%

67%

29% 22%

10%

SOURCES: FCC, NTIA AND EC’S DESI DATA

EU speeds: ≥ 30 Mbps. US speeds: ≥ 25/3

8

US VS . EU BROADBAND TRENDS 2012 – 201 9

2020

2019

2018

2017

2016

2015

2014

2013

2012

0%

TAKE-UP :: US VS. EU BROADBAND ADOPTION

SHARE OF HOUSEHOLDS WITH FIXED BROADBAND SUBSCRIPTION AT ≥ 100 MBPS EU

US

KEY TAKEAWAYS

60%

55% 48

50%

42% 40%

At the fastest speeds, the US has a 21 percentage point lead over the EU on broadband take-up among consumers.

33% 34%

30%

28%

20% 20%

21%

13% 8%

2020

2019

2018

2017

.5%

15%

8% 2016

.1%

5% 2014

2012

0%

3% 2013

2%

12%

2015

10%

SOURCES: FCC, NTIA AND EC’S DESI DATA

9

US VS. EU BROADBAND ADOPTION :: TAKE-UP

SHARE OF HOUSEHOLDS WITH BROADBAND SUBSCRIPTIONS AT 3 SPEED INTERVALS < 25 MBPS

≥ 25 MBPS & < 100 MBPS

≥ 100 MBPS

KEY TAKEAWAYS More American consumers are adopting broadband overall, and far more are choosing the highest speed service offerings relative to EU consumers.

20%

10%

10%

0%

0%

SOURCES: FCC, NTIA AND EC’S DESI DATA

10

US VS . EU BROADBAND TRENDS 2012 – 201 9

2020

20%

2019

30%

2018

30%

2017

40%

2016

40%

2015

50%

2014

50%

2020

60%

2019

70%

60%

2018

70%

2017

80%

2016

80%

2015

90%

2014

90%

2013

100%

2012

100%

2013

EU

2012

US

WHY IS THE US AHEAD?

WHY IS THE US AHEAD? TELECOM INFRASTRUCTURE INVESTMENT 2012 – 2018 EU

US

KEY TAKEAWAYS INVESTMENT

CUSTOMER BASE

2012-2018 CUM

# OF HOUSEHOLDS

PER HOUSEHOLD

AVG ANNUAL INVESTMENT

US $708

US $4,955

US $616B

Broadband companies invest far more in the US as a whole…

US +75% (CUM) …Despite a far smaller customer base

EU $353B EU 219M

US 124M

EU $1,610

EU $230

SOURCES: FCC, NTIA AND EC’S DESI DATA

US -43% (# of households vs. EU) …investing far more per household US +208% (CUM) …every year US +$478 household (Avg Annual Investment)

Denominated in 2018 US dollars. All figures are 2012-2018 CUM. Investment figures include residential, business and mobile services.

11

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