Companies need to improve their marketing to ensure that Europeans understand the value of broadband

Staffan Engdegard Jupiter Research

But the research blames the consumer for failing to understand the benefits of broadband rather than the slow installation process.

According to Jupiter, the big challenge facing suppliers is to create customer demand by communicating the benefits of broadband effectively.

Enticing customers

Currently, most people are only aware that broadband will make the internet work faster and do not know much other information.

Broadband penetration in 2000

Nordic 2.3% Germany 0.9% UK 0.3% France 0.6% Spain 0.2% France 0.1% source: Jupiter MMXI

More enticing services need to be promoted if customers are going to pay the relatively high price.

Features such as an unlimited choice of films on demand, improved music download quality, the ability to play games over the net with hundreds of people, software rental, fast e-books, e-shopping and e-learning.

It currently costs about 200 euros (�123) for a connection and then about 50 euros (�30) for a monthly subscription across Europe, a total of 800 euros a year (�500).

Broadband penetration in 2005

Nordic 30% Germany 17% UK 15% France 10% Spain 8% France 10% source: Jupiter MMXI

In a survey, Europeans said the main reason they would install broadband was to keep the telephone line free whilst surfing the net.

But at that price, installing an extra phone line would seem like a better option.

But while the high price of broadband looks set to deter customers, companies are also complaining that the cost of installing the service is too great to make it worthwhile.

In the UK, WorldCom, RSL Communications, Thus and Versatel have already pulled out of the race because they say it is not profitable.

Nordic winners

Jupiter says the take up will be gradual over the next five years, with only 14% of European households using broadband by 2005.

"The high prices currently being charged for broadband access means that the majority of consumers are discouraged from the technology," said Mr Engdegard, author of the report.

Jupiter forecasts that the Nordic region will adopt broadband faster that the rest of Europe, with 30% of households in Sweden, Finland, Norway and Denmark hooked-up by 2005.

The UK is expected to adopt broadband at a slower rate, with 15% of the population expecting to use the faster services by 2005.