Exploring Potential Natural Monopoly Properties of Broadband Access Networks

It has been stated by certain industry observers that broadband access network economics are becoming a natural monopoly in Europe. We have analysed the cost function of access networks for different technologies and have found that the assertion that they meet natural monopoly properties in all cases is not correct. Industry structure varies greatly with population density, service penetration and demand, and there are several scenarios (urban and metropolitan areas, current service speeds in all areas) where natural monopoly properties do not hold. Incumbency advantages, lower service penetration and demand segmentation may vary industry structure both ways in certain scenarios, but do not disprove our general findings.