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The proportion of enterprises with broadband access to the internet in Cyprus is the lowest recorded in the EU25, according to the latest figures from the statistical service Eurostat. Based on figures from the first quarter of 2005, figures show that only 40% of Cypriot enterprises have broadband (higher-speed) access--the lowest proportion in the EU. This compares with an EU average of 65% and a high of 82% in Denmark, a country which also ranks top or near top in many global competitiveness indicators.
Household broadband access is also the lowest in the EU, at 4%, compared with an EU average of 23% and a high of 54% in the Netherlands and 63% in non-EU member Iceland. It should be noted that the figures on broadband business access exclude France, Malta and Portugal, for which there are no data.
Slightly more encouragingly, 85% of Cypriot businesses have some form of internet access, not far short of the EU average of 91%, while 32% of households have internet access.
There is one important reason why the broadband market has so far remained small in Cyprus and two important reasons why it will not remain that way for long.
The first reason is that there is a high ratio of fixed lines in Cyprus - of about 1.8 per household - thanks to historically low monthly fees.
Many households put in a second line to cope with the endless calls of their teenage children.
According to CYTA data, there were 415,087 fixed lines in Cyprus in May 2005. This compared with around 225,000 households. That translates into 1.8 lines per household, or if business lines are taken into account, perhaps around 1.5.
When using the internet, therefore, many households can dial up using the second line (now redundant because of the ubiquitous mobile phone) without disturbing their usual telephone land line.
However, the financial and other incentives to switch to broadband are rising.
First, CYTA doubled the fixed-line monthly fee some months ago, leading many households and businesses to cut additional lines.
CYTA data show that the number of fixed lines fell from 424,104 in December 2003 to 415,087 in May 2005.
The second reason is competition. There are already around five internet service providers and PrimeTel will come in with a broadband, telephone plus TV offer set to undercut rivals.
This will no doubt spark price-cutting across the board and, thus bringing down broadband access to more attractive levels. | 
