Broadband subscriptions in the UK exceeded expectations in the last 6 months of 2008 reaching 17.4 million by the end of the year and topping Point Topic’s forecasts by 0.2%.
“DSL operators had a stronger fourth quarter than projected, in particular the local loop unbundlers. While cable did well it didn’t exceed our forecasts,” says Tim Johnson, Chief Analyst at Point Topic.
The success of O2 was the biggest new story of 2008 as far as the fixed broadband market was concerned. Starting the year with only 71,000 broadband lines, it added 270,000 more to increase its market share by 1.5%. Sky has a good 12 months too and built on its accomplishments in previous years to achieve even bigger gains, adding 727,000 lines to reach almost 2 million lines
These successes have contributed to DSL increasing its share, from 78.0% to 78.6% of the UK broadband market with almost all the balance being provided by cable and only an estimated 0.2% using other technologies such as fixed wireless and satellite.
However during the year there was only a 10.6% growth in broadband overall, a sharp decline from the 19.9% in 2007. Much of the slowdown came in the second half of the year when market saturation combined with the advancing recession to cut the number of adds from almost 1 million in the first half to only 675,000 in the second.
“So by March 2009 the broadband scene in Britain was very different from a year earlier. On the one hand the market was seizing up. Structural change had ground to a halt; market growth had slowed sharply,” says Johnson. “On the other, having started late, the UK was making rapid advances towards rolling out next generation broadband and delivering superfast speeds to a high proportion of the country.”
Light at the end of the fibre?
BT’s proposed fibre to the cabinet (FTTC) roll-out, announced in July 2008, should reach 40% of homes and businesses in the UK by 2012. Combined with the expected Universal Service Obligation (USO) for broadband set to be announced by Lord Carter in the summer, the hoped for “Digital Dividend” and reorganistaion of the 900MHz spectrum it means that the UK is at last moving towards resolution on next generation access for broadband in the UK.
It’s Virgin Media though that will probably be the biggest provider of superband services in the UK for at least a few years to come. On December 15 it announced that it would be offering 50Mbps download speeds to 40% of its network by the end of 2008. By late summer of 2009 the 50Mbps service should be available to all the 12.6 million homes covered by Virgin Media’s digital fibre-optic network. In terms of raw speed it is well ahead of anything VM’s competition will be able to offer to the mass market for years to come.
“2009 will see slower growth in broadband numbers as the recession bites, but we expect the market to bounce back in 2010. Better mobile coverage and bandwidth upgrades should help mitigate some of the current difficulties and the long-term prospects for “Digital Britain” look good,” says Johnson.
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For more information please contact:
Point Topic: Oliver Johnson
Email: oliver {at} point-topic(.)com
Tel. +44 (0) 20 3301 3303
About Point Topic
http://www.point-topic.com
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