UK ISP, Cable and Dongle User Numbers - Jan 2009

Here is an update of the UK ISP market covering DSL and Cable Access market as well as the first inclusion of the Mobile Dongle market in the UK. I have used ITU published data for Broadband usage numbers and Neilson Ratings to get an accurate picture as well all the reports and disclosures for each of the companies shown below. I believe these figures represent a reasonably accurate representation of the genuine adoption of broadband either via DSL, Cable or mobile dongle. Broadband connections included in this data cover download speeds equal to or faster than 256kbit/s.

ISP     Total    % of   UK Accts. BT 4,600,000 25.87% Virgin Media 3,885,800 21.86% CPW (inc AOL) 2,700,000 15.19% Sky 1,955,000 11.00% Tiscali UK 1,774,000 9.98% Orange 1,023,000 5.75% Royal Mail 560,000 3.15% O2 (Be & Dongles) 287,090 1.61% 3 (Mobile Dongles) 215,000 1.21% Kingston      195,255 1.10% T-Mobile (Dongle) 132,000 0.74% Thus 126,000 0.71% Vodafone (Dongle) 116,000 0.65% Entanet 92,000 0.52% Clara.net UK 72,000 0.40% Breathe 12,000 0.07% Supanet 6,000 0.03% Others 28,000 0.16% Total    17,779,145   100.00%

Following on from C&W acquisition of Thus, Kingston still look very vulnerable and would make a good fit for C&W or for Sky as they continue to make their play to achieve 3 million broadband users.  The Tiscali saga seems to have no end in sight and given the current economic climate the allure to perspective buyers of plain utility broadband (PUB) is looking increasingly unattractive.

One exciting area of development has been the inclusion of the growing “Internet Dongle” market.  T-Mobile, 3 and Vodafone are all significant players in this growing market and I have decided it is worth including them in the list as their business takes share from the PUB operators.

BT is beginning to roll out its 21st Century Network (21CN) and they are seeking to work with a whole range of ISP partners to offer new services.  The investment in 21CN must deliver much slicker broadband to ensure BT maintains top slot as Virgin and notably O2 are making great play of the 20 Meg plus services.  The rise of 3G Mobile Dongle market is beginning to mop up the rest of the available UK broadband demand and the only way to retain users will be through increased speed and extended range of services many of them bundle into the basic price.

This begs the question, where will future revenues come from?  PPC rates are declining across the board and Google is eating everyone’s lunch.  CPA continues to prosper, but it is a long way from the major sources of new media advertising revenue.  Let’s hope that it isn’t to the likes of Phorm that BT come to rely on from value added income from user activity.

Will 2009 be the year of the Dongle?

With the global market for 3G dongles set to grow from 20 million units in 2008 to 26 million units in 2009, the dongle is set to become a standard accessory for the “mobility”.  Fuelled by subsidized access from the major mobile networks such as Vodafone and 3, the dongle is grabbing an increasing share of the internet access market.   Nokia was reported in December to be launching a new Nokia dongle which has been unofficially christened the “donkle”.

This is all very bad news for traditional fixed line ISPs and Cable operators who with one or two notable exceptions have failed to capture any significant numbers from the IPTV developments.  Now plain utility broadband (PUB) is about to be squeezed by the major mobile companies aggressively moving on to their turf.

With 3G Broadband dongle service costing as little as £10 a month and you get a free laptop offers, ISP’s PUB service is going to find it hard to compete.  As we have seen with the growth of the mobile telephony market, the market has seen the entry of all manner of players from telcos to supermarkets, all seeking to tie their users in with some very low offer just to retain customers for a broad range of services.  ISPs look like a threatened species and will need to evolve very quickly if they are to survive.

Whilst Europe is seeing double digit growth for the major mobile players, the US market which is traditionally slow to adopt mobile developments is just beginning to see the dongle develop a small market share.  The entry of Nokia and the proof of success in Europe will undoubtedly see the likes of Vodafone and T-Mobile seeking to capitalise on their European experience in the US.   This will undoubtedly drive some of the middle rank ISPs to the wall.  2009 will be a very interesting year.

UK ISP Numbers in October 2008

Here is an update of the UK ISP market covering DSL and Cable Access market in the UK. I have used ITU published data for Broadband usage numbers and Neilson Ratings to get an accurate picture as well all the reports and disclosures for each of the ISPs shown below. I believe these figures represent a reasonably accurate representation of the genuine adoption of broadband either via DSL or Cable. Broadband connections included in this data cover download speeds equal to or faster than 256kbit/s. Dial-up continues to collapse and very few of the ISPs offer any user numbers.

ISP Total % of UK Accts. BT 4,500,000 26.64% Virgin Media 3,836,000 22.71% CPW (inc AOL) 2,800,000 16.57% Tiscali UK 1,838,000 10.88% Sky 1,628,000 9.64% Orange 1,063,000 6.29% Royal Mail 500,000 2.96% Kingston 195,255 1.16% O2 (Be)    194,220 1.15% Thus 126,000 0.75% Entanet 92,000 0.54% Clara.net UK 72,000 0.43% Breathe 15,000 0.09% Supanet 6,000 0.04% Others 28,000 0.17% Total 16,893,475 100.00%

There continues to be consolidation of the UK market over the past year. As I predicted last year C&W have made a move on Thus.  This is likely to close in thenext few weeks.   One imagines that Kingston would make a good fit for C&W or Sky as they make their play to achieve 3 million broadband users.  The sale of Tiscali seems to have hit the buffers just at the moment.  As CPW has been excluded from bidding by Tiscali, the most likely buyer is either Sky or Vodafone.  Vodafone has made a number of major ISP acquisitions in Europe including various Tele2 assets and Arcor in Germany.  A move into the UK might be a long overdue play.  

One area that is frequently overlooked in the UK is the growth of the “Internet Dongle” market.  T-Mobile, 3 and Vodafone are all significant players in this growing market, but as yet numbers are hard to come by.  

Perhaps one the most interesting challenges will be for BT to maintain their top position over the coming year.  With the imminent roll out of the 21st Century Network (21CN), BT Retail is hoping to be able to launch a range of additional services to grow their user base.  However, if they persist with serves such as Phorm, they may well risk this pre-eminent position by encouraging the BT Wholesale business to syphon off business through their support of major VISP operators such as Royal Mail, who in the last year came from nowhere to grab almost 3% of the UK Broadband market.