BT takes aim at Virgin’s territory.

BT revealed the list of exchanges that will get the 40Mbs fibre technology upgrade today. Twenty seven of the 29 sites are urban areas, with BT trying out just two rollouts in rural areas to "learn lessons from deploying fibre in such environments".

However, Virgin Media claims every one of the 29 sites selected for BT's initial fibre rollout is already covered by its high-speed cable network - meaning BT's initial rollout may do nothing to improve Britain's overall broadband speeds.

A Virgin spokesperson stated , "We already have 50 meg in four areas - Belfast, Watford, Halifax and Oldham”.  Furthermore it would appear that all the other BT designated areas are in Virgin cable areas which are due to be upgraded to the 50Mbs network over the coming year.

While BT's fibre will provide some much needed competition for Virgin, the overlap means Britain as a whole may not see any speed increase as a result of the initial BT rollout, which will cover 500,000 premises by 2010.  The decision to focus almost exclusively on urban areas will increase the “broadband apartheid” between urban and rural areas.  This disparity in service provision is becoming an increasing issue for rural communities, which are suffering disproportionately in the recession.  Access to broadband is being positioned as a right of all not just those who live in our cities.

Ofcom needs to ensure that every UK citizen has equal access to the new fast broadband services and that BT doesn't just use it's power to compete with Virgin at the expense of the whole UK community.

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.

ISP & Cable Numbers for the United States - February 2009

Here are the updated numbers for the US ISP market and trying to get accurate figures for Internet access for DSL, Cable Access and Dial-up. I worked with OECD published data for Broadband adoption and I have gone through 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.

Table 1 US ISP & Cable Operators
Name	ADSL	Cable	Dial	Total
AOL	2,400,000		5,100,000	7,500,000
United Online	1,500,000			1,500,000
Road Runner		8,600,000		8,600,000
Earthlink	575,000		1,725,000	2,300,000
Embarq	1,400,000			1,400,000
Cox		3,650,000		3,650,000
Comcast		14,700,000		14,700,000
Charter	2,900,000			2,900,000
Cablevision		2,400,000		2,400,000
Suddenlink Comm		1,400,000		1,400,000
Bright House Networks		2,200,000		2,200,000
AT&T World net/BellSouth/SBC	10,200,000	4,000,000	600,000	14,800,000
Insight Communications		420,000		420,000
Verizon	8,500,000			8,500,000
Qwest	2,800,000			2,800,000
Media com		730,000		730,000
Cincinnati Bell	230,000			230,000
Local Net		260,000		260,000
Wind stream		400,000		400,000
Others		1,200,000	30,000,000	30,000,000
Totals	30,505,000	32,230,000	37,425,000	100,000,000
	Broadband Total	62,725,000

The reported numbers for AOL look a little suspect, but I feel the overall picture for DSL and Cable Access for each of the ISP or Cable Companies detailed in the Table is reasonable at this point in time.
The figure of 62,725,000 Broadband access either via DSL or Cable indicates approximately 0.7% growth over the figures published in October 2007 , which indicates that growth has largely stalled and the only way to grow will be through acquisition. 2009 will be a very tough year for ISPs and Cable companies as numbers users stagnate and it becomes increasingly challenging to hang on to users in a very competitive market. I am sure we will see the sort of offers last seen with the intense Fixed line Phone competition of the the mid 90s when it seemed to be possible to switch from deal to deal without paying anything for service relying on the free intro offers. We shall see! Without doubt some of the companies listed will not be in next years listing in any case. Several are heavily relient upon on-line ad spend and average PPC levels are falling across the board as companies re-evaluate their media spend in recessionery times. 2009/2010 is likely to be a as bad a period for ISPs since 2002.

Some notable changes in numbers with respect to Insight Communications which saw its subscriber numbers drop sharply as it dissolved a partnership with Comcast. One other major change has been the SBC/ATT numbers, which have changed massively mainly in dial-up.

Once again I have used public sources such as those published by ISP Planet and OECD published data as well as correlation with website information from individual ISP/Cable Companies.

One area that I have not been able to evaluate is the mobile dongle market in the US which is taking huge market share in the UK and across Europe. The growth in this area could account for the apparent sluggish growth in the main market. I will report back on this shortly.

US ISP and Cable Subscriber Numbers

I have recently been evaluating the US ISP market and trying to get accurate figures for Internet access for DSL, Cable Access and Dial-up. I worked with OECD published data for Broadband adoption and I have gone through 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.

Table 1 US ISP & Cable Operators
Name	ADSL	Cable	Dial	Total
AOL			5,100,000	5,100,000
United Online	2,300,000			2,300,000
Road Runner		6,900,000		6,900,000
Earthlink	575,000		1,725,000	2,300,000
Embarq	1,100,000			1,100,000
Cox		3,500,000		3,500,000
Comcast		11,500,000		11,500,000
Charter	2,400,000			2,400,000
Cablevision		2,000,000		2,000,000
Suddenlink Comm		1,400,000		1,400,000
Bright House Networks		2,200,000		2,200,000
AT&T World net/BellSouth/SBC	10,500,000	6,500,000	3,000,000	20,000,000
Insight Communications		600,000		600,000
Verizon	7,000,000			7,000,000
Qwest	2,100,000			2,100,000
Media com		580,000		580,000
Cincinnati Bell	400,000			400,000
Local Net		260,000		260,000
Wind stream		400,000		400,000
Others			30,000,000	30,000,000
Totals	26,375,000	35,840,000	39,825,000	102,040,000
	Broadband Total	62,215,000

I believe that this table has the most accurate figures as regards DSL and Cable Access for each of the ISP or Cable Companies detailed in the Table at this point in time. I have not been able to ascertain any accurate data as regards dial-up access which remains surprisingly strong in the US. However, should anyone have any additional data or up to date, please let me know. I will add additional data for the UK and Europe as I can locate them out from published and unpublished sources.

The figure of 62,215,000 Broadband access either via DSL or Cable indicates around 8.7% growth over the figures published by the OECD in December 2006 which seems to be a reasonable assumption. I have included other forms of access either via Satellite or FTTH (Fibre-to-the-home) or FTTB (Fibre-to-the-building). I expect FTTH and FTTB to have grown significantly during 2007, but I haven't any specific data as such.