UK ISP, Mobile Internet and Cable Subscriber Numbers - December 2013

Here is an update of the UK ISP market covering DSL and Cable Access market as well as the Mobile Dongle market in the UK.  I have also added in the published figures for 3G and 4G mobile access devices. I have used ITU published data for Broadband usage numbers and Neilson Ratings and ISP published figures 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.

Table 1. Broadband ISPs (Source: ITU, Neilsen, OFCOM & ISP Published Figures)

No.	ISP/Provider	User Numbers	% of UK Market (inc Mobile)
1	BT Retail	6,961,000	26.07%
2	Sky Broadband	5,017,000	18.79%
3	Virgin Media	4,488,600	16.81%
4	TalkTalk Group	4,076,000	15.27%
5	Orange	714,000	2.67%
6	Kingston Comms	178,200	0.67%
7	Zen Internet	94,000	0.32%
8	Vodafone UK	85,000	0.31%
9	Thus Group	80,000	0.30%
10	Entanet	70,000	0.26%

BT continues to grow its user base at the expense of the smaller players.  Sky Broadband has continued to grow, primarily by acquisition having taken over O2’s broadband user base.  However, although BT Sport is still in its early days, it is clearly impacting Sky’s organic growth.

The total UK Internet connectivity market is not only made up of Broadband ISPs, but connection is now frequently through 3G and a growing 4G user base. Consequently I have taken the total market as being made up of both the fixed-line broadband and mobile internet access as I think it would be erroneous to suggest that they are not part of the same competitive market. The Broadband ISP market size is estimated to be just under 22 million broadband connections. OFCOM estimates the mobile internet connectivity to be in the region of 5.0 million mobile broadband users in addition the 21.7 million fixed line users.  So the total market is estimated at 26.7million subscribers.  Of these super broadband users make up just 3.7million.

4G licences only raise £2.34 billion in auction

It beggars belief that the UK Government has only managed to raise just £2.34 bn in licence fees for the the 4G licences.  It really does suggest that both the UK Government and Ofcom are totally disconnected either from the potential of the mobile internet market or they are totally incompetent at running an auction.  Whilst it was clear from the start that the market would not pay the astronomical figures paid for the original 3G licences of £21 billion raised by Gordon Brown,  the value of these licences should have achieved far beyond the Office of Budget Responsibilities own projection of £3.5bn, let alone the £2,34bn delivered.  Everything Everywhere, Hutchison 3G UK, Telefonica (O2), Vodafone (VOD) and BT (BT.A)'s Niche Spectrum Ventures secured the 4G licences.  It is a little disappointing that the winning bids all came from the usual suspects and that we will not see any new entrant to spice up the cosy market carve up between the major mobile networks and BT.


Given that the UK is one the largest mobile internet markets and combined with the superior quality of coverage and speed of performance offered by 4G’s 800 MHz network, the winning network providers and service providers stand to make significant revenue.  The mobile broadband should provide smartphone and tablet computer users with "superfast" download speeds, and will provide £20 billion of benefits for UK consumers over the next ten years, Ofcom said. 

However, when mobile operator EE, a joint venture between T-Mobile and Orange, became the first to launch a 4G service in October 2012 in a brief monopoly, it struggled to attract users. It was forced to cut its prices in January, lowering its entry price to £31 from £36 a month.

Despite this slow take up, I still believe that 4G has the power to become the de facto communications network for Internet access in the UK - a view clearly shared by BT - which is why they entered the auction to secure 4G capacity which they are using to extend their WiFi network.  4G has the capacity to be a game changer in technology terms and could change the local access in remote locations of 100 MHz Ethernet speed access reducing the need to take fibre to the home.

There may not be champagne corks popping in No 11 tonight, but I am sure they will be in the HQs of our major mobile providers.

Will the 4G Auction exceed £3.5bn? You bet!

Although Chancellor George Osborne is unlikely to raise anywhere near to Gordon Brown’s £21bn for 3G licences, I believe he may do rather better than is being reported.  Recent auctions in Europe have raised £3bn which suggests that the UK 4G licences will achieve £3.5bn.  However, it is suggested that Private equity firms, retail groups and banks as well as international telecom players have entered the fray alongside the UK’s Big Four mobile operators, EE, Vodafone, O2 and Three to win a slice of these 4G licences.

Ed Richards, chief executive of Ofcom, the telecoms watchdog, said that it had “fired the starting gun” on an auction process that would “release crucial capacity to support future growth, helping to boost UK productivity”.  Even in these recessionary times, the total U.K. Internet traffic is currently projected to increase by an average of 37 per cent each year until 2015. Although the majority of traffic remains on fixed networks, traffic on mobile networks is growing at a faster rate of 84% year-over-year and is expected to account for 11% of total traffic by 2015. 

Mobile access to the Internet accounts for even more time spent browsing, communicating, and transacting than this traffic data suggests, with fixed lines being used to consume bandwidth-intensive services such as video and mobile used more for social media. Indeed, the Internet is increasingly being accessed on mobile devices, whether through mobile connections or Wi-Fi networks, and the next generation of mobile communications of 4G will continue to shift this dynamic and economists have suggested could add as much as 0.5% to GDP in infrastructure investment alone not to mention the enhanced capability of the mobile web usage.

The superior quality of coverage and speed of performance offered by 4G’s 800MHz network offers significant improvement over the current 3G licences.  This superior system will add significantly to the opportunity for both network providers and service providers to make significant revenue.  The UK is one the largest mobile internet markets and consequently the opportunity  to own a slice of this market will in my opinion drive the value of these licences far beyond the projected £3.5bn and along with the additional impact 4G will have on the UK economy, the auction could bring a welcome additional windfall for Mr Osborne.

UK ISP, Cable, Dongle and 3G and 4G User numbers November 2012

Here is an update of the UK ISP market covering DSL and Cable Access market as well as the Mobile Dongle market in the UK.  I have also added in the published figures for 3G and 4G mobile access devices. I have used ITU published data for Broadband usage numbers and Neilson Ratings and ISP published figures 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.

Table 1. Broadband ISPs (Source: ITU, Neilsen, OFCOM & ISP Published Figures)


No.	ISP/Provider	User Numbers	% of UK Market
1	BT Retail	6,444,600	30.43%
2	Virgin Media	4,413,400	20.84%
3	Sky Broadband	4,103,000	19.47%
4	TalkTalk Group	4,043,000	19.09%
5	Orange	723,000	3.41%
6	O2	579,000	2.73%
7	Kingston Comms	178,200	0.84%
8	Zen Internet	94,000	0.44%
9	Entanet	92,000	0.43%
10	Thus Group	87,000	0.41%


The major change over the past year has been been the continued growth of Sky Broadband which has seen it rise above TalkTalk.  Undoubtedly the combination of the Sky bundled offerings with its satellite TV content has driven this growth.  Recent launch of Talk Talk's TV set-top box plus the major BT play into football are both aiming at trying to redress this strategy.  Clearly Orange and O2 are seeking to enhance their position in the UK market through growth in the connected Tablet market which is experiencing phenomenal growth as eluded to below. 

The total UK Internet connectivity market is not only made up of Broadband ISPs, but connection is now frequently through 3G and most recently 4G mobile network connections.  The Broadband ISP market size is estimated to be just over 21 million broadband connections. The figures for mobile connectivity is much harder to obtain, however, given that there are now many millions of Internet enable phones in use today. However, OFCOM indicate in their latest facts on the market that there are 5.1 million mobile broadband users in addition the 21 million fixed line users.

Why Stephen Hester should visit O2

Recently two of the UK’s largest companies, the bank RBS and the telecoms company O2, suffered serious technical problems that had a critical impact on millions of their customers.  In June, during a ‘routine’ software upgrade RBS managed to corrupt their entire High Street banking operation of RBS and NatWest which left millions of customers unable to access and operate their accounts.  Mortgages went unpaid, deposits were not credited and customers were unable to access their via ATM machines.  The outage caused huge disruption and lasted more than a week and effected both retail and business customers.

In a similar computer upset, O2 had a network failure of their 2G network. The outage lasted two days before it was resolved.

What is interesting is the difference in the response to customers that each company adopted.  RBS took several days to make the problem public and communicate their concerns via the media.  The severity of the problems was never fully exposed and when RBS Boss, Stephen Hester, was interviewed, he seemed unable to explain what had gone wrong nor whether they would compensate customers.  They only made a vague promise that no one would be out of pocket.  As a business customer of RBS I have not received any apology from either the staff in my local branch or from my ‘Account Manager’.  Not even a phone call to check I was having any problems even though payments for thousands of pounds into and out of my business account had ‘failed’.  I was left to apologise to suppliers to avoid having my credit rating damaged.

Contrast this with O2, with whom I am also a customer.  Despite the fact that  as a 3G network user I didn’t appear to have any problems, O2 immediately contacted me and apologised for the outage and as soon as the problem was resolved provided me an email detailing compensation in the form of a 10% reduction in my monthly contract and a voucher to use in their O2 shops.  This was a genuine no quibble guarantee.

What a difference it makes when a company is genuinely customer focused.  I have always found that O2 has a world class customer service operation and their reaction to their recent problems was case study in how to deal with a major business problem.  RBS on the other hand only seems to be focused on their bonuses and not the customer.  It is now a month on from their problems and they have still not contacted me other than sending out their usual bank charges without any reduction for the outage period.  Bankers still do not seem to get it.  Customers are the people they should be concerned about losing, not their highly paid investment bankers.  Stephen Hester should be beating a path to O2’s customer service department and find out how to build a customer focused business operation rather than continuing to defend their bonus policy.

UK ISP, Cable and Dongle Users January 2011

Here is an update of the UK ISP market covering DSL and Cable Access market as well as the Mobile Dongle market in the UK. I have used ITU published data for Broadband usage numbers and Neilson Ratings and ISP published figures 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 (inc Plusnet)		5,341,000	27.00%
Talk Talk		4,249,000	21.50%
Virgin Media		4,242,000	21.49%
Sky		3,006,000	15.20%
Orange		795,000	4.00%
O2 (Be Broadband)		663,800	3.40%
Royal Mail		600,000	3.00%
3 (Mobile Dongles)		255,000	1.30%
T-Mobile (Dongle)		195,000	0.90%
Vodafone (Dongle)		190,000	0.80%
Kingston		178,200	0.70%
Thus		93,000	0.50%

The UK Broadband market has become very concentrated with almost 20 million broadband accounts with over 98% concentrated in the top twelve providers with a high degree of consolidation among the top 5 players. The standard speed offering has increased from around 2Mb to 8Mb over the past two years, however many of the grand claims of the leading providers offering 20Mb broadband access is far of the mark with most only achieving 7-8 Mb on average.
The super fast 40Mb and 50Mb deals are beginning to enter the market but mainly only appeal to specialist hard care users in the consumer market.

Whilst the growth of mobile dongles has slowed the market continues to evolve. There are a number of players offering a range of speeds and costs. The market for the iPad and Kindle 3G devices is growing very quickly through sim only offerings. The new tablet applications such as the iPad and Samsung Galaxy and the soon to be launched Motorola Zoom represent the most exciting sector of the market and the mobile networks are likely to be climbing over each other to offer the 3G broadband connectivity. A quick look at the offerings below reveal the developments in the dongle market which will form the basis of any 3G Sim deals for the new tablets.

Who offers mobile broadband via mobile broadband dongles?

• Vodafone offers a range of mobile broadband dongles, the most popular being its small and speedy "USB Modem stick" starting at £15 a month. With speeds of up to 7.2Mb and download allowance of 3Gb, this offer is a real no-brainer.
• 3's mobile USB modem dongle comes free on many of the 3 packages. Offering 1Gb downloads and speeds of up to 7.2Mb, 3’s £10 per month offer is great value for money.
• T Mobile's USB dongles offer speeds of up to 7.2Mb and download allowances of 3Gb - 9/10 T Mobile customers say it "works like a dream".
• Orange's dongle is the sleekest and fastest they've ever made, offering speeds of up to 7.2Mb.
• Virgin Media was late to the mobile broadband market, but it is making some very attractive offers speeds of up 7.2Mb at excellent price points.
• O2 dongles get you online at speeds of up to 3.6Mb and start from just £10 per month.

Google Android paid for apps opens in the UK

Paid for applications will be available to UK Android owners from today, T-Mobile has announced.

For the first time, Android developers will be able to set their own prices for their apps. Previously, only free apps could be made available through the Android Market app store.

Speaking at an Android developer event, Regan Whitehead, mobile internet category manager at T-Mobile UK, said: "When users click on the Android Marketplace icon in the morning there will be a wide selection of paid apps on the market," including offerings from EA Sports and Activision.

Content on the Android Market is rated by users - in a similar fashion to YouTube - so developers who slap a high price tag on their app risk pricing it out of the market, according to Richard Warmsley, head of entertainment and internet at T-Mobile UK.

The store is like "eBay - developers are posting up their apps, they're setting the price, customers are rating independently and choosing what they want to have so it's an open market approach," he said.

The widespread interest in the potential of application marketplaces is hardly surprising, since  Apple revealed last year that it earned $30m in sales of iPhone apps in the first month after launching the App Store.

According to Maani Safa, head of mobile at The Telegraph Media Group, the newspaper's app - which was initially launched on Android - took about four times as long to port it over to the iPhone.

"Apple just make you jump through hoops," he claimed.

Because of these hoops, Safa said the company is "using Android as a trailblazer" - any app it creates will be launched first on Android and then ported over to other platforms because of the difficulties he had working with Apple

"Say you have a commercial deal in place and you want an application to go live on day X with an Android version. You create the application, you click on publish and literally within 10 seconds it's live in the application store, you call up the commercial partner and you tell them it's live ready to go. With the Apple version, you tell them it's date X - it gets to four days before, [Apple] gives you a call and says 'oh, by the way it's not going to go live for another two weeks'. 'Why?' 'It just isn't'."

There are currently more than 1,000 free apps available for Android.

T-Mobile's Warmsley said the top 10 apps downloaded on the G1 since its October 2008 launch are The Weather Channel, MySpace Mobile, ShopSavvy, Daily Horoscope, Free Dictionary Org, Ringdroid, Backgrounds, Barcode Scanner and Save MMS.

Currently, the G1 is only one model of Android phone is available in the UK and is exclusive to T-Mobile. Vodafone has just announced last month that they will begin shipping the HTC Magic Android compatible phone shortly. The phone will be available in the UK, Spain, France, and Germany.  

As regards the G1, T-Mobile's Warmsley said he was unable to put a figure on the number sold in the UK to date, but said that while "it's not a million", in a typical week T-Mobile's current sales rate of the G1 is 70 per cent of the iPhone's sales rate. O2 claims to have shipped more than a million iPhones in the UK.

The typical G1 user is a 32-year-old male, likely to be living in London or the South East - although there are also G1 'hotspots' in Leicester and Nottingham, according to Warmsley.

Additional Reporting from Silicon.com

UK ISP, Cable and Dongle User Numbers - March 2009

Here is an update of the UK ISP market covering DSL and Cable Access market as well as the 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 (inc Plusnet) 4,700,000 26.20% Virgin Media (inc Virgin.net) 3,934,800 21.93% CPW (inc AOL) 2,700,000 15.05% Sky 1,955,000 10.90% Tiscali UK 1,774,000 9.89% Orange 1,023,000 5.70% Royal Mail 560,000 3.12% O2 (Be & Dongles) 340,866 1.61% 3 (Mobile Dongles) 255,000 1.42% Kingston 195,255 1.09% T-Mobile (Dongle) 161,000 0.90% Vodafone (Dongle) 132,000 0.74% Thus 126,000 0.70% Entanet 92,000 0.51% Clara.net UK 72,000 0.40% Breathe 12,000 0.07% Supanet 6,000 0.03% Others 28,000 0.16% Total 17,940,121 100.00%

Unlike some of the largest UK ISPs, which have seen a decline or slowdown in high-speed services uptake, O2 has actually reported yet another growth increase from Q3-2008's +72,870 net additions to +73,776 for Q4. They're still some way behind 6th place Royal Mail but gaining fast.
Overall O2 outperformed the UK market in difficult economic times with over 10% growth and O2 is also working to increase broadband capacity at several locations around the UK. O2 has benefitted from the development of the growing “Internet Dongle” market. T-Mobile, 3 and Vodafone are also enjoying continued growth. BT is responding to the mobile challenge through BT Openzone (Wi-Fi Hotspots). BT has reported an increase in usage of 13% on Q3, with nearly double the amount of surfing minutes being used. BT Openzone is now available at more than 50,000 worldwide locations through roaming partners. BT FON membership also continued to climb and members now total 163,000.

As BT starts to roll out its 21st Century Network (21CN), they are seeking to work with a whole range of ISP partners such as Royal Mail to offer new services. BT Group has reported 8.1m wholesale broadband DSL connections at 31 December 2008. BT Broadband net additions of 83,000 in the quarter in the maturing broadband market, with a customer base of 4.7m including both BT Broadband and Plusnet.