UK ISP, Cable and Dongle User Numbers - April 2009

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) 4,700,000 26.05% Virgin Media (inc Virgin.net) 3,934,800 21.80% CPW (inc AOL) 2,700,000 14.96% Sky 1,955,000 10.83% Tiscali UK 1,768,000 9.80% Orange 1,000,000 5.54% Royal Mail 560,000 3.10% O2 (Be & Dongles) 340,866 1.89% 3 (Mobile Dongles) 255,000 1.42% Kingston 203,000 1.12% T-Mobile (Dongle) 161,000 0.89% Vodafone (Dongle) 132,000 0.73% Thus 126,000 0.66% 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 18,045,666 100.00%

 

The UK market exceeded 18 million broadband connections for the first time with all the growth being shown by the dongle market.  Both Tiscali and Orange again reported lower figures and still no news on the Tiscali sell-off.  The new battle ground for users appears to be shifting to the FTTH (fibre to the home) and FTTB (fibre to the building).  BT announced their high speed initiative targeting 29 areas with their 40 Mbps offering.  Virgin complained that many of the areas targeted were already served by their 50Mbps service.

An interesting development is the planned development of local authority run “ISPs” planned on the back of i3 Group Ltd (formerly H20Networks) in Dundee and Bournemouth who could be offering Ethernet interconnectivity to the home of a fully duplex 100Mbps 55,000 and 88,000 homes respectively. Whether these locally run ISPs ever emerge is an interesting thought since it will lead local councils into the tricky area of service provision and possible political control of services delivered or “surfed” for by their customers.

UK Mobile Dongle User Numbers – Feb/March 2009

I have been researching the number of users now using 3G mobile dongles to link to the Internet in order to offer some insight into this largely hidden phenomenon.

Globally the market for 3G dongles is set to grow from 20 million units in 2008 to 26 million units in 2009 despite the downturn.

In Europe, some of the strongest growth has been recorded mainly due to the near saturation level of mobile usage compared to other parts of the world due to aggressive marketing push from the operators and the handset manufacturers.  This has resulted in an interesting development amongst Generation Y, those users born between 1978-2000.  This group have led the way in not bothering with fixed access telephony and are consequently adopting the 3G Dongle as their preferred method of Internet access.  Much of this growth is based on competitive all-you-can-eat tariffs and ease of use.

In the UK, which makes up approximately 3.5% of worldwide dongle sales, the mobile dongle user community now makes up over 4% of the overall broadband market.  These figures may not seem very impressive; however, with overall dongle sales set in 2009 to see 15% growth over 2008 and with the traditional broadband market at a standstill, the dongle market is likely to continue to make significant in-roads into the broadband market in 2009.  With increasing choice of low cost tariffs and user numbers in the UK could easily top one million by the end of 2009.

UK Market – February 2009

No	Operator	Number of Users	% Share	Comment
1	3	255,000	34%	The established leader of the dongle market, 3 has led the pack with its innovative pricing packages.
2	T-Mobile	161,000	22%	T-Mobile has used the UK as its primary test market for their dongle strategy and their innovative “webNwalk” service.
3	Vodafone	132,000	18%	Vodafone is the fastest growing of the major networks aggressively promoting and subsidising dongles because they are viewed as a secondary device that provides additional revenues for carriers beyond a traditional handset.
4	O2 (Dongles only)	122,000	16%	02 were the first major mobile network to enter the broadband market in the UK following its acquisition of Be, however, this seems to have been a distraction which has slowed their adoption of a dongle strategy.
5	Orange	57,000	7.7%	Orange seem to stumble from drama to crisis.  Their 3G Dongle strategy is little better.  They are seeing declining share of the broadband market and have been slow to put together a competitive offering for the dongle market.
6	Virgin Mobile	15,000	2%	Somewhat off the pace with their 3G dongle priced at £15 per month running over T-Mobiles network as MVNO.
	Total	742,000

To get an accurate picture, a number of published and unpublished sources have been used.  One needs to guard against the marketing hype that is put about regarding sales of individual networks, but the 3G dongle market is viewed as an area of vital importance by the mobile networks.  It will be interesting to see how the traditional ISPs respond.  Late in 2008, BT Broadband started to offer a WiFi dongle that connected to their network hotspots, BT Openzone, to their customers as an extension of their standard contract.  Neither  Sky or Tiscali have a competitive offering as yet, although Tiscali could still make a good fit for Vodafone.

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.