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.

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.

BT must be desperate to turn to Phorm

BT all but confirmed that they are going to implement the Phorm service across their 4 million users. Phorm has developed a service to deliver targeted advertising based on user browsing habits by using deep packet inspection (see comment).  Phorm claims that the targeting system is entirely anonymous and the Information Commissioner seems to agree although he has advised BT that users should only "opt-in".

However, there is some doubt on the part of industry experts that the sort of targeting planned by Phorm can ever be anonymous.  So why is BT involved in this dodgy area of activity?  Both Talk Talk and Virgin walked away from trialling Phorm when the level of resistance became clear on the part of users and industry commentators and pressure groups.  Well the answer maybe in BT's recently released financial numbers and the income that Phorm is suggesting BT can make from implementing the service despite the "opt-in".  However, Iain Livingston will face the prospect of BT yielding the ISP number one spot in the UK if they sacrifice the delivery of a quality service for some dodgy incremental income.  There are many more ways of making incremental income without upsetting your user base.  Sadly BT is increasingly run by accountants who neither understand the technology or customers' needs it would seem. (Isn't that similar to what happened to our Banks!)

BT should be very careful or their financial worries could multiply with the addition of Phorm.  This is just targeted spam and we do not want it.  BT should heed that old saying - "All that glisters isn't gold!"

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.

Google to allow bidding on Brands in UK

Google announced today that, as of May 5 2008, it will allow open keyword bidding on all terms in the UK and Ireland, bringing these territories in line with the US and Canada.

Simply put, this means that the search giant has abolished its previous system in which a registered trademark could not be bid on by competitors.

Open keyword bidding was rolled out across the US and Canada in 2004 and means that competitors can now bid on a registered trademark, although they will not be able to use trademarked terms in their anchor text or text snippets.

For many, this is unlikely to be welcome news, although some major price comparison sites could see advantages. Until now, clients in the UK and Ireland have benefited from a large amount of relatively cheap traffic from searches on their brand name. The new move is likely to mean trademark holders and competitors will need to significantly increase their bids for the top spots on crucial brand keywords.

The roll out looks on the face of it a very clear revenue boosting idea by Google and no apparent benefit to the leading brands, users or ISPs with all the revenue flowing to Google. The biggest impact is likely to be in developing keyword navigation from the browser address bar which has traditionally been a source of significant revenue for both MSN via Internet Explore and Google via both Internet Explorer and more explicitly via Firefox.

This technique of Direct Navigation was first pioneered by RealNames between 1999 and 2002 before they closed at the behest of MSN. Simply typing a keyword such as “Amazon” into the browser address bar would take you directly to the Amazon site applicable to the territory setting in your browser. After the demise of RealNames, MSN has taken this traffic to MSN search and benefitted from the sponsored listings in a relative benign way although generating millions of dollars in PPC revenue. Google were quick to spot the opportunity and have similarly “hijacked” this traffic from the address bar to their search results. They took this a further step forward when they signed an exclusive deal with Firefox to send all keyword traffic to either search results or on “exact match” to the site in question. Now they are introducing bidding on these terms where will the “exact match” branded keyword go now.

You may feel that this is an excellent use of the web and Google are performing a fair service. However, the browser address bar is not owned by Google or MSN and any interference of outgoing traffic is the same as ease dropping on a phone call being dialled and redirecting the requested call to an alternative location of their choosing. Typing a keyword into a browser address bar is a “DNS error”. Under law you can only redirect it after a NXD or Non-existent domain error has been generated by the Authoritative Name Servers (ANS). So why has MSN and Google got away with this abuse? Well MSN won the right to be able to do this activity in the US and indeed all such search requests are indeed redirected to their servers in Redmond cost the ISPs significant transit costs. Google on the other hand have no such “get out of jail free card”, but have continued to redirect keyword traffic straight from the browser bar. This is not a cost free service since the ISPs naturally end up picking up the transit costs. Now Google wants a larger slice of the cake by forcing Brand names to bid up their own trademarks.

Two bodies who could deal with this issue, ICANN and the ITU, seem strangely silent on this activity and seem content to let Google and MSN to make unreasonable profits paid for by the ISPs.

UK ISP Numbers

As with the US ISP market previously, I have just finished an analysis of the DSL and Cable Access market in the UK. I worked with the 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 is collapsing very fast and very few of the ISPs offer any user numbers.

ISP		Total	% of UK Accts
BT		4,074,000	27.56%
Virgin Media		3,590,000	24.28%
CPW (inc AOL)		2,500,000	16.91%
Tiscali UK		2,000,000	13.53%
Orange		1,142,000	7.72%
Sky		1,000,000	6.76%
Kingston		140,851	0.95%
Thus		132,000	0.89%
Entanet		80,000	0.54%
Clara.net UK		72,000	0.49%
Breathe		20,000	0.14%
Supanet		8,000	0.05%
Others		26,000	0.18%
Total		14,784,851	100%

There has been considerable consolidation of the UK market over the past year. Most recently we have seen the acquisition by Tiscali of Homechoice and Pipex's user base, Sky's acquisition of Easynet and CPW acquiring the AOL userbase. With the entry last month of O2 into the fixed Broadband market with a very competitive offering and Vodafone flexing its muscles acquiring Tele 2's operations in Spain and Italy, the race to mop up the remaining minnows is likely to continue into 2008. In particular the continued independence of Thus and Kingston in this market must be considered to be in question. Maybe C&W with their improved fiscal results would see the Telecoms operations of Thus and Kingston a good fit, allowing for the broadband base to be sold to the aggressive Sky! Certainly 2008 is likely to be as exciting as the last 18 months and we may see the top six consolidate further with Sky possibly making a play for Tiscali and achieve their stated aim of 3 million users by the end of 2008.

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.

Interactive, Networked and err….404 File not found!

It was reported recently that Britain had overtaken France as the largest user of broadband lines in Europe, according to the internet consultancy Point Topic. Today it is estimated that the UK has 9.8m broadband lines, France has 9.7m and Germany is in third place. During the same period we have seen massive growth in the online advertising market with the UK accounted for the largest share of European online ad-spend, at 39% of the total (€3.101 billion).

Typically broadband is 40 times faster than ordinary dial-up and the speed of broadband tends to be addictive, so it is doubly frustrating when you come to a screeching halt due to a browsing error. If you're running any of the popular internet browsers such as Microsoft’s Internet Explorer or Mozilla’s Firefox, you are most likely to get "The page cannot be displayed" followed by largely worthless advice that's incomprehensible to the average surfer, which concludes with "Cannot find server or DNS Error." or reference to some numbered code such “error 404” . Network Solutions Inc (NSI), the domain name registry for .com, .net and .org estimate that up to 15% of all network traffic is this sort of error traffic. Also a recent study by Google recently indicated that 404 HTTP errors alone account for 6.96% of published pages on average of the 11.5 billion web pages currently published on the web or some 800 million error pages! These huge volumes of errors and the demand for more advertising inventory has stimulated significant interest in monetising this massive untapped market characterised by one senior Ad Executive as “the last white space”.

In the past the main beneficiary of much of this traffic has been Microsoft and their MSN Search Engine. The error codes are identified by the Internet Explorer browser and the user is delivered to an MSN Search result. Consequently this error traffic has managed to boost MSN Search into second place behind Google in the Global Search Engine stakes.

Search Engines have long been aware of the value of this traffic and it will come as little surprise that the behemoth Google has had a product called “AdSense for Errors”. Google extracted contextually related keywords and advertisements from the DNS error pages by using Google's semantic technology to "understand" the meaning of each error. It tended to focus on a class of error known as an NXD or Non eXistent Domain, the error generated when a mis-spelt or unregistered domain name is typed into the browser address bar. This has evolved into Adsense for Domains focusing on the domain name business. However, Google hasn’t left the error space entirely to Microsoft, in recent years it has rolled out the Google Toolbar to “hi-jack” error traffic such as search from the browser address bar directly to Google search results in the guise of did you mean. In case you thought couldn’t possibly be any money in errors, Google has reportedly paid Mozilla millions of dollars to ensure that address bar search defaults to Google results rather than go to a DNS error page!

Verisign, the owner of NSI, got into a spat with ICANN (www.ICANN.org), the Internet’s Governing body, when it started responding to these NXD mis-spellings with a so-called “wild card response”, offering users the opportunity to buy the mis-spelt domain. Unfortunately, the service known as “SiteFinder” was poorly configured and resulted in opening many ISP and Enterprise email servers to spam attacks.

Now a British company called Barefruit (www.barefruit.co.uk) has emerged to become the Global leader in this developing error space. Barefruit resolves all the most commonly occurring errors, handling 98% of the error traffic including NXDomains, 400 Website errors including the aforementioned 404 File not found error and 500 Server errors. The company has successfully patented a technique of caching the user’s desired link and if an error occurs, analysing both the domain name information and any associated description and directing the user to either an exact match for a mis-typed brand or trade mark or providing a contextual search result to allow the user to make an informed choice. Through relationships with a broad range of databases and search partners, Barefruit delivers both organic and sponsored listings and claims to offer a near 100% relevancy of the user’s desired destination.

The Barefruit solution is available in a variety of formats which are simple to install either at the user level, via a plug-in, or in partnership with an Internet Service Provider (ISP) through modified DNS software or through the installation of a proxy server. The service also works with every browser type. The benefit of the Barefruit service is not only limited to the resolution of the error, but also provides the user the ability to navigate the Internet by the use of Keywords enabling every ISP with a “direct navigation” capability similar to AOL Keywords or Google’s “Browse by Name”.

With Barefruit, there is also a financial benefit to the ISP as they share the revenue generated by their users clicking on sponsored links. So what had been considered to be rubbish in the past and an annoyance in Internet navigation may now be turned to the benefit of users and ISPs alike. This has led to an increasing number of Tier 1 ISPs, in the UK, Europe and in the US market to adopt Barefruit’s solution. to enhance the Internet surfing experience of millions of users, monetise hitherto error traffic. This new source of traffic is also keenly wanted by advertisers since with Barefruit’s ability to extract the desired requirements of the user is helping brands to grow traffic and continue to build advertising revenues for online advertised through the delivery of qualified traffic.

2007 has seen massive growth in the development of the error correction market and it is set to become the most significant area of development of the so-called Web 2.0. A number of new players have tried to enter the market to monetise this traffic, but only Barefruit has such a broad range of patented error solutions. Barefruit’s growing reputation for extracting relevance and literally “bearing fruit” in millions of pounds of additional revenue to ISPs and online advertisers alike whilst improving the Internet users surfing experience.