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.

Fibre Taxation slowing the UK's broadband future.

The Government is in danger of creating a digital divide by discouraging investment in superfast connectivity unless it reviews the issue of fibre taxation. Despite Government backing next generation Internet applications and the use of fibre optic cable, it has continued to tax the rateable value of the basic infrastructure.

Elfed Thomas, CEO and founder of i3 Group, is calling on the Government to review the issue of fibre taxation ahead of the Digital Britain report expected later this month. He fears the imposition of the tax will create a digital divide between those companies able to afford the rate, and so benefit from superfast connectivity and those unable to offset the tax and thereby relying on the traditional copper networks.

He said: "Now is not the time for the Government to impose this tax. Fibre taxation is an issue which has been around for almost a decade but never before has it been such a potentially hot topic. Its resurgence comes as the Government is expected to back recommendations for the national deployment of dark fibre - to meet the requirement for universal Internet access to at least 2Mbps broadband speeds by 2012 in the Digital Britain report.

Given the Governments expressed commitment to ensure that the entire population has access to a less than ambitious 2Mbs, this is tax is clearly out of step with this aim.  It seems that the Treasury is still unaware of what is meant by “joined-up Government”.  With one branch of Government committed to improving Internet access for all whilst the Treasury tie the hands of industry behind its back by demanding an income from the means to deliver it!

Japan, Singapore, China, Sweden, Denmark and even Italy are rather more enlightened than the UK Government’s piece meal approach.  As I wrote last November in “When will the next generation broadband start to deliver for the UK”, our Government’s current approach and that of BT lacks the vision to deliver genuine advantage for UK plc in this crucial infrastructure.  Gordon Brown needs to get Lord Mandelson and Alastair Darling talking about something other than bonuses for failure in our Banks.

Further information @ H2O Networks site.

Is Amazon about to enter the Grocery business in the UK?

It was recently reported that Amazon is to take on the major supermarkets with the launch of an online food store in the UK and Industry experts say the ambitious plans are a huge threat to Tesco, Sainsbury's, Asda and Morrisons.

However, speaking in the Grocer, Amazon’s UK MD, Brian McBride has denied that they have any such plans, as the company “had enough on its plate” adding that “it’s a bit of a speculative story”.

So what is the background to this story.  Amazon is undoubtedly an incredibly successful online retailer and has a massive customer base for its range of DVDs, books, electrical products and most recently opened new clothing offering.  In the US, Amazon have indeed launched an online grocery service called Amazon Fresh, which was piloted in 2007 and is limited to Seattle and the surrounding area.

Unlike the US, the UK has a plethora  of main supermarket groups running successful Internet Grocery services as well as the privately funded Ocado service delivering Waitrose products.

Despite claims in the Daily Mail at the end of January, that Amazon could easily roll out a grocery service in the UK as “due to the shorter delivery distances”.  I suspect Ocado might disagree.  Amazon have been running the “trial” service for almost two years and is still limited to their home town of Seattle.  It still has not rolled out to other lucrative metropolitan markets in the US let alone considered expanding in the UK.  Equally I wouldn’t necessarily accept that Amazon is entirely on top of its delivery game in the UK judging by some recent delivery experiences of my own.  It is one thing to deliver a book or DVD, it is quite another to deliver ones weekly shop.  Maybe a better plan may be a JV with Ocado would be a better option extending the Amazon online brand magic to the newly independent internet grocer.

In the meantime, I don’t think Tesco’s or ASDA will be factoring in UK competition just yet.  Lucky the snow came along before the newspapers wrote any more "speculative stories".

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.

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.