6 May 2012UK Broadband Overview

Growth slowed for the UK fixed broadband market in 2011, with subscribers increasing by 5.75% compared with just over 6.8% in 2010. Considering the headwinds – fragile consumer confidence, static or shrinking GDP, the challenge from mobile and the declining base of narrowband households to be converted to broadband – it might be surprising that the market did so well.

A major contributor was the growth in superfast broadband lines, from 175,000 in total at the beginning of the year to almost 1.06 million on BT and Virgin Media networks by the end. The growth of superfast broadband, offering download speeds of 25Mbps or more, was alone equal to 78% of the total growth in fixed broadband lines during the year. Although the arrival of superfast cannot be equated directly to overall growth in the fixed broadband market, it played its part by raising consumer interest, offering performance far better than mobile broadband and increasing average revenue per user.

Mobile broadband usage did continue to rise sharply, with three in ten mobile owners now using a smart phone. At least 7% of homes now use mobile as their sole means of accessing broadband services with take-up rates highest among the younger population.

Broadband based on fixed wireless access and satellite technologies has become a far more attractive option for many following increases in speed and reliability, and as a result players in these sectors have been more proactive during 2011 in promoting their offerings than in previous years.

The past year has been an active one for UK broadband policy and regulation. The regulatory situation continues to mature with pole and duct sharing by BT now commercially available and a series of tighter measures on information given to consumers by providers to inform their broadband choices. The Coalition Government has continued to push the broadband agenda with something of a carrot and stick approach, finding new funding for broadband provision in both urban and rural areas and setting both tight deadlines for Local Broadband Plan submission. Linking wider and faster connectivity to economic growth has kept broadband high up the political agenda and a central part of the country’s infrastructure development policy.

This overview is a shorter version of two full reports available to UK Plus subscribers. The first of these, which focuses on the UK broadband market, can be found here. The second, dealing specifically with broadband policy and regulation, can be found here.