UK broadband forecasts to 2020 – by technology

Broadband market experiences continued consumer squeeze, hampered by late FTTx deployment

UK broadband forecasts by technology to end 2020 show short term cut in expectations but acceleration later in the decade.

Point Topic has cut the forecast for DSL, FTTx and overall broadband subscribers in the latest update of UK broadband forecasts. We have reduced our expectations for end 2016 by 10% from two years ago. We project a total of 23.88 million broadband lines by end 2016 and 25.41 million by the end of 2020.

UK Broadband Forecasts to 2020

FTTx has been reduced more than other technologies as growth has been delayed due to BDUK delays and the continued pressure on consumer spending.

The delay, which continues even now in some areas, in the BDUK process has we believe played the largest part in lower than expected adoption. However there are signs that rapid roll-out by BT and recovering consumer demand are starting to counter these effects and while we still expect FTTx to take more time than previously forecast it will come to dominate the consumer market well before the end of the decade.

Cable market – slow and steady

The Virgin Media take-over has slowed the growth of cable now and in the future. The latest statements from Liberty Global indicate that the cable footprint will not grow in the forseeable future.

Their high bandwidth USP is also under threat and while they still offer more than the competition and would expect to maintain some gap going forward with DOCSIS3.1 expected to start deployment in the next 18 months the marginal utility of more bandwidth for consumers is declining.

DSL – the last hurrah

End to end copper connections are declining in the UK. This process will acceleate in the coming years and will reduce the number of lines to just over a million by the end of the decade.

Copper will still be a part of the UK network for the forseeable future though. VDSL with the addition of vectoring will provide enough bandwidth for many consumers and the advent of G.fast, expected from late 2015 on, will allow cost effective deployment of higher bandwidth coverage in many areas.

FTTH/B/P

End to end fibre will continue to be a niche technology in the UK. The current costs of a fibre link, particularly the customer contribution charged for deployment, mean BTs fibre on demand offering won’t be a mass consumer option. It is expected to come down but with most households having sufficient bandwidth over VDSL, DOCSIS3 and 3.1 and later G.fast consumer demand will likely be low.

Resellers

As DSL subscriptions decline the smaller resellers in particular are coming under pressure. They are fighting for a shrinking market and have to make the transition to reselling higher bandwidths or deploy their own networks.

The absence of full LLU for BT FTTx makes it difficult for them to distinguish themselves from the big players and they end up competing through straight marketing where they are out-gunned.

By 2020 the UK will have nearly 20 million FTTx subscribers and in excess of 23 million superfast households. The big players will continue to do well as will those niche players who’ve picked their markets carefully.

Increasing penetration – the next challenge

New subscribers are becoming increasingly rare.  Many operators are focusing on churning customers from the competition.  Those households left without a broadband line are increasingly resistant, for one reason or another, to purchasing a broadband subscription.

It will be increasingly difficult to persuade these potential customers to sign up and it will be important to understand some of the reasons and predictors of low adoption in an attempt to focus marketing and offers precisely.  Point Topic has recently published a paper The who, where and why of Digital Deprivation in the UK which starts to reveal the picture in England.

Find out more

This analysis is taken from the full report and statistical outputs in the point Topic UK Plus service.  Subscribers can access the data in the report UK broadband forecasts by technology to Dec. 2020. Telephone oliver.johnson@point-topic.com or telephone +44 (0)20 3301 3303 for more details.

Please follow and like us: