Slowing UK broadband market but superfast represents half

Analysis of Q3 2017 UK ISP numbers

We have published our third quarter results for the UK fixed broadband market giving total subscriber and broadband penetration numbers, as well as market shares for the large residential broadband providers.

Key fixed broadband market trends this quarter:

  • Q3 2017 results indicate a stalling overall UK fixed broadband market with net quarterly additions their second lowest since records began
  • Nevertheless the UK total fixed broadband market tops 26 million lines for the first time with household penetration at nearly 85 per cent
  • At 53 per cent, superfast services of 30Mbps and above now represent over half of all fixed broadband lines
  • Some service providers are faring better than others: Virgin Media continues the year with another relatively strong quarter, benefiting from an increasing footprint with its Project Lightning rollout.

UK fixed broadband fails to show its usual bounce

The third quarter of 2017 saw the country’s fixed broadband market experience its second lowest quarterly additions since Point Topic records began in 2006, in a sign that continual growth in the sector is stalling. The period from July to end-September 2017 witnessed net adds of just under 119,000 broadband lines. This compares with quarterly increases of 331,000 a year ago, 220,600 in Q3 2015 and 233,700 in Q3 2014.

Looking at data from previous years indicates the third quarter is when the market tends to bounce back from a traditionally low Q2. But as Figure 1 below illustrates, this year’s bounce has barely registered.

That said Q3 2017 does take the UK’s total broadband market to over 26 million for the first time. And while the overall market may be static, over half of the UK’s fixed broadband lines now provide superfast speeds to customers. Point Topic estimates there were just below 13,795,000 active broadband lines offering speeds of 30Mbps and above at the end of September 2017.

In terms of technologies, Digital Subscriber Line (DSL) continued its decline during the three months to end-September 2017 bringing the total DSL base to under 12 million for the first time.  Meanwhile cable modems stand at an estimated 5,084,600 (Virgin Media and WightFibre combined) and FTTx lines have increased to an estimated 8,857,000.

Figure 1: Broadband lines added in the UK 2011 to 2017

Superfast accounts for more than half of all broadband lines

Point Topic estimates that nearly 53 per cent of total broadband lines active in the country were offering speeds of 30Mbps and above at the end of September 2017. This includes fibre-to-the-cabinet (FTTC), fibre-to-the-premises (FTTP) and fibre-to-the-building (FTTB) lines as well as cable modems.

BT remains the largest retailer of FTTx lines with nearly 57 per cent of its broadband customer base subscribing to Infinity products.

TalkTalk says its FTTx total is now 1,088,000 equating to just over 36 per cent of its retail broadband subscriber base. We estimate Sky to have around 1,784,000 FTTx lines assuming that 30 per cent of its estimated broadband base takes superfast products. We have also assumed Vodafone has a 30 per cent penetration rate for superfast broadband. In both cases this figure may be higher, especially for Vodafone given it is not converting an existing fixed-line base.

Including these players using the Openreach fibre-based network there are 3,355,000 lines being resold on this infrastructure by non-BT communications providers. Additions to non-BT service providers are running at 64 per cent of the 506,000 FTTx lines added during Q3 2017, the highest quarterly share yet in terms of Openreach FTTx additions for non-BT suppliers. This is up from 61 per cent in the previous quarter and 51 per cent year-on-year, and represents 39 per cent of Openreach’s active FTTx lines (as illustrated in Figure 2 below).

The rest of the fixed superfast market is made up of KCOM, Kingston upon Hull’s incumbent operator, which we believe has around 50,000 active superfast lines on its predominantly FTTP network. And the alternative network operators, which are estimated to have 167,000 active superfast lines.

Figure 2: Broadband lines added in the UK 2011 to 2017

Get access to full report and statistics

The latest broadband subscriber numbers by technology, ISP market shares and emerging trends can all be found in our Excel spreadsheets, UK Broadband Market Statistics Q3 2017 and UK ISP Market Shares Q3 2017, and accompanying PDF analysis report. These are available to subscribers of Point Topic’s UK Plus service. To find out more, please telephone +44 (0)20 3301 3303 or e-mail simona@point-topic.com

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