Thinkpoint – Broadband Technology Update

September 2018

The second set of outputs from ThinkPoint, the new joint product from Point Topic and thinkbroadband, includes a detailed broadband technology picture in the UK.

The broadband technology picture in the UK continues to evolve.  With more operators and more subscribers willing to pay for ultrafast broadband, offering ever more important services in our lives, there is good reason to be bullish about the prospects.  Where there are winners there are going to be losers too of course.

Openreach is ramping up their FTTP and has scaled back their Gfast ambitions.  The numbers they’ve published on premises passed and subscribers allows a first look at the relative take-up rates.  There are a number of caveats but we can see that:

  1. FTTP Rate of Adoption (RoA) is 40 to 50 times higher than Gfast – FTTP has been in the market longer and much of the focus is on business, at least historically, as opposed to Gfast targeted at residential primarily.
  2. Gfast appears to be accelerating – not enough data points to draw concrete solutions and when the marketing kicks in properly and other operators start retailing over the network we’ll see a change too.

We’ve taken the data from the BT release linked above:

The FTTP penetration rate already at over 30% is pretty impressive.  One factor could be the various voucher schemes and resellers who target specific, often self identified, buildings and areas.

Urban and rural – digital divide in reverse?

If we examine where the FTTP appears versus Gfast we can see, and calculate, that FTTP appears to be much less focused on high density/high population urban areas.  Again there are factors that help to drive this with FTTP the preferred solution for most centrally funded, often rurally targeted, programmes.  We believe we see evidence of the ‘outside in’ approach encouraged by the government.

We believe we’ve identified around half the Gfast locations and two thirds of the FTTP locations that Openreach claim in their numbers above.  It usually takes a few weeks for us to catch up on the footprints at a particular time.

Another interesting output is the apparent targeting, or not, of Virgin Media’s network.  Gfast is very much a response to DOCSIS competition, as we’ve known for a while, but we can see the split in the data we’ve gathered so far:

The ThinkPoint product provides access to detailed, granular information sets and analysis to enable outputs such as you see above.  We can also answer more complex questions.

How much will consumers adopt, where and when

This question is coming up more frequently now.  Broad ‘build it and they will come’ planning is giving way to the need for specifics.

Some data is available for the UK and you can draw parallels with the advent of FTTC and the effect it had on DSL for example but there’s plenty of data to pick from when we look globally. It is a complicated picture and drawing direct parallels between markets needs to be done with care.  Relative adoption, substitution and churn between suppliers and technologies has multiple dependencies and it can often be difficult to get access to enough datasets, across enough time and markets with enough granularity.

Point Topic’s work on Global Broadband Statistics (GBS), the Broadband Coverage in Europe projects for the European commission and our extensive work in the UK allows us to support our outputs with just such a range of data.

At one extreme we have China and a quick examination of the subscriber time series by technology is below. We can output from our Global Broadband Statistics service a quarterly view on technology adoptions and market shares:

For our purposes in understanding the UK this offers one input but of course it would be incorrect to directly compare the Chinese and UK markets.  We can move closer however with other countries like Portugal and Sweden offering further supporting data from regions with more similarities to our own market, although with a more mature FTTP scenario:

We also have a much better idea of the footprints (premises passed) for the European markets which enables us to produce data on the RoA, a vital component of forecasting what we expect to happen in the UK in the next ten years.  There are a range of outputs and geographic splits available in the BCE which allow us to examine the RoA, for example we can generate the next generation access coverage in rural areas by NUTS3 as below:

Another vital input are the relative tariffs on offer from the operators.  Again Point Topic has significant amounts of data available from our Broadband Operators and Tariffs (BOTs) service.  We can examine the comparative costs and coverage by operator and technology and provide another set of datapoints for the RoA calculations.  A range of outputs can be generated and broken down over every quarter in detail for the last fifteen years.  This unique combination of datasets allows us to understand and model broadband better, we believe, than any other local or global source.

We’ve already produced a number of versions of the expected availability and adoption of technologies for the UK.  These are refined as the footprints (and intersections) of the network operators release more information.  The most recent from Openreach, linked above, is being worked into our next set of outputs (4.1) at the moment.

Based on all the above we believe that the FTTP churn rate in the UK will look something like this:

Get more data

We provide this data, at postcode level, to a range of clients for a range of applications.  If you want to see some detailed outputs just let us know or see our ThinkPoint product page and brochure.  For example, for appropriate parties, we can send you version 4.0 of a UK exchange level coverage by technology forecast set up to 2025, just contact us on info@point-topic.com.

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