UK hits seven million superfast milestone

The UK has passed the seven million superfast broadband lines mark with BT Consumer and Virgin Media adding an estimated 396,400 superfast lines in Q3 2014, up on the previous quarter’s figure of 371,400. Factoring in 828,000 resale lines on the Openreach network, a further 10,000 Lightstream subscribers for Kingston upon Hull’s incumbent KC, and an estimated 34,500 superfast lines on alternative operators’ networks, Point Topic estimates the country had 7,157,000 superfast lines at 30Mbps and above at the end of September 2014.

The superfast scene is still dominated by Virgin Media and BT Consumer. Virgin Media continues to lead the superfast pack ahead of BT Consumer by over a million at an estimated 3,750,000 lines. The cable operator reported 56 per cent of its broadband subscribers, that is just under 2.5 million, were taking 50Mbps and above services having added 431,000 to this tier during Q3 2014. This higher speed is the cable operator’s new definition of “superfast” and it has ceased publication of subscriber numbers taking 30Mbps and above services. Point Topic has therefore estimated the cable operator’s superfast total customer base using a three per cent growth rate experienced in previous quarters. Growth in its 50Mbps and above customer base has been bolstered by Virgin Media’s continued speed upgrade programme.

Meanwhile BT Consumer gained 203,000 net BT Infinity adds which means 34 per cent of its retail base is now on FTTx-based services. According to BT Group chief executive, Gavin Patterson, it is BT Sport and fibre which are driving growth.

Nevertheless other service providers are reporting growing demand for superfast speeds. TalkTalk added 67,000 fibre subscribers during Q3 2014 making this its strongest ever quarter of fibre growth. TalkTalk says that 8.5 per cent of its combined broadband and telephony base takes FTTx services, and the company expects that demand will grow steadily with heightened awareness of the product and growing bandwidth usage. The service provider had a total of 308,000 FTTx-based customers at the end of September 2014.

Openreach added 344,000 net FTTx connections during Q3 2014 – this is nine per cent more than last year. Significantly over 40 per cent of these connections were accounted for by non-BT service providers. Resale lines now account for 24.6 per cent of total FTTx lines connected.

Superfast coverage continues to ramp up

In terms of the country’s superfast footprint, Openreach now passes more than 21 million premises with its predominantly fibre-to-the-cabinet network. The infrastructure provider has connected 16 per cent of these, up from 15 per cent at the end of June 2014. Openreach added 344,000 net FTTx connections during Q3 2014 – this is nine per cent more than last year. Around 570,000 premises have been passed in 44 areas at the end of September with funding from Broadband Delivery UK, a figure that should rise fairly quickly as momentum in deployment gets underway.

Virgin Media began upgrading some legacy network during Q3 2014 to extend its digital cable services to a further 100,000 homes in East London, as announced earlier in the year. It has also begun small network extensions elsewhere including in Glasgow and Teesside. The operator says it will continue to evaluate opportunities to expand its digital cable network. Overall at the end of September 2014 the company’s cable network passed 12,584,100 homes with 12,522,700 of these technologically capable of receiving two-way services including video, internet and telephony.

This latest quarter also saw the long expected announcement that Virgin Media is to focus solely on its own infrastructure. TalkTalk reached an agreement to acquire Virgin Media’s national brand customers – these comprise 97,700 ADSL customers outside the Virgin Media cable footprint. TalkTalk says these are substantially on-net for its own unbundled network and represent a good strategic acquisition that will accelerate growth of its broadband, TV and fibre bases. A large proportion of these subscribers are expected to be migrated to the TalkTalk network through 2015. The AOL customer base is also due to be rebranded to TalkTalk during the next six months.

In York, TalkTalk says it has made good progress on its fibre-to-the-premises joint venture with CityFibre and Sky. Fujitsu has been appointed as the infrastructure contractor and the first phase of digging has commenced to build the network out from TalkTalk’s points of presence to its cabinets in late October 2014. If the trial is successful TalkTalk says there is potential to build a pure fibre network to 10 million households. Access to Telefónica UK’s 4G network also fits with TalkTalk’s long term strategy to build a small cell and fibre-to-the-premises network.

Fixed broadband market shows solid quarterly performance

In terms of the broadband market in general, business is looking bright for the UK’s fixed broadband providers with 233,700 net broadband additions in the three months up to end-September 2014, bringing the UK total broadband base to 23,434,500. Additions were far better than the same period a year ago (200,800) and were also up on two years ago (207,600).

A rise in the number of homes being built is likely to account at least partially for this uplift – it is also notable that Openreach added 15,000 new lines during Q3 2014 bringing the number of newly installed lines up by 106,000 year-on-year. This rise in broadband sales bodes well for the sector going into the winter months and what is traditionally the broadband industry’s busiest period.

Overall broadband penetration in the UK stood at 77.1 per cent at the end of September, up from 76.7 per cent at the end of June 2014, and up from 74.7 per cent year-on-year.

Broadband lines added in the UK 2008 to 2014Figure 1: Broadband lines added in the UK 2008 to 2014

Get access to the full report and statistics

The latest broadband subscriber numbers by technology, ISP market shares and emerging trends can all be found in our spreadsheets, UK Broadband Market Statistics Q3 2014 and UK ISP Market Shares Q3 2014, and latest quarterly 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 toby.french@point-topic.com.

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