Fixed line broadband market sees modest growth but overall sector conditions remain challenging
Retail (consumer and business) sector
Total Q3 2024 FTTH/P/B, FTTC, cable, FWA/satellite and DSL retail connections saw a 0.12% increase during the quarter and stood at an estimated 29.51m from 29.47m q-o-q and up from 29.39m in the previous year.
The stall in the fixed broadband retail market remained, with ~36k net broadband subscriber additions compared to ~18k net additions in Q2, and -17k in the previous year.
We estimate that BT’s Consumer division (which includes business) saw an overall loss of -76k compared to -28k subscribers in the previous quarter; its FTTP base added 100k FTTP connections to reach ~2.8m up 33% y-o-y.
For the other major ISPs, Vodafone had the strongest quarter with ~50k broadband net additions; followed by Virgin Media O2’s (VMO2) 16k additions, Sky saw a very unimpressive quarter with an estimated 2k additions, followed by TalkTalk’s -120k losses as it continued to restructure, find cost efficiencies, and cut its marketing budget to secure new subscribers.
VMO2 continued to struggle with Altnet overbuild and competitive pricing as its broadband customer base decreased to 5.72m; its overall in-footprint penetration dropped to 32% (down from 32.6%) compared to Openreach’s 34.8% (see Figure 1).
Figure 1: FTTP / Gigabit-capable retail broadband take-up rates, Q3 2023 – Q3 2024
Source: Point Topic estimates and company reports
Independent (or AltNet) providers[1] also struggled with economic headwinds as they have slowed down their FTTP network rollouts to focus on subscriber take-up, and saw ~160k net additions up from around ~100k additions in the previous quarter.
We estimated AltNets total consumer broadband base reached just over 2.42m up from 2.26m in Q2 and 1.87m y-o-y (Figure 2).
Figure 2: Annual growth rate of retail FTTP lines
*BT Consumer includes EE and Plusnet estimates. Source: Point Topic estimates and company reports
Infrastructure (wholesale) sector
Total Q3 2024 FTTH/P/B, FTTC, cable, FWA/satellite and DSL wholesale connections saw a 0.16% increase during the quarter and stood at an estimated 29.58m from 29.53m q-o-q and up from 29.39m in the previous year.
In our report looking at FTTP coverage as it stood in September 2024, coverage was just over 23.2m premises (70.5%), up from 60.7% in Q2.
Openreach’s FTTP connections increased by 446k q-o-q and reached 5.53m up from 5.08m; it delivered its peak FTTP network rollout of 1.06m premises passed in the quarter with a footprint of 15.88m (Figure 3).
Figure 3: Openreach ultrafast coverage, connections and penetration rates Q3 2022 – Q3 2024
Source: BT Group company reports and Point Topic estimates where necessary
VMO2’s FTTP build, primarily on behalf of nexfibre, reached 281,100 new premises in Q3 2024, with a 44.2% increase in build rate in the first nine months of 2024 compared to 2023. This includes the transfer of the first Upp premises from Virgin Media O2 to nexfibre following the acquisition of the Altnet in 2023 and the successful completion of integration work, with the majority of the 175,000 acquired premises still to be transferred.
We estimated CityFibre’s connections to have increased by ~26k to reach 450k during the quarter, with an overall penetration rate of 13%; however, in its most mature markets take-up rates are around 30%.
AltNets had a stable quarter with around 200k net broadband additions down from 220k in the previous quarter (Figure 4).
Figure 4: Year-on-year comparison of FTTP take-up rates of selected Altnets
Source: Point Topic estimates and company reports
[1] Point Topic tracks 106 AltNet providers ranging from micro / local ISPs to larger providers with national coverage.
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