Broadband Benchmark Update Q2: April - June
2006
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This report is the sixth in a series of broadband benchmark
reports produced for the Welsh Assembly Government's Broadband
Wales Unit. This edition covers the broadband market in Wales, the
UK and the rest of the world; with data based – where available –
on the state of play up to the end of June 2006.
Estimates calculated from operator figures indicate that 41.5%
of Welsh households had a broadband connection at the end of June
2006. This equates to 19.4 broadband connections per 100
inhabitants and is in-line with comparative figures for the UK as a
whole.
Competition in the LLU sector has increased after Tiscali
became the second LLU operator to enter the market in Wales,
unbundling four exchanges. Furthermore, Orange, Be Unlimted and The
Carphone Warehouse have all earmarked exchanges in Wales for
unbundling as part of their respective network roll-out
programmes.
With regards to availability, almost all Welsh households are
now able to receive some form of broadband service. However,
availability of higher-bandwidth services remains very low compared
to some of the world's leading broadband nations. Only a third of
all Welsh households are able to receive a broadband service that
provides download rates of 8Mbps and services of higher-bandwidths
were not available at all. Services offering bandwidths of up to
24Mbps are likely to enter the market in the near future as LLU
operators bring ADSL2+ offerings to unbundled exchanges, although
only a relatively small proportion of households will receive the
higher-end bandwidths due to technological constraints.
Higher-bandwidth ADSL2+ services will become widely available
as part of BT's 21CN rollout, but this will not be complete until
2011 and only a relatively small proportion of households will
receive the higher-end bandwidths due to technological
constraints.
The availability of higher-bandwidth services is set to become
an increasingly important issue over the next few years after
estimates predicted that demand for bandwidth will increase
substantially over the next two to six years. These estimates
indicate that demand may increase to levels that are beyond the
capabilities of current DSL technologies and that other
technologies may have to be considered for broadband delivery
within this timeframe.
Evidence that bandwidth demand is reaching levels beyond the
capabilities of DSL can be seen in South Korea, which continues to
show signs that its broadband market has moved on to the next stage
of development. Having neared market saturation for broadband
connections, the latest trend is towards the substitution of DSL
connections for higher-bandwidth cable and fibre based connections.
Despite this trend, DSL remains the technology of choice on a wider
scale and is in fact becoming increasingly dominant
worldwide.
ADSL Broadband (Asymmetric)
According to BT, more than 99.5% of premises in Wales are
connected to a DSL enabled exchange. However, due to localised
technical issues such as distance from exchange or poor quality of
networks, some premises within these exchange areas are not
suitable for delivery of broadband services, or can only access
services at very low speeds.
Figure 1 - Estimated coverage of households by
minimum downstream speed, Q1 2006, Analysys Consulting
Limited
According to Analysys Consulting Limited, 98% of Welsh
households can receive a 0.5Mbps downstream service, 95% can
receive a 1Mbps service and 92% can receive a 2Mbps service. While
these figures are close to the comparative UK figures, the
difference between availability of broadband services in Wales and
the UK increases as the bandwidth of these services increases.
Services of 4Mbps and above are available to 81% of Welsh
households, compared to 86% of UK households and 8Mbps services are
available to 33% of Welsh households, compared to 53% of UK
households. No services of 16Mbps or above were available in Wales
in Q1 2006, while 7% of UK households could access these
services.
Figure 2 - Estimated coverage of
households by minimum upstream speed, Q1 2006, Analysys Consulting
Limited
A similar story applies for the upstream speed of services.
Services with a minimum upstream speed of 0.5Mbps are available to
98% of Welsh households, which is close to the near 100%
availability in UK households. By contrast, only 27% of Welsh
households can access services with 1Mbps upstream speeds, compared
to 50% for the UK. Furthermore, only 26% of Welsh households can
access services with 2Mbps upstream speeds, compared to 48% for the
UK.
Exchanges Deemed Commercially Unviable
On 14th March the Welsh Assembly Government's Broadband Wales
Programme awarded a contract to BT Group to provide infrastructure
for the final exchange areas in Wales that are without broadband as
part of the Regional Innovative Broadband Support Scheme
(RIBS).
The broadband rollout will be implemented in a two-staged
approach. The first stage, which began in June 2006, concentrates
on enabling the remaining exchanges in Wales that are not broadband
enabled. Once this work is completed, there will still be a small
proportion of the population who live inside enabled exchange areas
but still cannot access broadband due to a variety of technological
issues. The second stage of the rollout will then focus on
identifying these remaining not-spots and exploring ways of
bringing broadband to these residents.
|
Exchange Name
|
Local Authority
|
Ready for Service Date
|
Actual date of
enablement
|
|
Gwynfe
|
Carmarthenshire
|
30-Jun-06
|
30-Jun-06
|
|
Llangurig
|
Powys
|
30-Jun-06
|
30-Jun-06
|
|
Llanarmon
|
Wrexham
|
30-Jun-06
|
30-Jun-06
|
|
Moylegrove
|
Pembrokeshire
|
30-Jun-06
|
30-Jun-06
|
|
Llanwddyn
|
Powys
|
07-Jul-06
|
07-Jul-06
|
|
Penmaen
|
Swansea
|
07-Jul-06
|
07-Jul-06
|
|
Cynghordy
|
Carmarthenshire
|
14-Jul-06
|
14-Jul-06
|
|
Merthyr Cynog
|
Powys
|
21-Jul-06
|
14-Jul-06
|
|
Pantydwr
|
Powys
|
21-Jul-06
|
21-Jul-06
|
|
Rhandirmwyn
|
Carmarthenshire
|
22-Jul-06
|
21-Jul-06
|
|
Angle
|
Pembrokeshire
|
22-Jul-06
|
21-Jul-06
|
|
Capel Curig
|
Conwy
|
28-Jul-06
|
24-Jul-06
|
|
Castle Caereinion
|
Powys
|
28-Jul-06
|
28-Jul-06
|
|
Gladestry
|
Powys
|
28-Jul-06
|
24-Jul-06
|
|
Abergynolwyn
|
Gwynedd
|
28-Jul-06
|
28-Jul-06
|
|
Whitton
|
Powys
|
28-Jul-06
|
14-Jul-06
|
|
Skenfrith
|
Monmouthshire
|
28-Jul-06
|
28-Jul-06
|
|
St Nicholas
|
Pembrokeshire
|
28-Jul-06
|
28-Jul-06
|
|
Llangunllo
|
Powys
|
05-Aug-06
|
04-Aug-06
|
|
Bryneglwys
|
Denbighshire
|
05-Aug-06
|
28-Jul-06
|
|
Cyffylliog
|
Denbighshire
|
05-Aug-06
|
28-Jul-06
|
|
Llantilio
|
Monmouthshire
|
05-Aug-06
|
28-Jul-06
|
|
Pennal
|
Gwynedd
|
11-Aug-06
|
11-Aug-06
|
|
Rhydymain
|
Gwynedd
|
11-Aug-06
|
04-Aug-06
|
|
Ganllwyd
|
Gwynedd
|
11-Aug-06
|
04-Aug-06
|
|
Glandyfi
|
Ceredigion
|
19-Aug-06
|
11-Aug-06
|
|
Beguildy
|
Powys
|
25-Aug-06
|
28-Jul-06
|
|
Llannefydd
|
Conwy
|
01-Sep-06
|
01-Sep-06
|
|
Bontddu
|
Gwynedd
|
02-Sep-06
|
01-Sep-06
|
|
Hundred House
|
Powys
|
08-Sep-06
|
25-Aug-06
|
|
Painscastle
|
Powys
|
22-Sep-06
|
22-Sep-06
|
|
Cross Ash
|
Monmouthshire
|
22-Sep-06
|
08-Sep-06
|
|
Rhiw
|
Gwynedd
|
22-Sep-06
|
22-Sep-06
|
|
Llawhaden
|
Pembrokeshire
|
To be confirmed
|
|
|
Rhos
|
Pembrokeshire
|
To be confirmed
|
|
Table 1 – Timetable for the enablement of the
remaining unviable exchanges in Wales, September 2006, Broadband
Wales Unit
The timetable above shows that four of the thirty-five
unviable exchanges had been enabled at the end of June 2006. As
such, 403 of the 434 telephone exchanges in Wales were enabled for
the provision of ADSL broadband at that time. Rapid progress has
been made since and at the time of publication only two exchanges
in Wales remained unable to provide broadband.
Furthermore, all of the exchanges enabled by the RIBS project
will be able to deliver ADSL Max services and will also be included
in any future national upgrade programmes such as ADSL 2/2+.
Residents in Wales who are still unable to receive a broadband
connection even after their local telephone exchange has been
enabled in the first stage of the scheme should register their
details using the Broadband Wales Observatory Not-spot form which
can be found at
www.bbwo.org.uk/not-spots or
www.abec.org.uk/mannaugwael.
Details provided in the forms will be used to locate the areas
within Wales where broadband remains unavailable and, once
identified, work can begin to enable broadband in these
areas.
BBWO estimates that there has been no change in the
availability of SDSL services in Wales over the last quarter and
that SDSL continues to cover 25% of all domestic and 29% of all
non-domestic sites in Wales. The UK average is estimated to be 42%
of sites, with only Scotland having lower SDSL availability than
Wales at 17%.
Figure 3 - Availability of services with a minimum
downstream speed of 512kbps by infrastructure operator, Q1 2006,
Analysys Consulting Limited
Infrastructure competition is not as strong in Wales as it is
in other parts of the UK. Figure 5 shows that there are fewer
alternative infrastructure providers in Wales than in the UK as a
whole, with only one cable operator and one LLU operator providing
infrastructure competition to the incumbent in Q1 2006.
However, the number of operators actively involved in local
loop unbundling in Wales has since begun to increase; Tiscali has
become the second LLU operator to enter the market in Wales after
it unbundled 4 exchanges in Bangor, Bridgend, Cwmbran and Llanelli
during March 2006. Meanwhile, Bulldog remains as the biggest LLU
operator within Wales having unbundled 9 exchanges within the
Cardiff and Wrexham areas in May 2005.
Further operators are due to enter the market in Wales over
the next twelve months after announcing their intentions to expand
their network coverage into Wales:
- Be Un Limited are due to unbundle 21 exchanges between March
and December 2007;
- Carphone Warehouse are due to unbundle 30 exchanges by the end
of August 2006;
- Orange (previously Wanadoo) are due to unbundle 12 exchanges by
the end of September 2006.
Cable modem Broadband Coverage
BBWO estimate that cable coverage in Wales has remained stable
since Q1 2005. NTL, now the only cable operator in the UK after
merging with Telewest, has a network capable of reaching within
500m of between 300,000 and 35,000 households in Wales.
Figures from Ovum suggest that 25.1% of Welsh households are
able to access broadband services via cable modem.
Wireless Broadband Coverage
FWA
Fixed Wireless Access broadband is offered by a limited number
of niche providers in Wales, however, no figures for the overall
coverage of these services are currently available.
Wi-Fi Hotspots
BBWO estimate that there are more than 500 public access
hotspots in Wales
.
BT announced in May 2006 that it would be covering the City of
Cardiff with a Wi-Fi hotspot network.
3G
No new information was made available for 3G coverage over the
quarter.
Satellite broadband services are available to over 99% of all
sites in Wales.
Figure 4 - Terrestrial broadband
coverage of the UK at Q4 2005, Ovum, UK Broadband Status Report,
March 2006
|
|
DSL
|
Cable
|
FWA
|
Total
|
|
East Midlands
|
99.9%
|
54.8%
|
20.8%
|
99.9%
|
|
East of England
|
99.9%
|
49.4%
|
0.3%
|
99.9%
|
|
London
|
100%
|
55.1%
|
36.6%
|
100%
|
|
North East
|
99.9%
|
48.9%
|
0%
|
99.9%
|
|
North West
|
99.9%
|
54.7%
|
3.4%
|
99.9%
|
|
Northern Ireland
|
99.4%
|
32.5%
|
0%
|
99.5%
|
|
Scotland
|
99.5%
|
42.0%
|
0%
|
99.5%
|
|
South East
|
99.6%
|
45.6%
|
7.4%
|
99.7%
|
|
South West
|
99.5%
|
40.2%
|
12.1%
|
99.7%
|
|
Wales
|
99.3%
|
25.1%
|
|
99.3%
|
|
West Midlands
|
99.7%
|
63.0%
|
22.2%
|
99.7%
|
|
Yorkshire & Humberside
|
99.9%
|
42.6%
|
13.8%
|
99.9%
|
|
Total
|
99.7%
|
48.2%
|
11.2%
|
99.8%
|
Table 2 - Proportion of households covered by
broadband technologies by geographical region, Q4 2005, Ovum UK
Broadband Status Report, March 2006
According to figures from Ovum, 99.8% of UK households were
covered by broadband technologies at the end of 2005. This
represents a growth of around 0.1% over the previous quarter.
|
|
DSL
|
Cable
|
FWA
|
Total
|
|
Urban
|
99.9%
|
62.9%
|
15.9%
|
99.9%
|
|
Suburban
|
99.8%
|
36.6%
|
5.4%
|
99.9%
|
|
Rural
|
99.2%
|
7.4%
|
1.0%
|
99.2%
|
Table 3 – UK Household coverage by
mass-market broadband by area type, Q4 2005, Ovum UK Broadband
Status Report, March 2006
Coverage of broadband in rural areas of the UK has almost
caught up with coverage for the UK as a whole. However, competition
between infrastructure providers is significantly lower in rural
areas resulting in less choice and ultimately higher costs of
services in these areas. Another significant issue facing rural
areas is the low availability of services with higher bandwidths; a
result of longer average local loop lengths and the limitations of
DSL technology.
DSL Broadband Coverage
Figure 5 - Map of DSL broadband
coverage in the UK at Q4 2005, Ovum UK Broadband Status Report,
March 2006
ADSL Broadband (Asymmetric)
ADSL services are available to around 99.7% of all households
in the UK.
SDSL Broadband (Symmetric)
There have been no reported increases in the availability of
SDSL services over the quarter and, as such, estimated coverage
remains at just below 50% of UK households.
Local Loop Unbundled (LLU) Broadband
There are a number of operators now actively involved in local
loop unbundling in the UK. Table 4 summarises the status of LLU
enablement in the UK, including for each operator, the number of
enabled exchanges and the number of exchanges pending enablement
for Wales and the UK as a whole.
|
Operator
|
Exchanges in UK
|
Exchanges in Wales
|
|
Enabled
|
Pending
|
Enabled
|
Pending
|
|
Be
|
180
|
769
|
0
|
21
|
|
Bulldog
|
626
|
0
|
9
|
0
|
|
Carphone Warehouse
|
0
|
1045
|
0
|
52
|
|
Easynet
|
416
|
75
|
0
|
0
|
|
Homechoice
|
145
|
0
|
0
|
0
|
|
Edge Telecom
|
21
|
0
|
0
|
0
|
|
Pipex
|
25
|
2
|
0
|
0
|
|
Node4
|
4
|
0
|
0
|
0
|
|
Tiscali
|
249
|
0
|
4
|
0
|
|
Orange
|
218
|
87
|
0
|
12
|
|
Zen Internet
|
4
|
0
|
0
|
0
|
Table 4 - LLU exchanges in Wales
and the UK, www.samknows.com, July 2006
Currently, Bulldog and Easynet have the largest network of
unbundled exchanges, but this looks set to change when Be and
Carphone Warehouse unbundle their pending exchanges. Bulldog had
626 unbundled exchanges by the end of August 2006, but has no plans
to unbundle any further exchanges. Easynet had unbundled 416
exchanges by the end of August 2006 and plans to unbundle a further
75 by the end of October 2006.
Be has so far rolled out its network to 180 exchanges, with
769 pending - 267 of which will be unbundled by the end of 2006.
This will be further extended to provide coverage for 70%
population coverage by the end of 2007. This will make Be one of
the UK's largest broadband providers by installed local loop
unbundled (LLU) exchanges. In June 2006 it was announced that
02 had purchased Be.
The Carphone Warehouse are shortly expected to begin
unbundling 1,045 exchanges throughout the UK, although no 'ready
for service' dates are currently available. In April 2006 it
announced that it would offer 'free' broadband to end-users living
within its exchange areas. To take up the offer customers must
subscribe to Carphone's TalkTalk fixed line phone service for £9.99
a month and sign up to a minimum 18 month contract. A monthly line
rental charge of £11.00 will also apply making a total cost of line
rental, calls and broadband of £20.99 a month.
As of June 2006, AOL had unbundled around 200 exchanges,
unbundling more than 100,000 lines. In February 2006, AOL confirmed
that it planned to invest £120m in LLU, with the aim to unbundle
around 1000 exchanges.
ADSL2+
UKOnline, Bulldog, Be and Sky all offer ADSL2+ services over
their unbundled networks. The availability of these services, which
have a maximum download rate of 24Mbps, will increase in-line with
the operators' respective LLU roll-outs, although the speeds
available to each household will depend on their individual local
loop length.
21st Century Network
BT's 21st Century Network (21CN) will be an
end-to-end IP-based network and systems infrastructure that will
ensure that the delivery of next generation converged services will
be faster, more efficient and more cost-effective than over the
current network.
The migration of UK customer lines to 21CN is expected to
begin during November 2006. Residential end-users and businesses in
Cardiff and the surrounding area will be the first in the UK to be
connected when BT migrate around 350,000 customer lines in the
South Wales area.
According to BT, 21CN will deliver broadband services offering
a maximum download rate of 24Mbps based on ADSL2+ technology from
January 2008. While this will increase the coverage of
higher-bandwidth broadband services in Wales, the speeds available
to each household will depend on their individual local loop
length. Furthermore, the 21CN deployment is not expected to be
complete until 2011 which suggests that many households in Wales
will not receive the benefits of the new network for some
time.
Cable modem Broadband Coverage
According to NTL Incorporated, its network passes more than 12
million UK households and businesses. As such, cable broadband
services are available to 50% of UK households and 85% of UK
businesses.
Figure 6 - Map of cable-modem
broadband coverage in the UK at Q4 2005, Ovum UK Broadband Status
Report, March 2006
Satellite Broadband Coverage
Satellite broadband services are available to over 99% of
sites in the UK.
Wireless Broadband Coverage
According to figures from Ovum, broadband services via fixed
wireless access (FWA) technology remains available to 11.2% of the
UK population.
Figure 7 - Map of wireless
broadband coverage in the UK at Q4 2005, Ovum UK Broadband Status
Report, March 2006
Figure 8 - First generation
downstream broadband service coverage as a percentage of
households, Q1 2006, Analysys Consulting
Limited
'First generation' broadband coverage for countries, as shown
in Figure 8, indicates that Wales and the UK as a whole have the
highest levels of coverage of the listed countries. Most of the
listed countries have broadband networks that can provide a minimum
0.5Mbps service to more than 90% of households.
Figure 9 - Second generation
downstream broadband service coverage as a percentage of
households, Q1 2006, Analysys Consulting
Limited
In terms of higher bandwidth 'second generation' broadband
services, the levels of coverage vary greatly between countries.
Figure 9 indicates that the UK has relatively high availability of
4 and 8Mbps services but lags behind almost every other listed
country for coverage of higher speeds. The situation in Wales is
even worse with no coverage of services higher than 8Mbps in Q1
2006. The graph clearly indicates that the UK and many other major
broadband nations are still a long way behind leading nations,
Japan and Korea, with regards to the availability of very high
bandwidth services.
Research carried out by BBWO indicates that the costs of basic
broadband services, for both residential and business customers,
are the same in Wales as in the rest of the UK. Whilst the minimum
consumer spend now buys 'up to' 8Mbps services in all areas, the
service speeds available to businesses in Wales are lower than
those available in London and the South East.
|
|
Consumer
|
Business
|
|
|
Minimum
|
Maximum
|
Minimum
|
Maximum
|
|
|
£
|
Speed
|
£
|
Speed
|
£
|
Speed
|
£
|
Speed
|
|
London
|
9.75
|
8Mbps
|
14.00
|
24Mbps
|
13.61
|
8Mbps
|
75.00
|
24Mbps
|
|
South East
|
9.75
|
8Mbps
|
14.75
|
16Mbps
|
13.61
|
8Mbps
|
75.00
|
24Mbps
|
|
Welsh Cities
|
9.75
|
8Mbps
|
14.75
|
16Mbps
|
13.61
|
8Mbps
|
45.00
|
16Mbps
|
|
Welsh Towns
|
11.99
|
8Mbps
|
11.99
|
8Mbps
|
13.61
|
8Mbps
|
13.61
|
8Mbps
|
|
Welsh Villages
|
11.99
|
8Mbps
|
11.99
|
8Mbps
|
13.61
|
8Mbps
|
13.61
|
8Mbps
|
Table 5 - Minimum/Maximum Monthly
Spend for Business and Consumer Services, Q1 2006,
BBWO.
The highest speed available in the consumer market (i.e.
24Mbps) is not available in Wales to either business or household
customers, and is only available to a limited number of exchanges
in the UK. The highest speed available in Wales is a 16Mbps service
supplied by Bulldog. However, these services are only
available in nine exchanges in Wales – in the Cardiff and Wrexham
areas.
|
|
Index value Q4 2005
|
G7 Rank Q4 2005
|
Index value
Q3 2005
|
G7 Rank
Q3 2005
|
G7 Rank
Q1 2005
|
|
Japan
|
0.97
|
1
|
0.98
|
1
|
1
|
|
France
|
0.86
|
2
|
0.85
|
2
|
2
|
|
Canada
|
0.79
|
3
|
0.80
|
3
|
3
|
|
UK
|
0.77
|
4
|
0.76
|
4
|
4
|
|
Ireland
|
0.75
|
|
0.75
|
|
|
|
Italy
|
0.71
|
5
|
0.70
|
5
|
6
|
|
Australia
|
0.69
|
|
0.69
|
|
|
|
Sweden
|
0.64
|
|
0.65
|
|
|
|
US
|
0.63
|
6
|
0.62
|
6
|
5
|
|
South Korea
|
0.53
|
|
0.54
|
|
|
|
Germany
|
0.44
|
7
|
0.46
|
7
|
7
|
Table 6 – Pricing index at Q4 2005,
Ovum International Broadband Market Comparisons Update, March
2006
According to Ovum, the UK places fourth in the G7 in its
pricing index. The price index is calculated as the price of the
top 5 retail ISPs, weighted by market share. Prices used are for
mainstream residential products and include connection fees
amortised over a three-year period and are adjusted for purchasing
power parity (PPP)
[2]. Small improvements in
the price index have been made by the UK, France, Italy and the US
since Q3 2005, whilst the overall rankings remain unchanged.
The improvement in the UK price index was helped by AOL
lowering its prices in the last quarter of 2005. Germany has
seen a slight reduction of its price index, mostly as a result of
PPP changes.
According to point topic, in Q2 2006 the average price for DSL
entry level services fell by 9.3%, twice as much as the price
decline (4.5%) in cable modem services. Consequently, the
price gap between DSL and cable has increased to US$4.27.
Among the 18 operators included in the Point Topic survey, 5
(primarily in North America and EMEA) reduced their monthly tariffs
by up to 50%. Overall, the average monthly DSL tariff was
US$27.44 with Taiwan offering the cheapest DSL tariff. In the
FTTx market, prices have remained unchanged since Q2 2005.
BBWO estimates that 31.1% of BT landlines in Wales were using
DSL broadband in June 2006. Information regarding take-up of cable
broadband is not available specifically for Wales, but an estimate
of cable penetration in Wales based on UK figures indicates that
approximately 10.4% of households have a cable broadband
connection. This would total to suggest a penetration figure of
around 41.5% for Wales at the end of June 2006. This equates to
19.4 broadband connections per 100 inhabitants in Wales. This
figure is in-line with the UK and is an average figure when
compared to the rest of the EU.
Figure 10 -Broadband take-up by
population in the EU and Wales, Q2 2006, Analysys Consulting
Limited & BBWO
The Broadband Wales Residents Survey reported that broadband
take-up continued to rise in Wales after June 2006, and that 43% of
Welsh households had a broadband connection by the end of July
2006.
Furthermore, around 7% of respondents who knew the speed of
their broadband connection reported to have a connection that was
faster than 2Mbps, indicating that the majority of Welsh households
are still using 'first generation' broadband services.
xDSL Broadband
BBWO estimate that xDSL take-up has continued to grow over the
last quarter and that around 31% of households and businesses in
Wales able to access an ADSL enabled exchange had an ADSL broadband
connection at the end of June 2006. This represents an increase of
13% in broadband take-up by households and businesses in Wales
since June 2005.
|
|
UK
|
WALES
|
|
|
ADSL broadband connections
|
ADSL broadband connections
|
Percent of households and
businesses [3]
|
Percent of population [4]
|
|
Dec 04
|
|
|
14.9%
|
6.9%
|
|
Mar 05
|
5m 3
|
|
17.5%
|
8.2%
|
|
Jun 05
|
5.6m 3
|
250,000 4
|
17.9%
|
8.3%
|
|
Sept 05
|
|
302,000 5
|
21.6%
|
10.1%
|
|
Dec 05
|
6.9m 6
|
370,000 5
|
26.3%
|
12.3%
|
|
Mar 06
|
7.9m 6
|
395,000 5
|
28.2%
|
13.2%
|
|
Jun 06
|
8.7m 6
|
435,000 5
|
31.1%
|
14.5%
|
Table 7 - ADSL broadband
penetration in Wales, Q4 2004 – Q2 2006, BBWO
Cable broadband
Despite a fall in relative market share, the continued growth
in broadband penetration in the UK has enabled continued growth in
cable broadband take-up. In the absence of specific figures for
Wales for June 2006, BBWO estimates that cable penetration in Wales
continued to increase and stood at approximately 145,000
connections, which equates to approximately 10% of households and
businesses in Wales (i.e. 5% of total cable broadband connections
in the UK).
|
|
UK
|
Wales
|
|
|
Number of
cable lines
|
Cable broadband
connections
|
Percent of
households
|
Percent of population
|
|
Dec 04
|
|
110,000
|
7.8%
|
3.7%
|
|
Mar 05
|
2.1m1
|
105,000
|
7.5%
|
3.5%
|
|
Jun 05
|
2.3m1
|
115,000
|
8.2%
|
3.8%
|
|
Sep 05
|
|
125,000
|
8.9%
|
4.2%
|
|
Dec 05
|
|
130,000
|
9.3%
|
4.3%
|
|
Mar 06
|
2.8m3
|
140,000
|
10.0%
|
4.7%
|
|
Jun 06
|
2.9m3
|
145,000
|
10.4%
|
4.8%
|
Table 8 – Cable broadband
penetration in Wales, Q4 2004-Q2 2006, BBWO
The Broadband Wales Residents Survey reported that in July
2006, 28% of all respondents who had a broadband connection were
using cable. This suggests that cable penetration may be slightly
higher than anticipated and that around 12% of households and
businesses in Wales were using cable for broadband access.
According to Ofcom there were 11.1 million broadband
connections in UK households and small businesses by the end of
March 2006. Over 40 per cent of all UK homes now subscribe to
broadband services.
Figure 11 - Subscriptions for
dial-up and broadband internet connections, Q2 2006,
ONS
Broadband connections continue to account for an increasing
proportion of internet subscriptions in the UK. Figures from the
Office of National Statistics (ONS) indicate that broadband
connections now account for almost three-quarters of all internet
connections. Figures supplied by ONS are subject to regular review
and revision to optimise accuracy, and hence do not correlate
exactly to those shown in previous benchmark reports.
Dial-up connections remain popular with some households due to
the availability of time-based 'pay-as-you-go' services that charge
by the amount of time spent online and have no monthly fee. These
services are particularly suitable for those who use the internet
irregularly or for those who are 'light' users of the internet and
are also suitable for low-income households that are unwilling to
pay a flat monthly fee. This barrier to broadband has been overcome
in some European markets by the introduction of time-based
broadband services that have a low monthly fee or none at all.
Currently, the only time-based fixed-line broadband service in the
UK is being offered by Bulldog, who have limited coverage of the
UK, and particularly in Wales. As such, a nationally available
time-based broadband service may be required to persuade the
remaining dial-up users to switch to broadband.
Figure 12 – UK broadband take-up by
percentage of households, Point Topic, August
2006
Research from Point Topic has uncovered Swindon as having the
highest penetration of broadband by households out of all UK towns
and cities, at an estimated 51.1%. Swindon's relatively high
proportion of young families with children and the fact that it is
well covered by a cable network as well as by DSL were reasons
given for the high penetration levels. Total broadband take-up was
shown to be much higher in areas where the two networks are
competing, emphasising the importance of infrastructure competition
in driving penetration.
Contrastingly, there were more than 50 Local Authority
districts where less than one in four households had a broadband
connection. Most of these districts were in rural areas in Northern
Ireland, Scotland and Wales, but they include some urban areas,
including Merthyr Tydfil. These areas suffer from the opposite
factors to Swindon, such as the lack of a cable offering in Merthyr
Tydfil.
BT had 8.7 million wholesale broadband connections at the end
of June 2006 including 580,000 local loop unbundled lines, an
increase of 2.9 million connections year on year and 535,000
connections in the quarter.
|
|
Residential
|
|
Total
|
|
|
Lines
|
Penetration
|
Lines
|
Penetration
|
Lines
|
|
Urban
|
4,530,738
|
28%
|
737,663
|
91%
|
5,268,401
|
|
Suburban
|
986,657
|
20%
|
194,743
|
80%
|
1,180,401
|
|
Rural
|
558,706
|
13%
|
176,493
|
55%
|
735,198
|
Table 9 – ADSL connections and
penetration of potential total within the residential and business
sectors in the UK, Q4 205, Ovum UK Broadband Status Report, March
2006
Cable Broadband
NTL reported in August 2006 that it had 2.9 million broadband
subscribers at the end of June 2006, making it the largest retail
player in the UK broadband market.
|
|
Residential
|
|
Total
|
|
|
Lines
|
Penetration
|
Lines
|
Penetration
|
Lines
|
|
Urban
|
2,216,495
|
14%
|
43,421
|
5%
|
2,259,916
|
|
Suburban
|
305,928
|
6%
|
7,706
|
3%
|
313,634
|
|
Rural
|
55,956
|
1%
|
794
|
0.2%
|
56,750
|
Table 10 – Cable modem subscribers and penetration
within the residential and business sectors in the UK, Q4 2005,
Ovum UK Broadband Status Report, March 2006
Satellite and Wireless Broadband
There were no reported changes in wireless and satellite
broadband take-up over the quarter in the UK, with wireless
subscriber numbers remaining at an estimated 8,000 and satellite
subscriber numbers remaining at an estimated 3,000.
Incumbent Share of Wholesale Market
Figure 13 - UK broadband service
providers market share Q2 2006, Analysys Consulting
Limited
BT Wholesale's share of the total UK broadband market fell
slightly over the first half of 2006 and now stands at just under
70% of the total wholesale market. The market share of cable
broadband has also continued to fall over the last half-year. NTL
and Telewest accounted for 26.4% of the broadband market at the end
of 2005. However, the share of the newly combined NTL/Telewest
group has dropped to 25.0% at the end of June 2006.
Figure 14 - Incumbent share of the
wholesale broadband market in Western European countries, 2004 -
2006, Analysys Consulting Limited
BT's share of the wholesale market remains relatively high
when compared to other Western European incumbents. However, the
incumbent's share of the DSL wholesale market fell from 97% to 9%
over the first half of 2006. While this may seem like a fairly
small dent in its dominance of the DSL market, this fall clearly
signifies that LLU operators are beginning to increase their market
share and as LLU operators expand their network coverage, this
trend is likely to continue into the foreseeable future.
Figure 15 - Change in UK broadband
market share, 2001-2006, Analysys Consulting
Limited
LLU operators are showing an increasing share of the market
over the last year, mainly at the expense of the cable sector.
Despite losing DSL market share to LLU operators over recent
months, BT Wholesale's share of the total broadband market has
remained relatively steady due to the erosion of the market share
within the cable sector.
Incumbent Share of Retail Market
Figure 16 - Retail share of major
UK ISPs Q2 2006, Analysys Consulting Limited
The merging of NTL and Telewest has created the largest retail
broadband operator in the UK with a 27% share of the retail market,
overtaking BT which had a 24% share at the end of June 2006. As
well as having a new leading operator there are also a number of
smaller operators who have increased their shares and become
significant operators in the retail market, including Tiscali,
Pipex and The Carphone Warehouse.
With so many significant players, the UK retail broadband
market is one of the most competitive within Western Europe and, as
such, the incumbent has one of the lowest retail shares of all
Western European incumbents. As LLU operators increase their
network footprints it is expected that the highly competitive
retail market will translate into an increasingly competitive
wholesale market.
Figure 17 - Incumbent retail share
of total broadband market, 2004-2006, Analysys Consulting
Limited
Figure 18 - World broadband
penetration of households, Point Topic, Q1 2006
According to analyst firm Point Topic, the worldwide total of
broadband connections grew to 229 million lines during Q1 2006,
representing an increase of 36% from 168.5 million lines in Q1
2005.
Figure 19 – Broadband penetration
by percentage of households and small and medium business sites,
Analysys Consulting Limited and BBWO, June 2006
As shown in figure 20, the UK has moved ahead of the United
States for broadband penetration by households and is well
positioned when compared to the listed countries. South Korea leads
the listed countries by a fair margin with a penetration rate of
almost 70%.
LLU
Figure 20 - LLU shares of European
DSL markets, ECTA Broadband Scorecard, Q1 2006
According to ECTA, the UK has seen considerable growth in the
LLU share of the DSL market, rising from a 2.7% share at the end of
2005 to a 4.4% share at the end of Q1 2006. Despite this
significant increase, the UK continues to have one of the lowest
LLU shares in Europe, far behind leading LLU nations such as
France, The Netherlands and Sweden. However, growth in LLU shares
in these leading nations has stalled which will allow the UK to
narrow the gap between itself and these nations.
The slowdown of growth in the LLU share of the DSL market in
advanced broadband nations suggests that there may be equilibrium
at around 25-30%. However, this is likely to vary greatly between
individual markets due to the varying strength of incumbent
operators and alternative operators in each market.
Broadband Usage
In Q1 2006 Ofcom undertook a survey to determine the
difference between the use of online applications by dial-up and
broadband users. Whilst the survey shows higher usage for broadband
users in all areas, the most significant differences were seen for
downloading files and information, and online gaming, where usage
was considerably greater for broadband users.
Figure 21 - Applications used by
dial-up and broadband users, Ofcom research, Q1
2006
According to a study by government website Directgov,
published in February 2006, over half of the respondents considered
online banking sites to be the most valued type of web site,
followed by shopping (50%) and holidays (47%). News web sites were
considered to be the most valuable feature of the internet by 37%
of respondents. The same study found that despite the vast array of
web sites available, more than half of the UK's internet users
visit six or less websites on a regular basis.
The Office of National Statistics also carried out a survey to
determine the most popular activities on the internet, highlighting
the differences in usage between men and women. The most popular
activity was found to be searching for information and services
(84%), and was carried out by more men (88%) than women (79%).
Email was women's most popular activity (80%) and men's second most
popular (81%). Of the activities surveyed, in only two cases were
women's usages higher than men's. These were seeking information
related to health, and activities related to a school, college or
university course.
Figure 22 - Internet activities of
UK internet users, ONS, Q1 2006
Online
Shopping
A survey commissioned by the Welsh Consumer Council in March
2006 shows that nearly 3 in 10 (28%) adults aged 16 and over had
shopped online during the last 12 months. As a proportion of those
who use the internet, this equates to around 3 in 5 (60%) people.
Respondents indicated that convenience (78%); value for money
(46%); and the ability to shop around (30%) were factors that made
online shopping an attractive proposition. The figure below shows
the types of products consumers in Wales are purchasing online.
Music CDs, tapes, records and DVDs (42%) are the most common
purchases, followed closely by books (40%).
Figure 23 - Online purchases by
adult internet users in Wales, Welsh Consumer Council, March
2006
A National Statistics survey carried out in Q1 2006 showed
that 44% of adults in the UK had purchased goods or services over
the internet during the previous 12 months, with 79% of these
making purchases within the last three months. Of these, a higher
percentage of men (81%) than women (77%) had made online purchases.
Of those who made online purchases in the last 12 months, the most
popular purchases were films and music (53%) followed closely by
travel or holiday accommodation (51%).
Figure 24 - Online purchases by
adult internet users in the UK, ONS, Q1 2006
Whilst the differences between the surveys conducted for Wales
and the UK as a whole mean that it is difficult to make any direct
comparisons, it is at least possible to draw some broad
comparisons. In general, we see that UK users make more online
purchases than users in Wales. Users in Wales purchase
significantly more electronic goods online (35%) than users in the
UK (25%). Somewhat surprisingly, significantly more UK users (53%)
than Welsh users (42%) purchased films and music online.
Online security threats and identity fraud are deterring some
internet users from shopping online. A March 2006 survey by
the Welsh Consumer Council discovered that whilst there is growing
confidence among those who shop online, perceptions of online
security have deteriorated since the pervious year, with 41% of
internet users who do not shop online being concerned about
security, compared to 35% in March 2005.
Downloading
Data from the British Phonographic Institute (BPI) shows that
the number of legal downloads in the UK grew rapidly throughout
2005 and early 2006. In Q1 2006 11.5 million tracks weredownloaded
in the UK. This is attributable to the growth of legal download
sites and the reduction of copyright files available on file
sharing sites.
Figure 25 – Number of legal single track music
downloads in the UK, BPI/OCC, Q1 2006
Music downloads are likely to grow further due to the
increasing popularity of websites that offer massive libraries of
content that can be downloaded for little or no charge such as
YouTube. YouTube is a website that allows users to upload,
share and view video clips. Its library consists of content
produced by users as well as clips from TV and movies, and music
videos. In August 2006, YouTube announced that it is in talks with
record companies about offering current and archive music videos.
Within 18 months, it hopes to offer every music video ever created,
whilst remaining free of charge.
Social Networking and
Blogging
One of the fastest growing trends for internet usage over the
past year has been the rapid growth in the use of social networking
and blogging sites. Social networking sites such as MySpace, Bebo,
Friends Reunited and Piczo allow users to create their own home
pages or profiles, where they post information about themselves,
their hobbies and interests, favourite bands etc., along with links
to other websites they like, and online journals. Users can then
link their profiles to other users on the same site. These links
may be to existing friends, or to users with similar interests, to
build a network of friends/contacts. Users then use the site to
keep in touch with their contacts and share information and
content.
According to Nielsen/Netrating statistics, within the UK,
MySpace was the most popular social networking site in May 2006,
with 5.1 million unique users visiting the site (17.32% of internet
users). Other popular sites include Friends Reunited with 4.5
million unique users (15.48%), Bebo with 3.9 million (13.39%) and
Piczo with 3.7 million (12.48%).
According to consumer research undertaken by Ofcom in June
2006, sites which enable users to re-establish old acquaintances
and keep up existing contacts are the most popular type of social
networking sites with around 41% of adults in the UK with internet
access using them, around half doing so on a weekly basis. Sites
allowing users to keep in contact are particularly popular with
younger users, with 70% of 16-24 year olds doing so, and more than
half doing so at least once at week. Nearly half of all 25-30 year
old internet users, and around a third of those aged over 35 are
also using these sites.
Blogging sites are websites where users can create their own
home page, known as a weblog, or more commonly a blog, consisting
of chronological journal entries. Users post information
about their day-to-day life or particular topics of interest, which
are then available on the internet for other users to read. Google
owned Blogger.com is the largest blogging site with over 15 million
unique users in March 2006, followed by livejournal.com which
hosted over 200,000 active UK bloggers in 2006.
Ofcom research conducted in June 2006 showed that more than a
third (37%) of internet users in the UK aged 18-24 had contributed
to a website of blog. Overall, 14% of internet users aged 16 or
over claimed to have contributed to a website or blog by posting
content or a comment. The research also shows that approximately
twice as many men have websites or weblogs compared to women.
Most Visited
Sites
According to Nielsen-Netratings, in August 2006, websites
owned by Microsoft had the highest number of unique hits with over
20 million UK visitors. Google was the second most popular site
with almost 19.5 million visitors.
Figure 26 - Top 10 most visited UK
websites by unique visitors, Nielsen/NetRatings, August
2006
Future
Usage
During May 2006, the Broadband Stakeholder Group published a
report on the future bandwidth requirements of UK households. The
study concluded that future bandwidth demand will be dominated by
streaming video and large file transfers and that:
- by 2008, the bandwidth demand for the most bandwidth intensive
households could reach 18Mbps downstream and 3Mbps upstream;
- by 2012, the bandwidth demand for the most bandwidth intensive
households could reach 23Mbps downstream and 14Mbps upstream.
When considering the average local loop lengths of the UK and
the technical capabilities of current DSL technologies it is clear
that these technologies will not be able to meet the bandwidth
demand of UK households outlined above. This might suggest that
other technologies need to be considered for broadband delivery in
the future. However, other factors, such as advances in compression
technologies, may impact on bandwidth demand allowing DSL to remain
a viable broadband solution for longer than predicted.
Ofcom figures show that growth in broadband connections in UK
SMEs has followed the overall trend in broadband take-up. At the
end of 2005 84% of all SMEs in the UK had an internet connection
and 73% of these had a broadband connection. Ofcom predict that the
number of SMEs using dial-up to connect to the internet will
continue to fall over the next two years due to the falling costs
of broadband services and the increasing number of online business
applications that require broadband connectivity.
Figure 27 - SME internet access by
main connection method, Ofcom, December
2005[14]
Eurostat, the statistical office of the European Commission,
has tracked broadband and internet usage across the member states
of the EU. Broadband penetration amongst SMEs in the EU has
increased from 50% in 2004 to 62% in 2005. Take-up is particularly
high in Sweden where 80% of SMEs had broadband access in 2005, and
95% had some sort of internet access. Comparatively, in the UK, 61%
had broadband access and 88% had internet access.
VoIP
Voice over IP (VoIP) services allow users to make phone calls
over their broadband connection. Some services require a PC
with appropriate software, whilst others allow the user to connect
a normal telephone to their broadband connection. Apart from a
monthly subscription fee charged by some operators, calls to other
VoIP users who subscribe to the same service are free and
unlimited. Calls to land-line or mobile networks are usually
charged at low rates when compared to conventional telephone
services.
According to Ofcom estimates, by May 2006 there were more than
1.8 million active residential VoIP households in the UK. Of
these, approximately 300,000 were using BT's VoIP products, some
150,000 were using Orange/Wanadoo's service, and the remainder were
using services such as Skype, Vonage, PlusNet and VoIP Cheap.
During June 2006, Tiscali unveiled its new software based
NetPhone VoIP service. The service will be available on all of
Tiscali's broadband lines in the UK; approximately one million at
the end of June 2006. Other recently launched offerings include
Google Talk, Tesco VoIP and Dixons Freetalk.
Ofcom cautions however, that for VoIP to become truly
mass-market, some key issues are yet to be addressed. These include
regulation, regional development, reliability, integration with
other home systems, security and privacy issues, access to
emergency numbers and call quality.
Video on Demand
Video on demand was available to around 80% of NTL's
digital-TV subscribers at the end of June 2006. Over the last 12
months, over 10 millions films and TV programmes have been viewed
'on demand' by NTL customers.
The BBC Broadband website has a wide range of online catch-up
content allowing users to catch up on programming they have
missed.
MTV launched its Overdrive service in the UK in April 2006.
The service features music videos, news and movie trailers.
IPTV
BT is aiming to launch its next generation TV service, 'BT
Vision', in Autumn 2006. BT Vision combines digital
terrestrial TV (Freeview) with on-demand film, TV, music
programming, and interactive services provided via BT's DSL
network. The service will have no compulsory
subscription.
UK ISP Namesco launched its tvMax package in April 2006.
The service incorporates a set top box combing Freeview and Digital
Video Recording with a broadband connection to provide access to
tvMax services. These offer access to email, news and online
photo galleries via a TV. The service will evolve to provide
additional content (e.g. Video on Demand).
A potential barrier to the success of IPTV is that standard
TV-quality video requires a constant 3Mbps per channel, while HDTV
requires over 6Mbps, and the constraints of the local loop may
provide difficulties for its widespread roll-out, particularly in
the HDTV format. However, as DSL technologies and compression
technologies improve, the bandwidth requirements of streaming TV
will reduce and this may become less of an issue in the
future.
Mobile TV
There is increasing interest in supplying TV to users on the
go via mobile phone handsets. A number of technologies are
being examined including 3G, DAB and DVB-H.
A number of services are available for 3G customers, which
offer TV on compatible Nokia handsets. Orange TV offers
subscribers access to 19 channels. The service costs £10 per
month and offers 20 hours of viewing. MobiTV is available to
3 and Orange subscribers. For 3 customers, MobiTV offers 7
channels for £4.99 and its 'extra' package of 19 channels for
£9.99. For Orange subscribers, MobiTV offers access to all 19
channels, but uses data minutes, and consequently the cost is
dependent on consumption. It is recommended that users of
this service subscribe to a data bundle.
The BT Movio product developed by BT has gained attention from
a variety of operators including Virgin Mobile and RTE in Ireland,
who are both conducting trials. BT Movio utilises the DAB
network to broadcast content to compatible handsets. Initial
feedback has been positive with the majority of users in a pilot
study (over two thirds) indicating that they were ready to
subscribe to the service on their current network if the service
was priced competitively.
O2 also believe there is "clear consumer demand" for a service
that beams digital content direct to mobile phones. Trials
have been undertaken in Oxford using DVB-H, a mobile version of the
technology used for Freeview digital TV.
'Free' Broadband
A number of operators now offer what they term 'free internet'
to their subscribers. This is a value added service, which
although free, requires subscription to an appropriate package of
other services. Currently, Sky, Orange and Talk Talk offer
free internet to some or all of their subscribers. These
services require the subscriber to have a BT landline, so may not
be available to all. Both Orange and Talk Talk require an 18
month subscription, whilst Sky's minimum subscription period is 12
months.
Sky offers free internet to all of its subscribers. In
addition to the free basic internet package, Sky offers a number of
improved services that require a small payment to be
made. Orange offer free broadband to customers
with 18 month pay monthly mobile plans of £30 and above. They
offer an up to 8Mbps service with a usage restriction of 2GB per
month. Talk Talk offer free broadband if you subscribe to
their Talk3 calling plan at a cost of £8.99 per month (in addition
to £11 line rental). They offer an up to 8Mbps service with a
usage allowance of 40GB.
3G
T-Mobile will launch their HSPDA high speed download service
in August 2006. Initially, HSPDA technology will provide
download speeds of up to 1.8Mbps, though real-world performance of
around 1Mbps is more likely. The theoretical maximum will
rise to 3.6Mbps in 2007, then to 7.2Mbps and 10Mbps in
2008/2009. T-Mobile believes it can undercut UK broadband
operators as customers can retain a phone number without the need
to pay for fixed line rental. T-Mobile believes this will be
particularly attractive to the mobile only households in the
UK. 14% of households in Wales rely on mobile phones as the
households only method of telephony compared to 8% for the UK on
average.
The service will operate through T-Mobile's Web 'n' Walk
professional data tariff, at £17 per month, or £8.50 for users with
a T-Mobile mobile contract. Access requires a PC equipped
with a compatible data card which T-Mobile will supply free subject
to an 18 month contract. HSDPA enabled mobile phone handsets
are likely to be available early 2007.
Triple Play/Quad Play/Bundled Services
Currently, 37.1% of NTL's on-net customers subscribe to a
triple-play service. According to a recent study, more than
50% of European homes are set to get connected to a triple play
service by the end of the decade. In June, NTL announced the
UK's first Quad Play service combining TV, broadband, fixed line
and mobile phone services. NTL acquired Virgin Mobile in July
2006.
While bundled services to date have included fixed-line
telephony, it is possible to provide bundles that do not include
fixed-line telephony through the use of NDSL (naked DSL). NDSL
allows an end-user to access DSL broadband services without having
to take a telephony service, therefore eliminating the requirement
of paying the monthly line rental for a phone service. This could
allow operators to introduce new and differentiating bundles to the
market. For example, it would be possible to offer a mobile and
broadband package or a mobile, broadband and digital TV
triple-play.
This could have implications for the Welsh broadband market
due to the fact that there are high levels of mobile only
households in Wales compared to the UK as a whole (14% vs. 8%). The
high level of households without a phone line creates a barrier to
broadband take-up in Wales.
European countries where NDSL services are already available
include Sweden and The Netherlands.
It has been suggested that high levels of mobile only
households in Wales are the result of high levels of low income
families and that these families would be less likely to subscribe
to broadband services. However, the significantly higher digital TV
penetration in Wales compared to the UK as a whole shows that Welsh
inhabitants have a large appetite for new technologies. The ability
to receive NDSL broadband without the additional cost of monthly
line rental could therefore provide a new driver for broadband
growth within Wales, especially with new emerging applications such
as IPTV (another form of digital TV) being introduced.
Online Gaming
In a recent survey undertaken for the Deutschland Online 3
report, 41% of the European experts questioned responded that
online gaming would be an important driving force for the future
penetration of broadband Internet access. A study by the
research and consulting firm Parks Associates, indicates that the
US online game market will reach US$4.4 billion by 2010, up from
$1.1 billion in revenues last year.
DSL continues to increase its share of the worldwide market at
the expense of cable and alternative technologies. According to
Point Topic cable and other technology providers had a 34.5% market
share in Q1 2005 but this had fallen to 32.8% in Q1 2006.
Whilst DSL remains strong on a worldwide scale, there are
signs that it may begin losing market share in some of the more
advanced broadband nations. In South Korea DSL is being hit by the
near saturation of the market. DSL numbers have fallen by 4.6%
between Q1 2005 and Q1 2006 as end-users seek the greater bandwidth
offered by cable and fibre services. However, with South Korea
being the only country to have experienced this phenomenon as yet,
it remains likely that DSL will continue to be the technology of
choice on a worldwide scale for some time.
South Korea's experience does, however, provide an insight
into the development of markets in the future and will allow
operators and policy makers in other nations a valuable vision of
the possible future direction of their own market's
development.
Latest estimates indicate that broadband take-up levels are on
a par with those for the UK as a whole. Around 41.5% of Welsh
households had a broadband connection at the end of June 2006
compared with just over 40% for the UK as a whole. When considered
in terms of population these figures translate to 19.4 broadband
connections per 100 inhabitants in Wales and 19.3 connections per
100 inhabitants in the UK as a whole.
In terms of coverage, availability of basic broadband services
in Wales and the UK are amongst the highest in the world and are
gradually nearing 100% coverage. However, Wales currently suffers
from very low availability of higher-bandwidth 'second generation'
services. Only 33% of households could access a service delivering
8Mbps in March 2006, while no services offering higher bandwidths
were commercially available at that time. Careful consideration
must be given to this situation in order to ensure that Welsh
households are not disadvantaged by these network
limitations.
BT's 21CN deployment will make higher-bandwidth services
available in Wales, but these will not be available to the whole of
Wales until 2011 and the actual bandwidths achievable by individual
households will be dependent upon their individual local loop
lengths.
Furthermore, careful consideration must be given to the
increasing divide in infrastructure competition between urban and
rural areas and, to some degree, between Wales and the UK as a
whole. LLU operators continue to concentrate their resources upon
densely populated urban areas which is leading to a divide in the
available services in rural and urban areas and even to a
difference in the cost of services between these areas. It is also
apparent that enablement of exchanges by LLU operators is growing
at a faster rate for the UK as a whole than for Wales, where a
fairly limited number of exchanges are earmarked for unbundling and
an even more limited number already unbundled.
The increasing demand for higher-bandwidths and the low
availability of higher-bandwidth services are becoming increasingly
important issues in the broadband arena. Bandwidth demand has been
estimated to increase to levels beyond that which can be met by
current DSL technologies in the UK by 2012 or even as soon as 2008.
Furthermore, there is evidence that bandwidth demand has already
surpassed DSL capabilities in South Korea, where end-users are
substituting their DSL connections for higher-speed cable and fibre
solutions.
List of abbreviations
BBWO – Broadband Wales Observatory
OECD – Organisation for Economic Co-operation
and Development
DSL – Digital Subscriber Line
ADSL – Asynchronous Digital Subscriber
Line
Mbps – Megabits per second
ADSL2+ - Asynchronous Digital Subscriber Line
2+
LLU – Local Loop Unbundling
ISP – Internet Service Provider
SDSL – Synchronous Digital Subscriber
Line
FWA – Fixed Wireless Access
Wi-Fi – Wireless Fidelity
3G – Third generation mobile
communication
Ofcom – Office of Communications
SME – Small and Medium sized
Enterprises
IEEE – Institute of Electrical and
Electronics Engineers
G7 - Group of seven major industrialised
countries
PPP – Purchasing Power Parity
WAG – Welsh Assembly Government
EU – European Union
ONS – Office of National Statistics
ECTA – European Competitive
Telecommunications Association
OTA – Office of the Telecoms
Adjudicator
ARCEP – Autorité des Régulation des
Communications Electroniques et des Poste
ICT – Information Communication
Technology
PC – Personal Computer
PDA – Personal Digital Assistant
GSM – Global System for Mobile
communication
ISDN - Integrated Services Digital
Network
TV - Television
IPTV – Internet Protocol Television
VoD – Video on Demand
VoIP – Voice over Internet Protocol
HSDPA – High-speed downlink packet
access
NDSL – Naked Digital Subscriber Line
WiMax – Worldwide interoperability for
microwave access
FTTH – Fibre to the home
FTTP – Fibre to the premises
[1]
While there is no definite figure available for FWA coverage in
Wales, BBWO recognises that a limited number of niche providers do
offer services within Wales and, as such, BBWO does not concur with
this figure
[2]
Prices are converted from local currency to US$ using the exchange
rate from the same time as the PPP factors to ensure
consistency.
[3]
Based on approximately 1.4 million households and businesses in
Wales.
[4]
Based on Wales population of approximately 3 million.
[6]
Source: BT Wholesale press releases from April and July 2005.
[7]
Source: BBWO estimate derived from Ofcom/BT/industry analyst
figures. Assumptions: Wales population and hence penetration
approximately 5% of that for the rest of the UK
[12] Businesses may have more than 1 line
[13] Businesses may have more than 1 line
[14] Percentage of SMEs connected to the
internet