Broadband Bulletin Issue 13: November 2006
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A new brand, a name and a new logo have been unveiled by
NTL. Virgin Media will be launched in early 2007 and will
replace both the Telewest and NTL brands as the UK's main cable
operator providing broadband, television and telephone
services.
Virgin Mobile, with over 4 million mobile phone customers,
will continue as part of the Virgin Media group. Virgin
Mobile is the UK's largest mobile virtual network operator and uses
T-Mobile's network.
In Wales, NTL currently provide cable services in Cardiff,
Newport, Swansea and some surrounding areas. The cable
network has not been expanded for several years and there are no
immediate plans to do so.
NTL announced third quarter results on 8
November 2006. There are now 2,980,000 broadband customers on
the NTL and Telewest combined cable network and 242,800 off-net
subscribers using the virgin.net ADSL provider. This means
that NTL maintain a lead over BT with 3,222,800 broadband
customers.
NTL is planning an aggressive off-net marketing campaign using
virgin.net brand. This will enable NTL to expand its customer
base outside of its cable network by providing ADSL broadband to
users across the BT network or through local loop unbundling.
BT+NTL to offer Channel 4 VOD
BT have signed a deal with Channel 4 to offer some of its most
popular programmes on the BT Vision Video on Demand service.
BT Vision is due to be launched later this year and will also
offer access to on-demand movies through Channel 4's film
channel. Viewers will also be able to catch-up on popular
Channel 4 titles from the previous eight days broadcast schedule
using BT Vision's catch-up TV service.
NTL announced a deal which added Channel 4 content to its
Video on Demand service in October.
ADSL Barrier Broken Down
BT is working towards increased broadband coverage by tackling
a technical problem that has previously prevented customers from
having ADSL on their telephone lines.
In Kingswell, Scotland, around 650 homes and business receive
their telephone service through TPON, an optical fibre-based
technology which is incompatible with ADSL. For most of this
year, 10 Kingswells residents have been hooked up to broadband in a
BT Wholesale trial in which the technology is being delivered
through equipment in street cabinets, rather than direct from the
exchange. Along with a similar trial in Dorset, it's the
first time broadband has been delivered this way in the UK.
"Still can't get Broadband?"
There are 439 telephone exchanges in Wales, all have now been
ADSL enabled apart from Rhos and Llawhaden. All of the exchanges
enabled will be able to deliver ADSL Max services and be included
in any future national upgrade programmes such as ADSL 2. 33
were enabled under the Regional Innovative Broadband Support (RIBS)
programme.
If you already know you are in a broadband "not-spot" you can
assist us by registering you details on our Web site
In addition, you may want to ask your neighbours to see if
they are facing the same not-spot issues, and encourage them to
register their details onto the brokerage site, as the more
registrations that are collected in one area, the better the
business case and justification for doing the work.
Wales is the only country in the world that is addressing
not-spots at the same time as enabling its unviable
exchanges.
RIBS Update
The European Commission has received a complaint about the
Regional Innovative Broadband Support (RIBS) project. The Welsh
Assembly Government is working in partnership with BT to deliver
the RIBS project which has been designed specifically to enable
areas of Wales, described as broadband not-spots, to have access to
first-generation (512Kbps to 2Mbps downstream and 256Kbps to
512Kbps upstream) broadband services, at affordable prices
comparable with urban areas of Wales.
Whilst the European Commission is considering whether to
formally investigate the complaint, BT has decided that they will
temporarily suspend engineering works associated with the
enablement of broadband not-spots across Wales. BT will, however,
continue with identifying solutions and planning work for any
not-spots that are passed to them by the Welsh Assembly
Government.
Planning work consists of:
Obtaining relevant planning permission; liaising with the
Highways Agency; liaising with Local Authorities; ensuring manpower
availability; ordering equipment; liaising with manufacturers etc.
There is generally 6-8 weeks of planning to be done prior to
undertaking any large engineering works.
Engineering work will re-commence on enabling broadband
not-spots as soon as possible. In the meantime, the Welsh Assembly
Government will continue to gather information about customers who
are unable to receive a broadband service in order to pass this
information on to BT as soon as work is able to continue. If you
believe you should be able to receive broadband but are unable to
do so, please register on the Broadband Wales Observatory Brokerage
Web site:
www.bbwo.org.uk/not-spots
The allegations in the complaint are denied and the Welsh
Assembly Government is co-operating fully with the Commission to
bring this matter to a swift resolution.
Feature: Virgin v Sky
Following NTL's recent mergers with Telewest and Virgin
Mobile, the cable company made a bid for ITV which surprised much
of the industry. The bid was rejected and then we saw some
angry comments from entrepreneur Richard Branson about Rupert
Murdoch's media empire. What does it all mean? How
significant is this to the future of UK broadband? And is it all
over?
The Merging Virgin
The Virgin brand is famous throughout the world, where it is
used on trains, planes, shops and a range of services – including
mobile phones and broadband.
Many Virgin companies are run in partnership with companies
with vast industry experience. For example, broadband
provider Virgin.net was established in conjunction with NTL back in
1996. NTL took complete control of the company in 2004.
By merging with Telewest, NTL became the only major cable
provider in the UK, and also inherited some TV interests:
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NTL's existing TV channel
interests
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NTL owns Flextech which broadcasts Bravo, Living TV, Trouble,
Challenge and Ftn.
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NTL owns TV retailer Sit-up, which broadcasts four channels
including BidTV.
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UKTV is a partnership between BBC Worldwide and Flextech (part
of NTL) which broadcasts a number of channels including UKTV
Gold.
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The combined Telewest and NTL is now the largest broadband
provider in the UK with over 3.2million customers.
In 2005 NTL successfully bid for Virgin Mobile. The deal
made Virgin's creator, Richard Branson, the largest shareholder of
the combined company. The company will be re-branded as
Virgin Media early in 2007 and will be offering cable TV,
telephone, broadband Internet and mobile phone services all under
the one brand.
This has taken place with a backdrop of mergers between
telecoms and media companies around the UK.
The Sky Subscriber-base Advantage
British Sky Broadcasting (BSkyB) operates the UK's largest
digital pay television platform. Sky has over eight million
satellite television customers.
Sky is also a major broadcaster with sports, movies,
entertainment and news channels.
After Sky purchased Easynet, a broadband networking company,
the company has utilised its subscriber base to launch Sky
Broadband. So far over one million Sky customers have
expressed an interest and 109,000 lines are active. Sky Talk
also has 204,000 telecoms customers.
The Founder and Chairman of Sky is Rupert Murdoch.
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Subscribers
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Sky
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Virgin/NTL
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TV
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8,258,000
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3,315,400
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Broadband
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109,000
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3,222,800
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Telephone
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204,000
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4,221,100
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Mobile
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N/A
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4,511,700
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While Sky may be using its popular channels and large
subscriber base to promote its broadband and telephone services,
Virgin Media will be the only major competitor to Sky's dominance
of the Pay TV successor.
With both Sky and NTL owning a number of digital TV channels
it was probably only a matter of time before one of them made a
move for one of the larger commercial channels – ITV, Channel 4 or
Five.
Channel 4 is owned by the UK government and major European
media company, RTL, became Five's sole shareholder in 2005. This
leaves the most likely candidate for a merger as ITV - the largest
commercial TV broadcaster and the largest commercial TV producer in
the UK.
While
convergence has been rife throughout the telecoms and media sectors
(ITV PLC itself was formed in 2004 due to the merger of Granada and
Carlton) ITV has not launched any broadband or telecoms services,
although it has purchased popular Web site Friends Reunited.
Despite NTL's current TV interests, a merger with ITV would
have made them a much more significant broadcasting company and an
even larger threat to Sky due to cross-promotion
opportunities.
It would have also have brought about the possibility of ITV
being re-branded under the Virgin logo which is already used around
the world on trains, planes, shops and a range of services.
Timeline
9 November: NTL confirmed on its Web site
that it was in discussions with ITV "exploring a possible
combination transaction."
17 November: Press speculation about possible
bid for ITV from RTL: "RTL pointed to comments by the
company earlier this week that it was not in talks with ITV without
ruling out a future tie-up."
17 November: BSkyB Buys 17.9% of ITV: "This
acquisition of shares has taken place without the prior knowledge
of the ITV board of directors, but BSkyB has today communicated to
ITV's board its intention to be a supportive shareholder."
21 November: Ofcom release a statement: "If
Ofcom were to conclude that a change of control had taken place,
Ofcom would then need to review the effects - or likely effects -
of such a change of control on ITV's licensed services"
21 November: ITV's board announce it has
rejected an offer from NTL: "From ITV's perspective there is
little, if any, strategic logic for ITV to combine with NTL"
21 November: The Independent reports "Sir
Richard called on regulators to force Sky to reduce or dispose of
its near-18 per cent stake in ITV due to concerns that the
pay-television giant will have material influence over the
free-to-air broadcaster. Sir Richard accused BSkyB of
anti-competitive behaviour and raised concerns over the plurality
of ownership in the media sector."
EU and UK Consultations
Public
Media LiteracyTo cultivate and improve media literacy in the digital age,
the European Commission launches this EU-wide survey of best
practices, and will set out its findings and proposals in a
Communication in 2007. The questionnaire seeks the public's views
on media literacy and information about initiatives in commercial
communications, film and the online world.
Closes: 15 December 2006
Review of
the wholesale broadband access markets 2006/07Significant developments have taken place in the wholesale
broadband access markets since Ofcom concluded its previous review
in May 2004. Between May 2004 and October 2006, the total number of
broadband subscribers has increased from c.4 million to c.12
million.
At the same time, LLU has developed from a low volume niche
product to one that allows Communications Providers to bypass the
incumbent's wholesale offerings and to instead provide their own.
Increased competitive pressure, particularly from LLU, has resulted
in BT geographically de-averaging its wholesale broadband prices
and in providers offering retail prices and products that vary by
geography.
Ofcom has attempted to capture these developments in its
approach to reviewing the wholesale broadband access market and to
propose regulatory remedies that are appropriate to the prevailing
market conditions. This consultation document sets this approach
out in detail and Ofcom is keen to hear the views of all interested
parties.
Closes: 13 February 2007
Regulatory Round-up
The consumer experience of telecoms, Internet and
broadcasting services
More than half of all complaints received by Ofcom in Q2 2006
were related to "tag on line", a problem encountered by an
increasing amount of broadband subscribers.
This was one of the conclusions published in Ofcom's research
which evaluates the experience of UK consumers in telecoms,
broadcasting and Internet markets. Published alongside it is
a policy evaluation document which uses the data to assess the
impact of Ofcom's regulation and the priorities it has set
itself.
Other facts in the report include:
- Fixed-line, 2G mobile, digital television and broadband
Internet services are available to between 95%-100% of the UK
population, and 89% of people are able to receive at least one
digital radio multiplex through a DAB receiver.
- 61% of Internet users are concerned about issues such as
paedophiles online, Internet security and offensive content.
- Only 1 in 5 Internet users have ever switched provider, though
more than half have changed their tariff or package.
- A significant minority (between 18% and 34%) find it difficult
to compare providers by cost or by quality of service.
The policy evaluation document highlights the main concerns
identified in the research and explains recent regulatory
initiatives it has already undertaken to respond to each. However,
the document also unveiled new policy initiatives to deal with some
of the issues raised. These include:
- In light of limited 2G mobile coverage in some rural areas,
Ofcom will explore possible ways of ensuring that as many mobile
customers as possible are able to make 999/112 calls. It will also
consider how to remedy the lack of mobile coverage in some rural
areas more generally; and
- a new project on digital inclusion which will examine issues
associated with ensuring that all citizens are able to benefit from
new services, regardless of their geographic location or social and
economic profile.
Tag on line a customer tries to order
broadband, but is told by his chosen supplier that he cannot have
service because there is a "tag" or "marker" on the line – which
may mean that another supplier is already providing service on that
line. The customer may have recently moved home, or may have
recently ceased service with a different broadband provider – or
may have done neither of these things.
(Source: www.ofcom.org.uk)
New spectrum bands available for broadband fixed
wireless services
Ofcom increased the opportunities for broadband fixed wireless
services, by publishing provisions for opening the 71-76GHz and
81-86GHz bands for licensed use. At present these spectrum
bands are not in commercial use. However, technological
developments offers the possibility of new applications for these
higher frequency bands.
Unbundling
Update
OTA Update for October 2006
The Office of the Telecommunications Adjudicator announced on
8 November 2006 that the number of unbundled lines in the UK
exceeded 1 million. Back in July 2004 the LLU industry, OTA
and BT jointly set a target for 1 million unbundled lines by the
end of 2006.
The OTA stated: "I believe LLU has had a very significant
effect in driving the Broadband Marketplace forward for the benefit
of Consumers both in price and flexibility of product.
"There are still significant Operational challenges ahead for BT
& Openreach in conjunction with the LLUOs to complete the
industrialisation processes for LLU. However the plans are in place
and the commitment to deliver on the challenges has been reinforced
by the Openreach CEO Steve Robertson."
The Telecommunications Adjudicator aims to facilitate swift
implementation of the processes necessary to enable competitors to
gain access to BT's local loop on an equivalent basis to that
enjoyed by BT's own businesses.
UK Unbundling League
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Provider
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Enabled
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Source
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C&W
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626
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Sky
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548
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Carphone Warehouse
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370
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Tiscali
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250
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O2 (Be)
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304
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Orange
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218
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Homechoice
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145
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Pipex
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34
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Edge
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21
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Node4
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4
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Zen
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4
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Wales Unbundling League
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Provider
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Enabled
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Source
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C&W
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9
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Tiscali
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4
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Unbundling Targets and Pending
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Provider
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C&W
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Target: 800 by 30/09/2006
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Carphone Warehouse (Talk Talk)
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Pending: 1,045 (52 in Wales)
by 31/08/2006
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Orange
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Pending: 87 (12 in Wales)
by 30/09/2006
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O2 (Be)
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Pending: 804 (23 in Wales)
by 31/12/2007
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Pipex
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Target: 100 by 31/12/2006
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BT - new wholesale broadband pricing
BT has revealed how it plans to reduce its wholesale broadband
pricing once 1.5m lines have been unbundled. The indicative
prices are aimed at offering service providers a cost effective
alternative to Local Loop Unbundling (LLU).
Market Data Analysis
BSkyB announced first quarter results on 3
November. Sky has so far activated 74,000 broadband customers
and has another 35,000 through its UK Online brand. The
company also has 204,000 telephony customers through its Sky Talk
brand. Sky has over 8 million satellite television customers of
which 1 million have expressed an interest in receiving Sky
Broadband.
BT announced half year results on 30
September. BT now has 9.3 million broadband users on its
network including over 3 million retail broadband customers, 1
million LLU connections and wholesale lines. The overall
figure has grown by 626,000 during the last 3 months.
BT also made an offer for Sheffield-based PlusNet, which if
successful will bring another 200,000 broadband customers to the
incumbent.
Carphone Warehouse announced that 60,000 of
its 625,000 broadband customes are now on unbundled lines.
300 exchanges have been unbundled and 1,000 exchanges are due to be
unbundled by The Carphone Warehouse by May 2007. The Carphone
Warehouse has previously announced its intention to purchase AOL's
UK operation which will give The Carphone Warehouse the UK's third
biggest broadband subscriber base with approximately 2 million
users.
Kingston Communications will announce interim
results on 28 November and expects that its broadband subscriber
number will exceed 139,000. This includes users of Eclipse
Internet which is available across the UK.
Data sources:
Useful Links
Broadband Wales Programme
Visit the Broadband Wales Programme Web site for information
on the benefits that broadband can bring for you
www.wales.gov.uk/broadbandBroadband for Life
Other News and Events
RIBS "Not-spots" Registration Scheme
If you still can't get broadband after you have been informed
that your telephone exchange has been enabled, please register your
details at
www.bbwo.org.uk/not-spots
Details of when your exchange is due to be enabled can be
found at
The scheme is operated by BBWO on behalf of the Welsh Assembly
Government.
Please note every attempt is made to ensure figures published
in this newsletter are the most up to date and accurate figures
publicly available at time of going to press, however, exact
figures may vary.
Thank you for reading the
Broadband Bulletin from the Broadband Wales
Observatory (BBWO). This newsletter is published once a
month.
Researched by:
Edited by:
Rhys Gravell
Published by:
Broadband Wales
Observatory
eCommerce Innovation Centre
Cardiff University
Cardiff Business Technology Centre
Senghenydd Road
Cardiff CF24 4AY
Tel: 029 2064 7030
The Broadband Wales Observatory is managed by
the
eCommerce Innovation Centre
at Cardiff University on behalf of eWales at the Welsh
Assembly Government.