Broadband in
Wales: State of the Nation (June/July 2006) Report November
2006
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Purpose of this Document
The purpose of the Broadband in Wales State of the Nation
Report is to provide an overview of the broadband market in Wales
as it stands in June/July 2006.
The market will be analysed in terms of Availability,
Affordability and Adoption for different types of broadband
services across Wales and where possible comparisons made with the
rest of the UK and internationally. This will show the relative
coverage, pricing and take-up of broadband in Wales within a
national context.
The report will also look at the broadband Applications and
Drivers that are transforming the delivery and consumption of
broadband services by consumers and businesses and the Technology
Trends that are likely to impact the future. It will also look at
any barriers that may impede on further broadband growth in
Wales.
The structure of the report has been designed to enable
progress made in the provision of broadband services across Wales
to be clearly assessed when a report is published at the end of the
Broadband Wales Programme in March 2007.
The report is based on the research reports of the Broadband
Wales Observatory and the third party reports listed in the
references. No additional surveys or market research has been
undertaken specifically for this publication.
The Broadband Wales Observatory is integral to the five-year,
multi-million pound, Broadband Wales Programme that was launched by
the Welsh Assembly Government (WAG) in July 2002. For further
information, please visit:
www.bbwo.org.uk
.
The report was written by Rhodri Davies, Research Assistant,
with the support and contributions of Dr James B. Waddell,
Broadband Wales Observatory Project Manager and Dr Leigh Hodge,
eCIC Research Associate.
Executive Summary
The Broadband in Wales State of the Nation (June/July 2006)
Report provides an overview of the Availability,
Affordability and Adoption of broadband
services in Wales. Comparisons have been made to assess Wales'
standing with respect to other constituent countries and regions of
the UK, and other international countries. The report also includes
a review of the main Applications and Drivers for
broadband and the Technology Trends that are
likely to have an impact on the broadband market in the short to
medium term.
The Welsh Assembly Government has ensured that nearly all
telephone exchanges in Wales, 432 out of 434, are now enabled for
ADSL as part of the Broadband Wales Programme's RIBS project. The
remaining two exchanges are due to be enabled as part of the
project. The focus of the RIBS project then moves towards the
provision of broadband services in other 'not-spot' areas. With
only a small number of households still unable to receive a
broadband service, 'first generation' broadband availability in
Wales is nearing 100% coverage.
However, the situation is somewhat different in terms of
'second generation' broadband. Wales currently suffers from very
low availability of higher-bandwidth services with only 33% of
households able to access a service delivering 8Mbps. Services
offering even higher bandwidths have only recently been launched
and have very limited availability.
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. 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.
Wales is also suffering from low levels of infrastructure
competition compared to the UK as a whole. NTL's cable network
covers only 25% of households in Wales while LLU coverage is
considerably less in Wales than in some other areas of the UK.
However, LLU operators are beginning to invest in Wales although
this will likely be confined to the densely populated urban
areas.
The cheapest 'up to' 8Mbps services in the UK are offered via
LLU and are available to a limited number of households in Wales,
mainly in the cities. As such, the majority of Welsh households
have to pay around £2 per month more for their broadband service
than those in LLU areas. This is an indication of the effect on
prices of increased infrastructure competition and shows that those
living in areas where there are no LLU operators will continue to
pay more for their broadband service. The situation is different in
the business market where the costs of business broadband services
are generally consistent throughout the UK.
Around 43% of Welsh households now have a broadband connection
which is comparable to figures for the UK as a whole. When
considered in terms of population, these figures translate to
around 20 broadband connections per 100 inhabitants. This compares
well internationally and places Wales ahead of nations such as the
USA, France and Germany for take-up levels. Within Wales, the
highest levels of broadband penetration are in Newport, Cardiff and
the Vale of Glamorgan, while the lowest are in the Ceredigion,
Carmarthen and Blaenau Gwent areas.
In terms of trends, more operators are focusing on converged
services where companies are offering combinations of landline
telephony, mobile telephony, broadband and television in order to
provide a total service to their customers. This in turn has led to
a period of consolidation in the market with many smaller companies
being bought by larger companies.
There are significantly higher numbers of mobile-only
households in Wales than in the UK as a whole which can be a
barrier to broadband growth due to the lack of a telephone-line in
the home. This problem could potentially be overcome by the
introduction of NDSL which is a method of delivering broadband over
a telephone-line without the need to subscribe to a telephone
service, hence saving the cost of line-rental. This could also be
attractive to operators for packages that bundle broadband access
together with VoIP or mobile telephony.
The limitations of current DSL technologies have already
prompted some other countries into looking to alternative
technologies to provide their broadband needs. South Korea in
particular has seen strong evidence of substitution from DSL lines
to fibre based solutions. There is also evidence of European
countries beginning to look to fibre based solutions in the medium
term. This is an area that should be monitored closely to ensure
that Wales does not fall behind other broadband markets.
The Welsh broadband market is currently in a strong position
when compared to other UK nations and regions, and when compared to
many international nations. However, new developments in broadband
technologies and their use need to be continually monitored to
ensure that this situation remains the case.
Availability
All 434 exchanges in Wales have now been enabled for ADSL
except for the Rhos and Llawhaden exchanges which are due to be
enabled as part of the Broadband Wales Unit's RIBS scheme. These
two exchanges serve a total of 241 premises. As such, DSL coverage
in Wales is now near 100% with almost all premises 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 enabled exchange areas are not suitable for
delivery of broadband services, or can only access services at very
low speeds. These sites are known as 'not-spots'.
Figure 1 - Estimated coverage of
households by minimum downstream speed, Analysys Consulting
Limited, Q1 2006
According to Analysys Consulting Limited, 98% of Welsh
households could receive a service with a minimum downstream speed
of 0.5Mbps in March 2006. Furthermore, 95% can receive a service
with a 1Mbps minimum downstream speed and 92% can receive a service
with a 2Mbps minimum downstream speed.
Rural Coverage
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.
|
|
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 1 – UK Household coverage by
mass-market broadband, by area type, Q4 2005, Ovum UK Broadband
Status Report, March 2006
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 current DSL
technologies.
RIBS enablement
programme
The rollout of the RIBS broadband exchange enablement is on
schedule and 17 exchanges were enabled ahead of schedule.
|
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 2 - Timetable for the
enablement of the RIBS exchanges, Broadband Wales Unit, September
2006
The enablement of the RIBS exchanges has had little impact on
the overall coverage of DSL in Wales. The increase was negligible
because these exchanges serve very small populations. However, the
RIBS programme has enabled DSL in rural areas which would otherwise
need to rely on other sources for their broadband requirements and,
as such, has reduced any 'digital divide' that exists between rural
and urban areas of Wales.
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
[1] for any
not-spots that are passed to them by the Welsh Assembly
Government.
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.
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.
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.
ADSL Max from RIBS
Exchanges
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+.
International Coverage
When compared internationally, the UK now has the most
extensive 'first generation' broadband coverage in the world. As
such, Wales also compares very favourably with the world's major
broadband nations.
Figure 2 - First generation
downstream broadband service coverage as a percentage of
households, Analysys Consulting Limited, Q1
2006
Most of the countries listed in Figure 2 had broadband
networks covering more than 90% of households with a broadband
service offering a minimum downstream speed of 0.5Mbps at the end
of March 2006. Australia (85%) and Ireland (80%) lagged somewhat
behind at that time. Coverage of 1Mbps and 2Mbps services are also
high and are generally just a few percentage points behind 0.5Mbps
coverage.
Upstream Coverage
Figure 3 - Estimated coverage of
households by minimum upstream speed, Analysys Consulting Limited,
Q1 2006
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.
SDSL Coverage
There have been no further SDSL rollouts. SDSL availability
has therefore remained static at around 25% of non-domestic
premises. This is likely to remain the case, as the business case
for SDSL rollout has been affected by the availability of ADSL
Max.
Cable Coverage
The cable network has not grown in Wales or the rest of the UK
for a number of years and is unlikely to do so in the foreseeable
future due to the expense and inconvenience of laying cable, i.e.
digging up roads. In the long-term NTL are more likely to utilise
LLU in order to increase their footprint as this would be a quicker
and more cost-effective process than developing the cable
network.
Wireless 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.
The Reynoldson Community Wireless Network is a community
wireless scheme utilising 2.4GHz FWA products to supply broadband
to about 40% of homes in the village of Reynoldston on the Gower
Peninsula.
Broadband Wales utilises tower sites provided by TFL Group to
facilitate FWA broadband and WiFi access. Supported sites include
Llawhaden, Rhos, Botanical Gardens of Wales, Swansea Airport and
areas of Pembrokeshire, Carmarthenshire and Ceridigion.
Gaia Technologies' 2.4GHz FWA network provides broadband to
Rhosybol, Amlwch, Colwyn Bay, Old Colwyn, Rhos on Sea, Bodedern,
Valley, Holyhead, Bethesda, Tregarth, Llanfairfechan, Rhiwlas,
Menai Bridge, Llandegfa, Llandudno, Penysarn, Bangor and Upper
Colwyn Bay. Their recently enabled 5.8GHz network covers a massive
geographical area, extending the reach of their products. Gaia
Technologies supplied wireless internet services for visitors and
exhibitors at the 2006 National Eisteddfod.
The Digital Vale Project (Deudraeth Cyf) aims to deliver
flat-rate, fast, always-on internet access to rural areas at an
affordable price. Developed in partnership with Gaia Technologies
Ltd, the project is initially targeting approx 1,500 homes in the
Blaenau Ffestiniog, Maentwrog, Penrhyndeudraeth, Talsarnau, Harlech
and Porthmadog areas.
A small FWA network is operated in Lawrenny,
Pembrokeshire. At this point, no further details are
available.
WiFi Hotspots
|
|
Wales
|
England
|
Scotland
|
Northern Ireland
|
UK
|
|
BT Openzone
|
99
|
1328
|
138
|
130
|
1695
|
|
Orange
|
3
|
73
|
4
|
0
|
80
|
|
The Cloud
|
410
|
5737
|
315
|
0
|
6462
|
|
T-Mobile
|
40
|
932
|
77
|
7
|
1056
|
|
Total
|
552
|
8070
|
534
|
137
|
9293
|
Table 3 - WiFi hotspots in the UK, BBWO, July
2006
In July 2006 there were 552 WiFi hotspots operated by BT
Openzone and its partner providers in Wales out of a total of 9,293
in the UK. BT Openzone and its partner networks operate 95% of all
UK hotspots.
3G
3G data services can provide a variety of download speeds to
end-users from 153kbps up to 2Mbps. 3G network coverage in Wales is
inferior to the UK as a whole. According to Ofcom, 75.9% of postal
districts with at least 25% area coverage in Wales were covered by
at least one operator compared to 90.5% for the UK as a whole in
2005. Furthermore, only 10.1% of postal districts with at least 25%
area coverage in Wales were covered by 4 or more operators compared
to 46.2% for the UK as a whole.
Figure 4 – 3G mobile phone coverage
in Wales by number of operators (postal districts with at least 25%
area coverage), Ofcom operator data, Q3-Q4 2005
As yet, Wales specific figures are unavailable for 2006.
However, from available operator coverage maps it is plain to see
that 3G coverage is far from comprehensive in Wales. Roll-out plans
are not readily available but are likely to be focused around the
most populated areas. As such, 3G networks are not considered to be
an immediate solution for broadband not-spots.
Satellite Coverage
Broadband via satellite is available to more than 99% of
premises within Wales.
In terms of higher-bandwidth 'second generation' broadband
services, coverage in Wales is markedly lower than in some of the
other regions of the UK. While coverage of services offering a
minimum downstream speed of 4Mbps is comparable with most other
areas, the difference in coverage at higher speeds increases
considerably. Services with a minimum downstream speed of 4Mbps are
available to 81% of Welsh households, compared to 86% of UK
households. Services of 8Mbps and above are available to 33% of
Welsh households, compared to 53% of UK households.
Figure 5 - Second generation
downstream broadband service coverage in UK regions as a percentage
of households, Analysys Consulting Limited, Q1
2006
With regards to services offering downstream speeds of 16Mbps
or greater, there were no such services available in Wales during
March 2006, making Wales one of two regions, along with Northern
Ireland, where these services were not available at all. This
situation has changed since, with the introduction of an ADSL2+
service from Bulldog. However, this service is only available in a
very limited number of exchange areas and due to line lengths and
technological limitations only a relatively small number of
households will actually be able to receive a service with a
minimum downstream speed of 16Mbps. Coverage of these services are
likely to increase with the continued ADSL2+ rollouts of LLU
operators and BT ADSL2+ rollout as part of the 21CN deployment but
it is unlikely that coverage levels of such services will be high
using this technology for some years.
Figure 6 - Second generation
downstream broadband services in major broadband nations as a
percentage of households, Analysys Consulting Limited, Q1
2006
Whilst the UK has one of the most extensive 'first generation'
broadband networks in the world, the same cannot be said with
regards to 'second generation' broadband. Coverage of services
offering a minimum downstream rate of 4Mbps compares very
favourably with other major broadband nations and coverage of 8Mbps
services compares averagely. However, when considering coverage of
services of higher-bandwidths it is clear that the UK trails far
behind some of the world's leading broadband nations.
Services with minimum downstream speeds of 32Mbps are
available to more than 40% of households in South Korea, Canada and
Sweden with coverage reaching as high as 80% in Japan. Meanwhile,
there are no comparable services at all in the UK.
Furthermore, even within some of the lesser broadband nations,
such as Ireland, coverage of 16Mbps and 24Mbps services are better
than in the UK. As such, if the UK is to maintain the lead it has
acquired through its extensive 'first generation' broadband
coverage, priority must be given to the deployment of
higher-bandwidth services in the near future.
There were thirteen exchanges within Wales that had been
unbundled by LLU operators up to June 2006. Bulldog remains as the
biggest LLU operator within Wales having unbundled 9 exchanges
within the Cardiff and Wrexham areas in May 2005, while Tiscali
became the second LLU operator to enter the market in Wales after
it unbundled 4 exchanges in Bangor, Bridgend, Cwmbran and Llanelli
during March 2006.
BBWO estimate that around 16.5% of all Welsh households and
around 17.3% of non-domestic premises were able to receive their
broadband services from LLU operators in July 2006.
|
|
LLU Coverage
|
|
Country
|
Domestic
|
Non-domestic
|
|
Wales
|
17%
|
17%
|
|
England
|
58%
|
56%
|
|
Scotland
|
33%
|
31%
|
|
Northern Ireland
|
0%
|
0%
|
|
UK
|
52%
|
51%
|
Table 4 – LLU coverage of domestic and
non-domestic premises, BBWO, July 2006
The availability of LLU services in Wales will increase over
the next year following announcements by LLU operators that they
are to extend their networks into Wales:
- The Carphone Warehouse was due to unbundle 30 exchanges by the
end of August 2006. (However, the status of these exchanges and
their current forecasted enablement dates are unknown);
- Be Un Limited are due to unbundle 21 exchanges between March
and December 2007;
- Orange (previously Wanadoo) are due to unbundle 12 exchanges by
the end of September 2006.
Following these planned rollouts, it is estimated that LLU
coverage in Wales will increase to 39% of domestic premises and 35%
of non-domestic premises.
The UK figures for LLU coverage do not represent the full
extent of LLU activity as they do not take into account the
duplication of LLU presence in the most viable exchanges, i.e.
there are a number of LLU operators located in the same exchange.
This situation does not yet exist in Wales with the main LLU
operators concentrating on separate markets. LLU operators in Wales
have until now concentrated on the most profitable exchanges and
are not competing with each other for the same customers. However,
following the aforementioned rollouts, there will be a number of
highly-ranked exchanges with two or more LLU operators offering
services which will result in a highly competitive environment in
these areas.
Affordability
With regards to affordability, London and the South East of
England tend to have the highest levels of availability and
competition, and consequently lower prices overall. Within
Wales, population density affects availability so costs may be
lower for some service speeds in cities. In some cases, not
all service speeds are available outside Welsh cities.
|
|
Index value Q4 2005
|
G7 Rank Q4 2005
|
Index value
Q3 2005
|
G7 Rank
Q3 2005
|
Index Value Q1 2005
|
G7 Rank
Q1 2005
|
|
Japan
|
0.97
|
1
|
0.98
|
1
|
0.98
|
1
|
|
France
|
0.86
|
2
|
0.85
|
2
|
0.94
|
2
|
|
Canada
|
0.79
|
3
|
0.80
|
3
|
0.77
|
3
|
|
UK
|
0.77
|
4
|
0.76
|
4
|
0.72
|
4
|
|
Ireland
|
0.75
|
|
0.75
|
|
0.67
|
|
|
Italy
|
0.71
|
5
|
0.70
|
5
|
0.5
|
6
|
|
Australia
|
0.69
|
|
0.69
|
|
0.63
|
|
|
Sweden
|
0.64
|
|
0.65
|
|
0.63
|
|
|
US
|
0.63
|
6
|
0.62
|
6
|
0.62
|
5
|
|
South Korea
|
0.53
|
|
0.54
|
|
0.53
|
|
|
Germany
|
0.44
|
7
|
0.46
|
7
|
0.41
|
7
|
Table 5 – 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.
In many cases, costs are the same for all of the locations
studied. Where prices differ, they are usually higher in Welsh
towns and villages.
|
Region
|
512kbps
|
1Mbps
|
2Mbps
|
3-4Mbps
|
8-10Mbps
|
Up to 24Mbps
|
|
London
|
£13.97
|
£9.99
|
£14.99
|
£22.99
|
£9.75
|
£14.00
|
|
South East
|
£13.97
|
£9.99
|
£14.99
|
£24.99
|
£9.75
|
£14.75
|
|
Welsh Cities
|
£13.97
|
£14.99
|
£14.99
|
£24.99
|
£9.75
|
£14.75
|
|
Welsh Towns
|
£13.97
|
£14.99
|
£14.99
|
-
|
£11.99
|
-
|
|
Welsh Villages
|
£13.97
|
£14.99
|
£14.99
|
-
|
£11.99
|
-
|
|
Difference between Highest and Lowest Price
|
£0.00
|
£5.00
|
£0.00
|
£2.00
|
£2.24
|
£0.75
|
Table 6 – Consumer minimum monthly
price at each speed in each location, BBWO, July
2006
The lowest cost broadband service available in the UK is an
8Mbps service which is provided by Bulldog and is only available to
the areas covered by the Bulldog LLU network. Some residents of
Welsh cities are able to access this service while the rest of
Wales has to pay about £2/month more for a similar service.
Regardless of this, the minimum consumer spend now buys up to 8Mbps
services in all areas. This is due to the rollout of ADSL Max
services through BT wholesale. The highest speed available in the
consumer market (i.e. 24Mbps) is not available in Wales, 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, this service is only available in nine exchanges
in Wales – in the Cardiff and Wrexham areas.
|
|
Minimum Cost
for Any
Broadband Service
|
Speed
Available
|
Highest Speed
Available
In Location
|
Lowest Cost At
This Speed
|
|
London
|
£9.75
|
8Mbps
|
24Mbps
|
£14.00
|
|
South East
|
£9.75
|
8Mbps
|
16Mbps
|
£14.75
|
|
Welsh Cities
|
£9.75
|
8Mbps
|
16Mbps
|
£14.75
|
|
Welsh Towns
|
£11.99
|
8Mbps
|
8Mbps
|
£11.99
|
|
Welsh Villages
|
£11.99
|
8Mbps
|
8Mbps
|
£11.99
|
Table 7 – Consumer minimum costs
and lowest cost maximum speed services in each location, BBWO, July
2006
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. Sky's
connect service is available to those customers that Sky's network
has not yet reached.
Orange offer free broadband to customers with pay monthly
mobile plans of £30 per month and above on an 18 month contract.
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. The Talk3 calling plan gives unlimited calls for
up to 3 hours per call to other Talk Talk customers and unlimited
calls of up to 70 minutes per call to local and national UK
landlines.
|
Operator
|
Exchange Type
|
Package
|
Minimum Monthly Spend
|
Download Speed
|
Usage Restriction
|
Activation Fee
|
Additional Monthly Fee
|
|
Orange
|
N/A
|
|
£30
|
Up to 8Mbps
|
2GB
|
Free
|
Free
|
|
Sky
|
LLU
|
Base
|
£15
|
Up to 2Mbps
|
2GB
|
£40
|
Free
|
|
Mid
|
£15
|
Up to 8Mbps
|
40GB
|
£20
|
£5
|
|
Max
|
£15
|
Up to 16Mbps
|
Unlimited
|
Free
|
£10
|
|
Non-LLU
|
Connect
|
£15
|
Up to 8Mbps
|
40GB
|
£40
|
£17
|
|
Talk Talk
|
LLU
|
Talk3
|
£19.99
|
Up to 8Mbps
|
40GB
|
Free
|
Free
|
|
Non-LLU
|
Talk3
|
-
|
Up to 8Mbps
|
40GB
|
Free
|
£9.99
|
Table 8 – Fee free broadband
services, BBWO, July 2006
Fee free broadband offers are difficult to compare due to the
varying services offered in different packages. However, based on
the information in Table 8, it is considered that:
- Orange and Sky in particular are likely to be appeal to people
who already use their services.
- Users of both Orange and Sky may be more likely to take up the
Orange offer provided they don't have high usage requirements.
- Users on non-LLU exchanges may have to pay additional
charges.
In this section, we consider the costs of business specific
services such as SDSL and business specific ADSL services with
published contention ratios. Where prices differ between the
studied locations, they are usually higher in Wales due to lack of
LLU provision.
|
Region
|
512kbps
|
1Mbps
|
2Mbps
|
3-4Mbps
|
8-10Mbps
|
Up to 24Mbps
|
|
London
|
£15.99
|
£9.99
|
£14.99
|
£49.00
|
£13.61
|
£45.00
|
|
South East
|
£15.99
|
£9.99
|
£14.99
|
£49.00
|
£13.61
|
£45.00
|
|
Welsh Cities
|
£15.99
|
£19.99
|
£24.95
|
£49.00
|
£13.61
|
£45.00
|
|
Welsh Towns
|
£15.99
|
£19.99
|
£24.95
|
£49.00
|
£13.61
|
-
|
|
Welsh Villages
|
£15.99
|
£19.99
|
£24.95
|
£49.00
|
£13.61
|
-
|
|
Difference between Highest and Lowest
Price
|
£0.00
|
£10.00
|
£9.96
|
£0.00
|
£0.00
|
£0.00
|
Table 9 – Business Minimum Monthly
Price at Each Speed in Each Location, BBWO, July
2006
The cheapest business broadband service available costs £9.99
per month and is not available in Wales due to lack of LLU
provision. A superior 8Mbps service is available in Wales (and all
other areas) for less than £4 per month more. Furthermore, 24Mbps
business services are not available outside London. The highest
speed service available in Wales is a 16Mbps service offered by
Bulldog. However, this service is not available outside Welsh
cities. Due to lack of LLU provision, businesses in Wales that are
not located in cities must be content with an 8Mbps service costing
£13.61 per month.
|
|
Minimum Cost
for Any Broadband
Service
|
Speed Available
|
Highest Speed Available in
Location
|
Lowest Cost At This
Speed
|
|
London
|
£9.99
|
1Mbps
|
24Mbps
|
£75.00
|
|
South East
|
£9.99
|
1Mbps
|
16Mbps
|
£45.00
|
|
Welsh Cities
|
£13.61
|
8Mbps
|
16Mbps
|
£45.00
|
|
Welsh Towns
|
£13.61
|
8Mbps
|
8Mbps
|
£13.61
|
|
Welsh Villages
|
£13.61
|
8Mbps
|
8Mbps
|
£13.61
|
Table 10 – Business minimum monthly
costs and lowest cost maximum speed services in each location,
BBWO, July 2006
SDSL differs from ADSL in that it has the same uplink and
downlink bandwidth (symmetrical), where as ADSL has lower upstream
bandwidth (asymmetrical). The high cost of SDSL products reflects
the superior service offered by symmetrical bandwidth, low
contention rates and no usage limitations. SDSL is available in
London, the South East, Welsh cities and some Welsh
towns.
Average monthly prices for SDSL are the same across all
regions where there is availability.
|
Location
|
512kbps
|
1Mbps
|
2Mbps
|
|
London
|
£178.72
|
£223.40
|
£278.72
|
|
South East
|
£178.72
|
£223.40
|
£278.72
|
|
Welsh Cities
|
£178.72
|
£223.40
|
£278.72
|
|
Welsh Towns
|
£178.72
|
£223.40
|
£278.72
|
|
Welsh Villages
|
N/A
|
N/A
|
N/A
|
|
Difference between Highest and Lowest Price
|
£0
|
£0
|
£0
|
Table 11 – Average monthly price
for SDSL at each speed in each location, BBWO, July
2006
Broadband Penetration
Research by ORC showed that broadband penetration in Wales had
reached 43% of all households in Wales in July 2006. This
represents an increase from 39% at the end of 2005, indicating that
growth of new connections remains strong in Wales. Furthermore,
this equates to around 20.1 broadband connections per 100
inhabitants in Wales.
Figure 7 - Broadband penetration by
households across LAs in Wales, ORC, July 2006
Within Wales, the Local Authority with the highest penetration
of broadband is Newport, where 51% of households have a broadband
connection. Cardiff and the Vale of Glamorgan follow closely behind
(50% of households having a broadband connection), while the lowest
broadband penetration levels in Wales are in Blaenau Gwent, where
only 34% of households have broadband.
xDSL Broadband
The ORC research shows that around 30% of households in Wales
had an ADSL broadband connection at the end of July 2006. This
represents an increase from 28% at the end of 2005.
Cable broadband
The ORC research shows that around 12% of households in Wales
had a cable broadband connection at the end of July 2006. This
represents an increase from 9% at the end of 2005.
LLU
There are no specific figures for the number of LLU lines in
use in Wales. However, since the availability of these services is
lower in Wales than in the UK as a whole, it is expected that
take-up of LLU services is also somewhat lower.
Figure 8 - Number of unbundled
lines in the UK, OTA, October 2006
According to the OTA (Office of the Telecoms Adjudicator), the
UK surpassed 1million LLU lines in early November 2006 and, in
doing so, the OTA achieved its primary target of delivering a
million unbundled lines by the end of 2006.
Broadband vs. Dial-up
More than seven in ten internet households in Wales were using
broadband connections in July 2006. Similarly, according to the
ONS, for the UK as a whole a little under 73% of internet
connections were broadband services in June 2006.
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, 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.
Penetration of higher-bandwidth services
A key characteristic of the broadband market in Wales during
2006 has been the increased availability and take-up of
higher-speed broadband services. Services offering 'up to 8Mbps'
are widely available over ADSL, while services offering 'up to
10Mbps' are available in certain areas through cable. Of the people
surveyed in the ORC's Resident Report Wave 4 who knew the speed of
their broadband connection, more than two in ten reported to have a
service that was faster than 2Mbps.
International broadband penetration
Figure 9 - Broadband penetration by
households, Analysys Consulting Limited & ORC, June
2006
[3]
Broadband penetration figures for Wales are in line with those
for the UK as a whole. As such, take-up of broadband in Wales
compares relatively well when compared to other nations.
Figure 10 – Broadband connections
per 100 inhabitants by access technology, OECD, June
2006
[4]
The UK placed 10th out of the thirty OECD nations
for broadband penetration in June 2006, with 19.5 broadband
connections per 100 inhabitants. This figure was well ahead of the
OECD average, which stood at 15.5 connections per 100 inhabitants
at that time.
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. There were no Wales
specific figures available at that time, however, the 'Ofcom SME
Tracking Study', which was based on rolling data over nine months
from January to September 2005, reported that 83% of Welsh SMEs had
an internet connection (79% in the UK) and that 42% of those were
using broadband (68% in the UK)
[5].
Figure 11 - SME internet access by
main connection method, Ofcom, December 2005
[6]
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.
Applications and Drivers
Figure 12 - PC, internet and
broadband penetration in the EU, European Commission and ORC,
December 2005 - January 2006
[7]
There is a clear general trend between basic ICT penetration
and broadband penetration. The 'E-communications household survey',
conducted on behalf of the European Commission, reported that the
lack of PCs is an obstacle to internet access and thus also
broadband penetration.
Figure 13 - Access devices used by
consumers who have used the internet in Wales over the last 12
months, ORC, July 2006
As shown in Figure 13, the PC is still very much the favoured
internet access device in Wales with 97% of those surveyed by the
ORC who had used the internet over the 12 months leading to July
2006 stating that they had used a PC. As such, it may be the case
that growth of PC penetration may need to be stimulated in order to
maintain growth of broadband. However, increased use of mobile
phone networks to access the internet indicates that the
availability of internet access on mobile devices may be a driver
of internet use in the future.
Growth in internet access via video games consoles and through
TV sets also indicate that in the future PCs may become less
dominant as an access device and that a variety of devices in the
home and on the move will be used for internet access.
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, roughly
150,000 were using Orange/Wanadoo's service, and the remainder were
using services such as Skype, Vonage, PlusNet and VoIP Cheap.
According to Point Topic, there were just under 24 million fee
paying VoIP users worldwide by the end of 2005.
Video on demand (VoD) 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. Other VoD providers include BT, BSkyB
and MTV.
BT is aiming to launch its next generation TV service, 'BT
Vision', in autumn 2006. This combines digital terrestrial TV (via
Freeview), with on-demand programming and interactive services
provided via BT's DSL network. The service will have no compulsory
subscription.
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 subscription
services are available for Orange and Three 3G customers which
offer TV on compatible handsets. 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. O2 have also been undertaking
trials using DVB-H, a mobile version of the technology used for
Freeview digital TV.
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.
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, rising 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.
Furthermore, 14% of households in Wales rely on mobile phones as
the households only method of telephony compared to 8% for the UK
on average.
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.
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. Furthermore, a study by
the research and consulting firm Parks Associates indicates that
the value of the online gaming market in the US will reach
US$4.4billion by 2010, up from $1.1billion last year.
According to a Point Topic report published in June 2006,
tele-working is one of the major drivers for broadband uptake. This
is confirmed by Point Topic's first Broadband User Study, conducted
mid 2005, which found that around 3.8 million people in the UK were
using the internet to work from home. Of these, 1.6 million were
tele-workers.
With regards to barriers to increased internet penetration
within the UK, a lack of interest in the internet remains as the
primary reason for not having internet access at home. However,
while people claim to have no interest in the internet, it may well
be the case for many that they do not fully understand what the
internet can offer and that were they to be educated in the uses
and applications of the internet and, in particular broadband,
interest levels would increase and henceforth internet and
broadband penetration would also increase.
Figure 14 – % of people surveyed
who answered the question: You stated that you don't have internet
access at home. Which reason explains best why your household does
not have internet access? (UK), European Commission, December 2005
- January 2006
Figure 14 also highlights that the lack of a PC or other
device capable of connecting to the internet and cost are further
barriers to internet take-up in the UK.
Figure 15 - % of people surveyed
who answered the question: Why does your household not have a
broadband connection? (EU-25), European Commission, December 2005 -
January 2006
When considering reasons for not upgrading from narrowband to
broadband, the 'E-communications household survey' reported that
the most common reason for not upgrading to broadband in the EU-25
is the fact that broadband is considered to be too expensive. Other
barriers were that people were satisfied with the speed of their
narrowband service and that they did not use the internet enough.
These are further barriers that may be overcome by educating people
of the capabilities and uses of broadband.
Figure 16 - % of people surveyed
who answered the question: Would you be willing to change to
broadband from narrowband if...? (EU-25), European Commission,
December 2005 - January 2006
Interestingly, more people surveyed stated that they would be
likely to change from a narrowband service to broadband if they
could have a broadband service as part of a bundle that included a
television service than if the cost of broadband was up to 20%
cheaper. This indicates that financial barriers to broadband uptake
can be overcome by including broadband as part of a package and
will be an encouraging sign for triple-play operators. However,
almost half of the people who had a narrowband service stated that
they would be willing to upgrade to broadband if they did not have
to pay for a telephone line. This clearly indicates that telephone
line rental charges are a major barrier to further broadband uptake
and that there is a clear call for naked DSL (NDSL) services where
a DSL broadband service can be offered over a telephone line
without having to pay for a telephone service.
Figure 17 - % of people surveyed
who answered the question: Would you be willing to upgrade your
broadband connection to a higher speed if...? (EU-25), European
Commission, December 2005 - January 2006
The barriers to the uptake of higher-speed broadband services
also highlight the need for NDSL services with 38% of those with a
broadband service stating that they would upgrade to a higher-speed
service if they did not have to pay for a telephone line. Bundling
of broadband and television services was also seen as a driver for
higher-speed services.
The cost of services was considered to be a major barrier to
higher-speed services with only 10% of those questioned stating
that they would upgrade to a higher-speed service if it was 20%
more expensive than their current service. This may be a problem
for operators who have driven down the cost of broadband services
over the last few years and may now find that end-users are
unwilling to pay any more for higher-speed services despite the
fact that they may cost more to provide. If operators are unable to
convince end-users to pay more for these higher-speed services then
investment in new high-speed infrastructure may become difficult to
justify and, subsequently, there may not be any business case for
the deployment of VDSL or FTTB networks.
Socio-economic factors
High levels of rural population, older inhabitants and low
income households all provide barriers to basic ICT and,
ultimately, broadband penetration levels. Wales, Scotland and
Northern Ireland all have higher rural populations than England,
with Wales and Northern Ireland having particularly high rural
populations at 22% and 35% of their respective populations.
However, the 'E-communications household survey', conducted on
behalf of the European Commission, reported that, for the EU-15
group of countries as a whole, broadband take-up levels were not
dependent upon urbanisation.
Furthermore, the survey's analysis shows that household size
has a greater influence upon broadband take-up; the more people
there are in a household, the more likely it is that it will have a
broadband connection.
|
|
Wales
|
Scotland
|
England
|
Northern Ireland
|
UK
Total
|
|
Rural Population
|
22%
|
16%
|
13%
|
35%
|
12%
|
|
Older People
(aged 65 plus)
|
18%
|
16%
|
16%
|
14%
|
16%
|
|
Household Income
Under £11,500
|
43%
|
32%
|
26%
|
29%
|
27%
|
Table 12 – Profile of
socio-economic groups in UK nations, Office of National Statistics
and Business Geographic 'Urban Indicator', 2001
Wales also has particularly high numbers of households with an
income of under £11,500 when compared to the other nations at 43%
of all households and high numbers of people aged over 65 compared
to the UK total. As such, Wales has the greatest socio-economic
barriers to overcome out of the four UK nations with regards to
broadband take-up.
Mobile-only Households
Within Wales 14% of households are mobile-only, meaning that
they do not have a landline. Wales' higher reliance on mobile
phones as the household's only method of telephony (only 8% of UK
households are mobile-only), means that not having a landline could
be a barrier to people ordering broadband. As ADSL is the most
popular broadband technology in the UK due to price and
availability, this could mean that 14% of households may experience
problems gaining an affordable broadband service.
A possible solution to this would be naked DSL (NDSL). NDSL
enables a broadband connection to be received through a telephone
line without a telephone service being also provided.
Assuming that many of the 14% of households who do not have a
landline phone service have a telephone line available which they
have chosen not to use, this would make broadband available to
them. This would also allow alternative broadband providers
to offer unbunbled services combined with VoIP phone services
without the need to invest in the infrastructure required to
support their own PSTN telephone system. This along with digital
IPTV services may encourage competition.
NDSL could, therefore, increase adoption of broadband by
allowing people to order unbundled DSL without having to sign up
for a landline telephone service.
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 (44% vs. 21%) and information (44% vs. 27%), and
online gaming (35% vs. 16%).
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.
Figure 18 - Internet activities of
UK internet users, ONS, Q1 2006
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.
In May 2006, Analysys Consulting Limited produced a report on
behalf of the DTI which examines the popularity of different
broadband services across the G7, Australia, Ireland, South Korea
and Sweden. For each application, countries are ranked based on the
popularity of the application amongst consumer and business users.
The UK ranked highly for eCommerce and online ordering, indicating
that UK businesses have been quick to utilise this area. However,
use of VoIP and eGovernment services is low and should be further
encouraged in the future.
|
Rank
|
Ordering Online
|
VoIP
|
Paying Government
|
eCommerce Revenue
|
|
1
|
UK
|
Japan
|
Australia
|
USA
|
|
2
|
Germany
|
South Korea
|
Sweden
|
Japan
|
|
3
|
USA
|
Irelands
|
France
|
UK
|
|
4
|
Canada
|
USA
|
Ireland
|
South Korea
|
|
5
|
Ireland
|
Sweden
|
South Korea
|
Sweden
|
|
6
|
Sweden
|
UK
|
Canada
|
Ireland
|
|
7
|
South Korea
|
France
|
UK
|
Germany
|
|
8
|
Australia
|
Australia
|
Italy
|
France
|
|
9
|
Japan
|
Italy
|
USA
|
Canada
|
|
10
|
France
|
Canada
|
Germany
|
Italy
|
|
11
|
Italy
|
Germany
|
Japan
|
|
Table 13 – Use of Broadband
Applications in Businesses, Analysys Consulting Limited, Q4
2005
|
Rank
|
TV, Movie or Video Clip Downloading
|
Online Gaming
|
VoIP
|
Ecommerce Spend
|
|
1
|
South Korea
|
South Korea
|
Japan
|
South Korea
|
|
2
|
USA
|
Sweden
|
France
|
UK
|
|
3
|
France
|
Japan
|
Sweden
|
France
|
|
4
|
Australia
|
Australia
|
Italy
|
Germany
|
|
5
|
UK
|
USA
|
USA
|
Italy
|
|
6
|
Germany
|
Canada
|
Germany
|
USA
|
|
7
|
Italy
|
Italy
|
Canada
|
Canada
|
|
8
|
Sweden
|
UK
|
South Korea
|
Japan
|
|
9
|
Japan
|
France
|
Australia
|
Ireland
|
|
10
|
Ireland
|
Germany
|
Ireland
|
|
|
11
|
|
Ireland
|
UK
|
|
Table 14 – Use of Broadband
Applications by Consumers, Analysys Consulting Limited, Q4
2005
The use of VoIP by consumers in the UK is considerably lower
than in other countries and, as such, may be considered a driver
for broadband over the near future as it becomes more widely used
in the UK.
A survey commissioned by the Welsh Consumer Council in March
2006 shows that 28% of adults aged 16 and over (approximately 60%
of internet users) had shopped online during the last 12 months.
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 most common types of
products purchased online by consumers in Wales are music CDs,
tapes, records and DVDs (42%), followed closely by books (40%) and
travel and accommodation (36%).
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%).
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 would appear 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%). 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, up from 35% in March 2005.
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 were downloaded
in the UK. This is attributable to the growth of legal download
sites and the reduction of copyright files available on file
sharing sites.
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. According to Comscore World
Metrix, YouTube's worldwide audience has increased from 2.8 million
unique users one year ago to 72 million users in August 2006.
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 allow users to create
their own home pages or profiles, where they post information about
themselves, their hobbies and interests, etc. 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.
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 (17.3% of internet
users). Other popular sites include Friends Reunited with 4.5
million unique users (15.5%), Bebo with 3.9 million (13.4%) and
Piczo with 3.7 million (12.5%).
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 a 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 about their day-to-day life or
particular topics of interest. Google owned Blogger.com is
the largest blogging site with over 15 million unique users in
March 2006.
Ofcom research conducted in June 2006 showed that more than
37% of internet users in the UK aged 18-24 had contributed to a
website or 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.
Further evidence to support the increased importance of social
networking sites has been provided by Google's willingness to spend
$1.65billion (£883million) in buying video-sharing website
YouTube.
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. A Directgov study published in
February 2006 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.
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.
Within Europe DSL is by far the dominant technology with around 80%
of all broadband connections in Europe
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.
Another recent trend in the market appears to be convergence –
where companies involved in mobile telecoms, landline telecoms,
broadband and television are merging or increasing their product
portfolios to provide a total service to their customers. As such
there is an increase in bundled services including triple-play
packages.
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.
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.
Conclusions
In Wales, intervention by WAG has ensured that all exchanges
are ADSL enabled and, as such, broadband is now available to almost
all households in Wales. However, whilst availability of basic
broadband services in Wales and the UK are amongst the highest in
the world, 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.
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.
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 and other technological limitations.
Further innovation by industry may drive future broadband
developments such as higher speeds and innovative applications.
However, 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. As such, more intervention by WAG
may be required to ensure a new digital divide does not occur in
Wales, where a significant proportion of the population are unable
to exploit broadband hungry applications.
Latest estimates indicate that broadband take-up levels are on
a par with those for the UK as a whole. Around 43% of Welsh
households had a broadband connection at the end of July 2006,
comparable to figures for the UK as a whole. When considered in
terms of population these figures translate to around 20 broadband
connections per 100 inhabitants.
An increasing range of access devices and high-bandwidth
communication channels are likely to make broadband a true,
ubiquitous utility and an increasing range of applications,
services and content are likely to raise adoption rates to a new
level. However, there is likely to be a section of the population
who continue to lag behind in terms of both access and use of
broadband. This will likely be the case due to economic and media
literacy issues. It is important to understand that there is a
section of the population, both home users and businesses, which do
not feel the need to use broadband as they have not been educated
on the opportunities that it presents. As such, there may be a
further role for WAG in raising awareness in Wales of these media
literacy issues in order to ensure that the full benefits of the
available broadband infrastructure are achieved.
In conclusion, the Welsh broadband market is in a good
position when compared to the rest of the UK having achieved parity
in terms of coverage and take-up. However, significant work remains
in ensuring that this situation continues and that a new 'digital
divide' does not arise.
Analysys Consulting Limited (2006) Penetration of
broadband technologies.
Analysys Consulting Limited (2006) Predicting UK Future
Residential Bandwidth Requirements.
Analysys Consulting Limited (2006) Sophisticated broadband
services.
Broadband Wales Observatory (2006) Broadband Benchmark
Update (Q2) April-June 2006.
Broadband Wales Observatory (2006) Broadband Benchmark
Update (Q1) January-March 2006.
Broadband Wales Observatory (2006) Broadband Rollout and
Affordability.
British Phonographic Institute (2006) Online Music and the
UK Record Industry.
Deutschland Online (2006) Deutschland Online 3
Report.
European Commission (2006) E-Communications Household
Survey.
OECD (2006) Broadband Statistics to June 2006.
Ofcom (2006) The Communications Market – 2006.
Ofcom (2006) The Communications Market: Nations and
Regions – Wales.
ONS (2006) Internet Access – Households and
Individuals.
ONS (2006) Internet Connectivity.
ORC (2006) Residents Report Wave 4.
Ovum (2006) International Broadband Market Comparisons Update
– March 2006.
Available at
Ovum (2006) UK Broadband Status Report – March
2006.
Point Topic (2006)
Broadband
Analysis:Teleworking: Freelancers, Home SMEs and
Employees at Home.
Point Topic (2006) Broadband User Study.
Welsh consumer Council (2006) Internet Shopping in Wales,
Welsh Consumer Council.
[1]
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.
[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]
Figures for Wales are for July 2006
[4]* Data
for Mexico and Sweden are preliminary estimates.
** The OECD statistics for the "Other Broadband" category of
the Czech Republic include a large number of fixed wireless
broadband connections provided over mobile networks. Broadband
subscriptions over 3G networks are not included for other countries
but an exception was made for the Czech Republic because the
connections make use of "fixed" equipment in a home and offer
speeds greater than 256 kbps to individual use