Broadband hits five million user milestone as take-up gathers pace

The number of UK broadband subscribers passed the five million mark last month, and the figure is predicted to reach eight...

The number of UK broadband subscribers passed the five million mark last month, and the figure is predicted to reach eight million next year.

According to telecoms research firm Baskerville, the number of UK broadband lines hit five million in mid-September, with 50,000 new subscribers signing up every week. These included subscribers buying cable broadband services.

Baskerville's Telecom Markets Broadband Subscriber Database revealed that out of three million DSL subscribers, about 40% subscribe to BT directly, but most subscribe to services offered by ISPs that buy their DSL provision wholesale from BT.

Baskerville analyst Gareth Willmer said local loop unbundling, which reduces operators' dependence on BT's infra- structure, has yet to make an impact in the UK.

"There were only 13,000 subscribers to unbundled DSL by the end of June, compared to 730,000 in France," he said.

Industry regulator Ofcom is committed to making unbundling work, as it is seen as essential to enabling new suppliers to enter the market and offer more services to users.

Based on current broadband take-up, Baskerville estimated that there would be eight million broadband users in the UK by the end of 2005, with almost 10% using unbundled broadband lines.

Suppliers such as Cable & Wireless have promised major broadband roll-outs using unbundling. Earlier this year C&W acquired Bulldog Communications, which specialises in supplying unbundled broadband in urban areas with high numbers of potential connections.

Overall, about 32% of households will subscribe to broadband by the end of 2005, according to Baskerville. There is concern however that many smaller businesses are missing out on the opportunities broadband offers, and this week the Institute of Directors is launching a broadband promotion campaign among SMEs and other businesses.

Willmer predicted that subscriptions would rise rapidly in the next year or so because of falling prices, new voice over IP products and increasing competition from alternative broadband carriers.

The falling price of unbundling could be a key driver for an increase in UK subscribers, he added, as has been seen in France. BT is working to a gradual price reduction programme, following an Ofcom ruling that it should reduce its unbundling charges to other suppliers by up to 70%.


Growth in UK broadband subscribers

Q2 2004 Q4 2004 Q4 2005
Total number of broadband subscribers 4.4 million 5.5 million 8.2 million
Total number of subscribers as a percentage of households 17% 21.5% 32%
DSL subscribers 2.7 million 3.6 million 5.6 million
Cable broadband subscribers 1.6 million 1.9 million 2.6 million
Unbundled local loop subscribers 10,000 80,000 860,000

Source: Baskerville Broadband Subscriber Database

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