Marked growth in UK broadband proves elusive in 2023

Quarterly study from specialist comms analyst finds persistent challenging macro-economic conditions acting as headwind for overall fixed and wireless broadband market in final quarter of 2023, but with fibre still a shining light

Last year ended on something of a flat note for the UK’s broadband market, with total wholesale and retail connections remaining relatively static during the fourth quarter, standing at an estimated 28.866 million, inching up by 33,000 quarter-on-quarter and down from 28.96 million at the same period a year ago, according to research from Point Topic.

The study counted connections covering fibre-to-the-home/premises/business/cabinet (FTTH/P/B, FTTC), cable, fixed wireless access (FWA) satellite and digital subscriber line (DSL).

Drilling deeper, Point Topic found the fixed broadband retail market slowdown resulted in a 0.11% increase in quarter-on-quarter additions – with around 4,000 additions in Q3 2023 – and with year-on-year uptake falling by -0.33%, a slight improvement compared with a fall of 0.91% for the previous quarter’s reduction in annual take-up.

Overall, the analyst estimates that at the end of Q4, FTTP coverage was just over 18.7m premises (58.4%), up from 17.4 million in Q3 2023; across the UK, 21% of premises still lacked gigabit access, down from 23% three months earlier.

Market leader BT’s Consumer division (which includes business) saw an overall loss of 16,000 subscribers during the fourth quarter compared with Q3 2023. This represented around a 0.15% decrease in the retail segment, but saw strong growth in its FTTP base, adding 220,000 FTTP connections to reach 2.3 million, up 46% year on year. BT Group’s Openreach broadband provision division maintained positive business growth of 7% despite reporting around 100,000 net losses across its FTTC and copper connections, with FTTP connections picking up the slack.

Openreach’s FTTP connections increased by 432,000 quarter on quarter and reached 4.303 million, up from 3.871 million. Openreach delivered another record FTTP network roll-out of 950,000 premises passed in the quarter at an average rate of around 73,0000 premises per week with a footprint of 12.802.

Looking at how the Openreach FTTx network was being used, Point Topic estimated that at the close of Q4 2024, nearly 51% of live lines belonged to non-BT service providers. Of the four other major ISPs, Vodafone had the strongest quarter, with around 39,000 broadband net additions, followed by Sky, with 29,000.

The analyst regarded Virgin Media O2’s (VMO2’s) performance was less than impressive, with approximately 10,0000 additions. TalkTalk continued to have what Point Topic described as a “turbulent” year, as it “grapples with its mountain of debt”. The provider published circa 77,000 net losses in the quarter, but the study noted that its decision to take on Shell Energy Broadband’s 480,000 subscriber base will bolster its financial performance in 2024.

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While the UK’s altnet sector has seen marked growth across the course of the past five years as a whole, the Point Topic research found altnets also struggled with economic headwinds as they have slowed down their FTTP network roll-outs to focus on subscriber take-up. That said, collectively, they had a strong fourth quarter, with around 80,000 additions up from 41,000 net adds in the previous quarter.

During the three-month period, altnets’ consumer broadband base reached an overall estimated 1.937 million, up by around 80,000 since Q3 2023.

Assessing retail FTTP trends, the analyst observed that billions in cap/op expenditures on full-fibre network deployments in the past few years has seen coverage increase at what it said were “breakneck” speeds in parts of the UK.

Larger proportions of the country’s local authorities (LAs) are now seeing an increase in multiple FTTP operator coverage. Some 117 LAs had three overlapping independent fibre providers, compared with 103 in Q3 2023.

Across the UK, retail and business FTTP connections reached an estimated 5.877m at the end of Q4 2023. More than two million premises could choose between three independent fibre ISPs. This figure went up by 147,000 premises, compared with an increase of around 180,000 in Q3 2023 – yet 21% of UK premises did not have access to gigabit capable broadband, either through a Docsis3.1 network or an FTTP network.

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