During February Point Topic published three publications covering the UK fixed line and European mobile broadband markets. Key findings and overviews can be found below and on our free analysis section with detailed reports available via our UK Plus subscribers service, sign-in here to access our UK Plus content.
Superfast and Ultrafast Broadband Deployments in the UK
Premises passed as of Q4 2021
This is our quarterly update on superfast and ultrafast broadband deployments in the UK. The analysis is based on the ThinkPoint broadband availability dataset which includes 1.7m postcodes[1]. More granular, monthly postcode level broadband availability updates by ISP and technology, are available to our ThinkPoint customers.
Key headlines:
By the end of 2021, Virgin Media O2 (VMO2) completed its DOCSIS 3.1 based gigabit broadband rollout to 15.5 million homes, which covers its entire footprint.
Openreach added nearly 700K FTTP premises in Q4 2021 to reach 5.8 million.
As of end 2021, almost 3 million UK premises were passed by independent (AltNet) fibre networks.
Nine local authorities had overlapping networks from three independent fibre network operators, while 79 local authorities had two independent fibre networks intersecting.
Kingston upon Hull, Belfast and Milton Keynes were the top fibre cities in the UK, with overall FTTP coverage of 99%, 88% and 87% respectively. In almost half of all local authorities (47.6%) FTTP coverage is still less than 20% of premises.
Our focus area of the month is Cheshire East where 8,000 residential premises lack ultrafast broadband and could be an attractive target for deployment.
At the end of Q4 2021, the total FTTP coverage including Openreach, Virgin Media RFOG and independent fibre networks was 9.1 million premises (28.9% of the UK premises). Virgin Media O2 passed 49.2% of UK premises with their DOCSIS 3.1 based gigabit network. Needless to say, FTTP and DOCSIS 3.1 networks overlap in multiple areas.
FTTP coverage at local authority level – Openreach, VMO2 and Independent Operators
In some areas, Openreach FTTP network is complemented by independent fibre networks and/or Virgin Media’s RFOG network. Also, KCOM has a significant FTTP footprint in the Northeast. Taking this into account, here are the top and bottom ten UK local authorities by total FTTP coverage (Table 1).
* Including Openreach, KCOM, independent networks and Virgin Media RFOG
On 7 December Virgin Media O2 (VMO2) announced the completion of its DOCSIS 3.1 based gigabit broadband rollout to 15.5 million homes, which covers its entire footprint. We found that between the end of Q3 2021 and Q4 2021, the operator added 3.9 million gigabit premises. With just over a million RFOG premises passed, VMO2 remain the second largest FTTP network operator in the UK after Openreach.
In terms of the percentage of premises covered by VMO2’s DOCSIS 3.1 network, following their latest upgrade, the top twenty local authority list has a broad geographical spread (Table 2).
According to their recent announcement, CityFibre have also reached a 1 million FTTP premises milestone although this is not reflected in our data yet. It is possible that they include premises where the network has been built but is not live yet.
Independent network operators have also been pushing forward with fibre rollout. CityFibre is leading the way in terms of the FTTP footprint. The operator has committed to FTTP rollout to 8 million premises by 2025. Hyperoptic has the second largest independent FTTP network with 0.6m premises passed, while Community fibre is a strong third with nearly 0.5m.
Among the larger FTTP network operators, Community Fibre and CityFibre grew their footprints at the highest rates (33.9% and 32.9% respectively) compared to the previous quarter. Trooli and Jurassic Fibre more than doubled their footprint but it grew from a small base. Network overlap by independent fibre network operators has increased further. In Q4 2021, nine local authorities had overlapping networks from three independent network operators (up from six in Q3 2021), though the number of premises passed remained modest. (Table 3).
Across the UK, almost 120,000 premises had access to two or three independent fibre networks at the end of 2021. In total, independent FTTP networks passed 2.9 million premises, or 9.1% of all UK premises.
Ultrafast broadband rollout target area of the month
There are still many pockets across the country with low broadband competition in terms of operators and technologies, which are being overlooked despite potential high demand for ultrafast speeds. In our December 2021 broadband availability dataset, we identified 5,893 LSOAs covering 602,258 households which could be an attractive target for deploying ultrafast broadband[2].
In February, we focused on Cheshire East, where we identified 77 LSOAs meeting the above criteria. They contain 135 postcodes with a total of 7,818 households and have an average attractiveness score of 2.4, varying from 2.002 to 2.859 (Figure 1).
Analysis of Q4 2021 UK ISP subscriber numbers
Summary of key findings
The UK’s gigabit-capable broadband coverage reached an impressive 65% and full fibre (FTTP) coverage reached just over 28.9% of the UK, due largely in part to VMO2 completing their network upgrade, Openreach overcoming previous quarters’ backlogs and independent (AltNet) suppliers making their presence known, especially in rural locations, market towns and cities. AltNets remain an attractive perspective for investors as the quarter saw £805.5 million in financial backing being secured by a handful of ISPs including Broadway Partners, Gigaclear, Lightspeed, Netomnia, Toob, Truespeed and Zzoomm – with a combined aim of passing 8.350 million premises by 2027.
Key trends in Q4 2021:
Total Q4 2021 FTTP, FTTx, cable, FWA/satellite and DSL wholesale connections stood at an estimated 28.3 million, up from 28.1 million Q-o-Q and 27.6 million Y-o-Y.
Total retail connections reached an estimated 29.4 million during Q4 2021, up from 28.9 million Q-o-Q and 27.8 million at the close of Q4 2020.
Since the start of the pandemic we estimate that around 1.061 million broadband lines were added since Q2 2020.
Superfast and ultrafast consumer fixed broadband using predominately FTTP, DOCSIS 3.1 or FTTx, made up around 86% of the UK’s total broadband market (Figure 2).
Combined additions of both super and ultrafast lines reached an estimated 146,000 up 32.7% Q-o-Q.
Connections with speeds of at least 30 Mbps reached a total of 24.3 million up 1.7% from Q3 2021, an increase of 9.9% from 2020.
At the close of Q4 we estimate that just over 53% of lines live on the Openreach FTTx network belong to non-BT service providers.
Smaller FTTx (pre-dominantly FTTP/B) ISPs subscribers saw nearly a 6% increase in the quarter to an estimated 793,000 out of 2.628 million with their market share coming in at 12.7% in Q4 2021 (Figure 3).
ISPs operational performances
All major ISPs reported positive results in the final quarter despite a challenging year of continued pandemic lockdowns and restrictions, supply issues and a saturated marketplace.
BT’s fixed broadband Consumer net additions came in around 44,0000.
BT’s Consumer FTTP customer base increased to 8.6% of their overall connections reaching 1.053 million with a penetration rate of 27% (up 2ppts).
Openreach’s FTTP base grew by 244,000 quarter-on-quarter, their largest ever quarterly increase and stood at 1.508 million up 19.3% from Q3 2021 and nearly doubled from 2020.
VMO2 saw their fixed segment showing a marked improvement (up 42.3%) with their broadband net adds reaching just over 60,000.
VMO2 announce future for wholesale network strategy and aim at establishing a Joint Venture (JV) to fuel their ambition to cover 7 million additional UK homes with full fibre broadband by end 2027.
Sky UK remains the dominant player in its European operations; Sky saw 61,000 net broadband additions throughout its European market and ended the year with around 6.7 million UK subscribers.
Vodafone nearly reached 1 million connections with a reported 991,000 subscribers at year end, up 3ppts.
European Mobile Broadband Tariff Report Q4 2021
Point Topic tracks changes in the 4G LTE / LTE Advanced and 5G tariffs provided by mobile operators across the EU-28 countries along with Norway and Switzerland. We found that at the close of Q4 2021, the average monthly tariff for residential 4G data services varied from $59 PPP (purchasing power parity) in Norway to $17 PPP in Italy. The average monthly subscription for data-only 5G services in our sample varied from $29 PPP in the Netherlands to $88 PPP in France. The average 5G tariffs were more than twice the price of 4G in Poland, Slovenia, Austria, France and Italy.
Key points:
The average data cap on the 4G data tariffs varied from unlimited data in Finland to 13.5 GB in Slovakia.
The average 5G tariffs were more than twice the price of 4G in Poland, Slovenia, Austria, France and Italy.
The average data allowance on 5G tariffs varied from 29 GB in Hungary to 750 GB in Denmark.
The average downstream speed on 5G was 628 Mbps, up from 597 Mbps six months ago. In comparison, the average bandwidth on 4G in Q4 2021 was 173 Mbps.
Other key players announcements along with the month’s news round-up can be found below.
Levelling Up the UK White Paper Confirms Nationwide Gigabit Coverage by 2030
On 2 February the UK Government published its Levelling Up the United Kingdom White Paper which outlined its 10-year plans to tackle geographical disparity and taking pressure off of London and the South East, “by improving economic dynamism and innovation to drive growth across the whole country, unleashing the power of the private sector to unlock jobs and opportunity for all.” To meet its levelling up and equalisation strategies, the UK Government is setting clear and ambitious medium‑term missions to provide consistency and clarity over levelling up policy objectives. The 12 missions will serve as an anchor for policy across government, as well as catalysing innovation and action by the private and civil society sectors. These missions are ambitions that the UK Government has for all parts of the UK.
Until now the UK Government has been openly vague about its timelines for achieving nationwide gigabit-capable broadband coverage as they scaled back their ambitions to reach 85% coverage by 2025 with the aim of getting as close as possible to 100% without any end date. However, Mission Four finally confirms that by 2030, the UK will have nationwide gigabit-capable broadband and 4G coverage, with 5G coverage for the majority of the population. The Government does stipulate that nationwide coverage for gigabit capable services will cover “at least” 99% of premises, with 4G services likely to cover 95% of the landmass by the end of 2025, with 5G ambitions to reviewed on a rolling basis to ensure targets are fit for purpose. It is worth noting that 5G coverage ambitions have already been downgraded from the Conservative’s 2017 manifesto where it outlined plans to “have the majority of the population covered by a 5G signal by 2027.”
DCMS’ 8 February publication Improving Broadband for Very Hard to Reach Premises: Government Response underscored the need for a mixed technological approach to reaching the c.100,000 remote premises. The report intimates that given the cost-prohibitive solutions to supplying FTTP networks to these remote premises, it is likely that the government will encourage suppliers to use new fixed wireless solutions, LEO satellites (e.g. Starlink, OneWeb) and hybrid platforms to help push faster broadband into the hardest to reach areas. However, there is one drawback and that LEO based solutions are still in early development and may encounter capacity problems with wide take-up, at least in the medium-term. One positive is that of the public respondents to the consultation which ran from 15 March – 25 June 2021, the vast majority were willing to utilise mixed technologies as a solution to more stable and faster broadband, despite the service not being able to offer gigabit speeds.
The government has yet to finalise its approach, however it seems logical to offer a voucher system approach for satellite and/or FWA services to help cover the cost of LEO hardware or to help subsidise wireless builds. However, at present the £89 per month rental on Starlink may be too costly for subscribers, resulting in the subscriber having to utilise a more affordable option such as OneWeb or Eutelsat and then switching over to a more cost effective LEO satellite service.
Key points of Mission Four include:
Aims to address spatial disparities in digital infrastructure provision between densely versus sparsely populated areas.
Seeking alternative solutions to reach the final 0.3% - less than 100k – very hard to reach premises as the economic incentives for the private sector to provide services to these communities are less clear cut.
Metrics for this mission will be tracked at lower tier local authority level using Office of Communications (Ofcom) and Think Broadband data.
News Round-up
BT Group News
Virgin Media O2 (VMO2) News
CityFibre (CF) News
Independent Operators News
Other Key News Items
Policies, Studies, Survey and Ofcom Announcements
Devolved Nations (Northern Ireland, Scotland and Wales) Broadband Announcements
Mobile Broadband Announcements
Technology Announcements
[2] We define such ‘attractive’ LSOAs as follows: they are not covered by FTTP or VMO2 networks, have no independent operators present, each particular LSOA contains postcodes with ≥50 households, Their ‘attractiveness’ score is 2 or higher. The attractiveness score, used in our Broadband Availability Forecasts combines affordability and Digital Deprivation Index, population density, and time since last network upgrade.[1] There will be generally a lag to the operator announcements for premises passed at the time since it takes us time to properly track and audit any new deployments, unless the operators tell us about them.