This report provides an update to our November 2020 publication, Ultrafast UK: Gigabit connectivity sees unprecedented investment and expansion. It covers the latest announcements and activities of the country’s three largest broadband players, Openreach, Virgin Media O2 and CityFibre, and looks at developments and progress made by several independent infrastructure providers.
Currently 65.9% (of which 31.4% is full fibre) of UK homes and businesses have access to ultrafast gigabit broadband as part of the government’s focus on improving connectivity, up from just 6 per cent at the start of 2019.
Openreach passed six million homes and businesses by November 2021, with a record build-rate of 47k premises per week during the latter part of Q3 2021; 220,000 premises passed during the quarter; 1.3 million subscribers to their FTTP service their highest uptake to their FTTP service with 24.5k orders in last week of September.
Virgin Media announced the completion of ifs gigabit broadband rollout (or DOCSIS 3.1 upgrade) which started in Q4 2019, to its entire UK footprint of 15.5 million homes; nearly two-thirds of the Government’s 85% national gigabit coverage ambition.
By late January 2022, VMO2’s parent companies - Liberty Global and Telefonica – have opened discussions with investors to help raise “hundreds of millions of pounds” to support their FTTP rollout to reach nearly 7 million premises by 2028.
CityFibre secured GBP 1.125bn in its latest capital raise in September 2021 and has just over 1 million premises RFS
We estimate that between 2021 to 2025 AltNets will be investing over £15 billion to cover the UK with full fibre networks.
AltNets full fibre deployments have typically been focused on towns and cities as operators seek the best return on investment; however that has not always been the trend in 2021 as regional suppliers continue to ramp up their efforts through private investment and BDUK Project Gigabit subsidies.
In Q3 2021 fixed broadband subscriber figures grew in 90 per cent of the 131 countries covered in our analysis. The number of global fixed broadband connections grew by 2.2% and stood at 1.25bn, with the quarterly growth being the highest in 2021 so far. As before, the extent of growth varied across different markets, with 13 countries reporting a decline in fixed broadband subscriptions in Q3 2021, down from 16 in Q2 2021. The decline was mainly either in saturated broadband markets with high household penetration or those where mobile connections are the preferred way of getting online.
The share of FTTH connections in the total fixed broadband subscriptions continued to increase and stood at 58 per cent. Superfast and ultrafast cable broadband connections followed with an 18 per cent share.
China added 16 million, Brazil almost two million and France just under a million FTTH broadband subscriptions.
The highest FTTH broadband growth rates were largely in developing markets, with the UK, France, Italy and Germany also reporting significant quarterly growth.
Point Topic found that as of December 2021, the lowest available monthly cost of broadband across England and Wales varied from £11.75 (a FWA service from Reeth) to £39.99 (an FTTP plan from KCOM). The entry level monthly price of broadband is higher than £20 in 33% of Lower Layer Super Output Areas (LSOAs) of England and Wales. We conducted our analysis at the level of LSOA, a geographical unit used by the ONS to report small area statistics. Each LSOA contains between 400 and 1,200 households, so it is a small enough unit at the right level of granularity to reflect the differences even within the same cities, towns and rural areas. There are currently 34,753 LSOAs in England and Wales.
The entry level monthly price of broadband was £20 or less in 67% of LSOAs.
Comparing it to the household income reveals more nuanced differences between parts of the country.
Households in many areas of the Southwest, Northeast and Northwest of England as well as in Wales would have to spend a much larger proportion of their net income on entry level broadband services.
Where average incomes tend to be higher – in the Southeast and Midland – the relative cost of broadband is especially low – 0.3% versus 2.07%.
One might argue that 2% of net household income spent on basic broadband in the most ‘expensive’ areas may not seem like a lot, but this figure does not paint the full picture of inequality and poverty. In some LSOAs of England for example, up to 61% of the population is income deprived, which means that for these households’ broadband not only becomes even more relatively expensive but the costs may be prohibitive.
Furthermore, due to income inequality households in some parts of the country will spend a larger proportion of their income on basic broadband than in others. And, given significant income deprivation of households in some areas, they find it hard to afford even basic broadband.
Table 2 below shows an overview of the lowest cost broadband providers in different LSOAs for December 2021.
Other key players announcements along with independent operators’ investment and expansion news can be found below.
DCMS News
On 6 January 2022, Building Digital UK launched a National Rolling Open Market Review (National OMR) to confirm where gigabit capable broadband infrastructure currently exists or is planned to be built in the UK over the next 3 years. The Rolling National Open Market Review takes place three times a year in January, May and September.
The purpose of this National Rolling Open Market Review is to:
support better strategic planning and prioritisation of Project Gigabit Procurement intervention areas
support better strategic planning and prioritisation of Project Gigabit Procurement intervention areas
minimise the risk of BDUK intervening in an area that would disrupt a supplier’s existing commercial plans
Specific suppliers operating on a national footprint have been asked to submit data for the inaugural National Rolling Open Market Review which launched on 7 January 2022 and will close at 5pm on 15 February 2022.
On 7 January DCMS published its updated Gigabit Infrastructure Subsidy - Access to Infrastructure Code v2.0 guidance. For the purposes of the Gigabit Infrastructure Subsidy Scheme programme, there is a requirement for Suppliers to offer access to other bidders for infrastructure it operates in an intervention area, should the Supplier(s) wish to bid for a particular requirement.
BDUK has implemented the Access to Infrastructure Code to meet this requirement. Suppliers must either agree to and comply with this Access to Infrastructure Code in respect of their corresponding infrastructure or confirm that they have no infrastructure in the intervention area.
Updated UK ISP profiles and UK country profile
We have updated our profiles of the UK’s leading internet service providers, as well as our annual overview of the country’s broadband market.
Please get in touch if you would like to find out more about UK Plus or these particular publications.
News Round-up
BT Group News
Virgin Media O2 (VMO2) News
Independent Operators News
Other key news items throughout the month can be found below.
Policies, Studies, Survey and Ofcom Announcements
Devolved Nations (Northern Ireland, Scotland and Wales) Broadband Announcements
Mobile Broadband Announcements
Technology Announcements