Research Round Up January 2022
Updated: Jun 21, 2022
Ultrafast UK: Gigabit connectivity coming of age
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.
Fixed Broadband Subscribers in Q3 2021
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.
Broadband affordability in England and Wales: In need of levelling up
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.
For further details head to our Free Analysis section.
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.
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News Round-up
On 25 January BT Openreach announced 113 new full fibre network expansion locations: · Openreach’s FTTP build in Scotland has passed over 530k premises including 20k businesses and announces a further 54k in their latest ultrafast full fibre upgrade, with the new network to be built to the majority of premises in Stirling and Bridge of Allan; Kirkcaldy, Dysart and North Glenrothes in Fife; Carnoustie and Monifieth in Angus; and Gourock in Inverclyde. · Rollout in Wales has reached over 425k, with around 100k consumers ordering a full fibre service from BT or one of their communication providers partners; also announced a further 85k premises as part of their rollout plans. · East Midlands footprint covered around 350k premises, 75k consumers have ordered an FTTP service and with a further 131k homes and businesses due to be passed in the near future. · In County Durham around 133k premises have been covered by Openreach’s growing FTTP footprint, with 50k more premises being announced for coverage – 33k subscribers have already taken up the service. · The North West has seen more than 815k premises passed, with 163k subscribers and 196k more premises added to their expansion plans. · In Yorkshire and the Humber region – typically KCOMs stomping grounds – 480k homes and businesses have been passed, with 91k subscribers taking up a full fibre service with a further 90k premises added to their rollout. BT published their Q4 2021 results in early February and announced that they delivered record FTTP build of 662k at an average rate of over 50k per week in the quarter with footprint now at 6.5 million, including 2 million rural premises. FTTP take up accelerated to 1.5 million premises driven by Openreach's Equinox offer. Their 5G ready customer base stood at over 6.4 million and their 5G network covered more than 40 per cent of the UK population. On 12 January 2022, Openreach published Tranche 7, or the list of 98 UK exchange areas where they plan to move away from copper-based analogue phone, and covers around 954k premises, which brings the total for stop sell to 555 areas or 5 million premises. A full list of exchanges along with timeframes for the withdrawal of services can be found on Openreach’s new Stop Sells Updates page. In mid-January BT Consumer announced their annual price increase. Each year, they adjust the prices of some of their products and services in line with the Consumer Price Index (CPI) of 5.4%, plus 3.9%. This means that, in 2022, most of their customers will see a price increase of 9.3% with the changes to take effect from 31 March 2022, for those who signed up after 1 September 2020 and those who are out of contract. The most noticeable changes from BT Openreach that will impact all resellers who buy from them are a 4.97% rise in a standard business PSTN and ISDN2 channel line rental, which is the second rise in a 12-month period. These price hikes then have a knock-on effect on other services impacted by the price of PTSN and ISDN2 lines, which will see re-sellers passing on the price rise to consumers. BT stated that the price rise, although accepted as unpopular, was necessary to ‘keep the rising costs we face and ensure we can continue to deliver a brilliant network experience as customers usage of data grows month on month.’ Even with work from home mandates and more online learning during the past two months, peak network usage time remains in the evenings when subscribers are home and using streaming services or online gaming consoles, something that has not really changed since proliferation of online TV streaming services since 2020. Despite the growing outcry from consumers about the general increase in the cost of living many ISPs and MNOs have opted for an inflation-linked model with Vodafone, TalkTalk, Plusnet, EE, O2 and Shell Energy all seeing price increases above 9%. KCOM announced that they would be suspending their price increases for 2022, whilst Sky and its subsidiary Now Broadband have not yet announced a price increase for 2022. Virgin Media also announced a 9.3% price increase, however, Virgin doesn’t include a yearly price rise in its contract terms, allowing customers to switch or cancel their contract without any cost. On 27 January Virgin Media O2 (VMO2) announced they had passed a further 10k premises in Otley, Menston, Burley-in-Wharfedale and Guiseley in West Yorkshire as part of its FTTP gigabit-capable Project Lightning rollout. The ISP also announced a reduction in their 1 Gbps package as part of a promotional offer to £50.99 per month for 18 months down from £62. On 25 January, British Sugar and Virgin Media O2 Business and delivered in partnership with Nokia, switched on a first-of-its kind private mobile network, across all four British Sugar factory sites, spanning Norfolk, Suffolk and Nottinghamshire – a total operational area of 2.17km2. The new private network will provide dedicated, secure 4G connectivity for all British Sugar’s manufacturing facilities, as part of a major ‘factories of the future’ upgrade. On 13 January, a new report from Virgin Media Business and the Greater Manchester Combined Authority (GMCA) entitled, Tackling digital inequality in Greater Manchester which outlined Virgin’s LFFN rollout in the area to connect 1,500 public sites with an economic benefit of £11.8 million in the first year. On 30 January, a number of reports surfaced claiming that Virgin Media (O2), alongside merger parents Telefonica and Liberty Global, would be undertaking deeper discussions with the hope of securing investment for a new Joint Venture (JV) to fuel their long-held ambition to cover millions of additional UK homes with full fibre broadband. It was reported by Sky News that VMO2 are seeking a substantial sum from third-party investors and the external capital injection could eventually total as much as £1 billion. CityFibre has been keeping up the pace on its rollouts as throughout January they announced the following FTTP network deployment projects: · Construction of the £5m town-wide full fibre network has begun in March (Cambridgeshire) and is being delivered by Granemore Group. · Wayleave agreement between CityFibre and Swindon Borough Council will see the former connecting over 10k Council managed homes in the area. · £19 million additional investment (on top of the original £40 million) for network expansion to ‘thousands of more homes’ in Aberdeen. Homes in Woodside, Garthdee, Ruthrieston, Mannofield, Kincorth, Broomhill, Cove, Kaimhill, Ferryhill, Northfield, Tillydrone, Rosehill, Hazlehead, Airyhall, Hilton, Seaton and Torry are RFS. · Appointment of GCU UK Ltd to lead its £42 million investment in digital infrastructure to 109k premises in Gateshead, due to commence in February 2022. · Homes and businesses go live in Gloucestershire – Quedgeley, Podsmead, Tuffley and Hardwicke as part of £31 million rollout. · Britwell and Wexham in Slough, Tilehurst and Norcot in Reading go live with projects in Bracknell and Maidenhead are also progressing at pace with live service not far behind in Jennett’s Park and North Town. · Milestone of 110km of full fibre cables deployed in Nottingham as part of its £117 million digital investment in the city. · 40km laid and 4,500 premises passed in Worcester. KCOM announced on 24 January that it has continued its network expansion into North Lincolnshire as it passed 3,300 properties in Broughton, Barrow and Scawby Brook. The supplier also announced that it added a further 2,500 homes and businesses in Crowle, Messingham and Epworth with live connections expected by the end of February with more areas due to be available in March. On the 4 January KCOM published its latest annual report for the year ended 31 March 2021. Some key figures for the year include: · Total full fibre network coverage reached 229k premises (up from 203k in 2020) with 28,700 premises being covered in surrounding areas with the build due to complete in second half of 2022. · Total consumer broadband subscribers reached 147k up from 141k in 2020 · 89.1% per cent (118k) of customers are on a full fibre package up from 82.4% y-o-y · The total business broadband sites reached 7,400 up from 6,600 in the previous year. On 27 January Ofcom published its Telecommunications Market Data Update Q3 2021. At the close of Q3 the following figures were cited: · There were 27.9 million fixed broadband lines at the end of Q3 2021, an increase of 127k (0.5%) from the previous quarter and 458k (1.7%) year-on-year. · This growth was driven by ‘other inc. FTTx’ lines’ (predominantly fibre broadband connections), which increased by 450k (2.5%) during the quarter. · At the end of the quarter there were 18.5 million ‘other inc. FTTx’ lines, accounting for just over two thirds (66.3%) of all connections. · The number of cable broadband lines also increased, up by 46k (0.9%), while the number of ADSL lines fell by 369k (8.4%) from Q2 2021. On 7 February, Thinkbroadband reported that 1 million premises now have a choice of two physical full fibre networks. When the overlap between FTTP networks was at 3.06% of premises in January it was close to the 1 million mark but with the overlap now rising to 3.23% the million mark has been reached. Full fibre coverage in the UK has reached 31.46% of premises with Wales remaining firmly stuck to the bottom of the Gigabit league table but should make it to the 50% mark in two or three months and it is not in areas where Virgin Media DOCSIS 3.1 is present.
BT Group News
· 12 January – BT engineers new digital network infrastructure for ABB. · 13 January – BT appointments Marc Overton as Managing Director of its newly created ‘Division X’ unit, which forms part of its Enterprise business. Marc will join the company on 14 February 2022. · 19 January – BT selects Rackspace Technology as cloud partner, which the company will deploy in BT data centres along with its Rackspace Fabric management layer. · 26 January – BT and Nokia trial Open RAN solution in Hull, UK, to enhance mobile broadband experience. BT will install Nokia’s RAN Intelligent Controller (RIC) for Open RAN, across a number of sites, to optimise network performance for customers of its mobile network, EE. · 27 January – BT Group to recruit more than 600 apprentices and graduates for its September 2022 intake. · 27 January – BT seals data centre deal with BAI Communications to help deliver high speed mobile connectivity across the London Underground
Virgin Media O2 (VMO2) News
· 6 January – Nursing apprentices in Kent and Oxfordshire have been supported with £144,000 in training funds from O2, as part of its ongoing efforts to support the NHS during the COVID-19 pandemic. · 10 January – O2 and Virgin Mobile customers will maintain inclusive roaming in Europe, using data, calls and texts just as they would in the UK · 24 January – City of York Council has joined forces with Virgin Media O2 to tackle vandalised broadband cabinets in the area. Throughout the six-month trial, the organisations will work together to restore cabinets across the city, where up to 200 cabinets are vandalised every year. · 26 January – Environmental charity Hubbub and Virgin Media O2 are launch a £400,000 fund to enable a pioneering tablet lending scheme which will make tablets and free mobile data available to community organisations supporting people in temporary accommodation.
Independent Operators News
· 4 January – Axione UK have given some indication as to where they will be deploying their FTTP network as part of their £300 million ‘large-scale build’ as they submitted an application to install several new 1.6-metre-tall street cabinets around the seaside town of St. Andrews in Fife (Scotland). · 5 January – Business focused UK ISP and communications provider FluidOne announced the acquisition of SAS Global Communications, a provider of SD-WAN-enabled global hybrid networks, to enhance its service offering to mid-market and enterprise customers. FluidOne was established in 2006 and supports 1,150 customers including 200 channel resellers with services in SD-WAN, cybersecurity, IT managed services and mobile. · 7 January – Gigaclear launched a special offer that gives new customers an unlimited 200Mbps (symmetric) service for just £17 per month for the first 18 months of service (£47 thereafter). · 10 Janaury – London-based G.Network appointed Simon Kilonback, currently CFO of TfL, as its next Chief Financial Officer, with his roll due to commence in May 2022. · 10 January – ISP Full Fibre Ltd partnered with the Kickstart Scheme to hire 10 new trainees aged 16-24 across the company’s 4 sites in Exeter, Ledbury, Telford, and Derby. Candidates must be claiming Universal Credit to be eligible for this scheme. · 12 January – EE broadband announces offer for new subscribers taking one of their FTTP 500 Mbps packages will receive up to 12 months’ Xbox Game Pass Ultimate, as well as unlimited mobile gaming data. · 13 January – Trooli, which aims to reach 1 million premises with their gigabit-capable FTTP network by the end of 2024 (mostly across Kent, East Sussex, Berkshire, Buckinghamshire and Suffolk), has 78 new locations to the “coming soon” section of their rollout plan. · 13 January – Newcomer, Freedom Fibre, which is being supported by UK ISP partner TalkTalk (here) and is busy building a new 10 Gbps FTTP broadband network across semi-rural parts of North England, has just invested another £5 million to help extend their network into Shropshire. · 15 January – BT’s subsidiary, Plusnet, announces that it will launch FTTP services later in 2022, however, this has been mentioned before by the cost friendly provider with launch dates being repeatedly pushed back. · 17 January – ISP Vispa announced that they’ve “stopped accepting new orders” for broadband and phone services supplied on FTTP infrastructure that has been deployed by British Fibre Networks (i4 Technology Group) due, seemingly, to a lack of support and other “issues”. · 17 January – Connexin has successfully connected the first customer to its new full-fibre network in Hull and East Riding as part of their £80 million 10 Gbps capable network expansion into Hull which started in September 2021. This was followed on 28 January by their first connection in South Cave using the Siklu Smarthaul Wireless Network Design Engine (WiNDE) to plan and design a complete millimetre wave wireless network. · 17 January – Subsidiary of VX Fiber, LilaConnect, has started construction of a new full fibre network in Leek. Once completed it will provide 11,750 homeowners and businesses with gigabit capable connections and is due to be complete in June 2022. · 18 January – Sky Broadband’s UK ISP sibling for small businesses, Sky Connect, launched their FTTP based broadband packages, offering ‘Speed Flex’, a dedicated account manager, 4G back-up and internet security as standard on all their ultrafast fibre packages. · 18 January – Business connectivity provider, Neos Networks, confirmed that it had been chosen by Jisc – suppliers of a digital network and supporting services for the UK’s higher education and research sector – to deliver a new Dark Fibre network offering 100 Gbps connections and spanning the North-West of the UK. · 18 January – Quickline announced that the £14.5 million Phase 4 Superfast North Yorkshire (SFNY) project has begun. The rollout, in partnership between NYnet, a North Yorkshire County Council-owned broadband company and Quickline have just gone live in the village of Picton. · 19 January – Wales-based ISP, Ogi (rebranded from Spectrum Internet), announced Monmouth, Milford Haven, Johnston and Dinas Powys announced as the next historically underserved communities to join the growing Ogi network, seeing an investment of £5-£6 million in each community. · 20 January – Wholesale supplier, Netomnia, announced that it is rolling out its FTTP network in both Wakefield (71k premises) and Pontefract (48k premises) in West Yorkshire. · 24 January – Brsk announced it aims to cover 150k premises across the Greater Manchester area (including Stockport and the surrounding areas, with plans for Middleton and Oldham). · 27 January – Grain announced the next phase of its national £75 million network expansion covering areas of Birmingham (Birchfield), Gateshead, Lincoln, Preston, Plymouth (Keyham), St Helens, Wigan, and Wolverhampton. · 27 January – Gigaclear announced that they have begun work in Buckingham to connect the town and outlying villages of Maids Moreton, Chackmore, Radclive, Gawcott and Padbury. · 27 January – The Common Wholesale Platform (CWP), which started life a few years ago under the Independent Networks Co-operative Association and has become its own organisation, has signed a deal with Mediafon Datapro to adopt the company’s new centralized migration solution for alternative UK broadband ISPs to use. · 28 January – Vodafone broadband announced that it has reduced the prices of its Openreach and CityFibre FTTP networks packages and will be available to order until 31 March 2022. Vodafone’s Openreach network entry level ultrafast 200/27 Mbps package costs £27 per month with the fastest 901/105 Mbps package coming in at £70 per month. CityFibre’s ultrafast network coverage offerings start at 200 Mbps symmetrical speeds for £32 per month with the symmetrical 910 Mbps package costing £35 per month. · 28 January – Giganet announced that they have entered into a multi-year agreement to support the expansion of hyperfast full fibre delivery to premises throughout the UK, with Anixter, a leading global supply chain solutions provider and subsidiary of Wesco International. · 31 January County Broadband announced that it aims to pass thousands of rural homes and businesses in North Norfolk by adding 15 villages, including Mundesley, Brampton and Southrepps, to its FTTP rollout. County Broadband is already working with 33 villages in the Breckland and South Norfolk areas. · 31 January MS3 announced that it has selected Nokia as a key technology partner as they look to bring full fibre connectivity to over 500,000 homes in Hull and other parts of Northern England. The Nokia ISAM 7360 FX OLT has been chosen and will be housed inside MS3’s street cabinets to light the fibre optic cables supplying broadband and ethernet services into homes and businesses via its wholesale ISP partners. The Nokia XS-010G-Q ONT will be the small demarcation device fitted in the home whilst the more powerful Nokia XS-010X-Q ONT will be used for business customers.
Other key news items throughout the month can be found below.
Policies, Studies, Survey and Ofcom Announcements
· ISPs and Content Providers Respond to Ofcom’s UK Net Neutrality Review · Report Warns of Underinvestment in Rural Connectivity and Skills · End of BBC TV Licence Fee Raises Prospect of Broadband Tax Again · PAC Criticises UK Gov for Slow Rural Gigabit Broadband Progress UPDATE · Report Recommends Changes to Boost UK 5G and Gigabit Broadband · LibDems in New Push for Mandatory UK Social Broadband Tariffs · DCMS Committee Finds Online Safety Bill Gets the Balance Wrong
Devolved Nations (Northern Ireland, Scotland and Wales) Broadband Announcements
Mobile Broadband Announcements
· No Surprise as VOXI UK Confirms Return of EU Roaming Charges UPDATE · Mobile Operator Smarty Finally Launches 5G Service for the UK · Three UK Discounts 5G Unlimited Home Broadband to GBP21 · Vodafone Switches On UK’s First Scaled 5G Mobile OpenRAN Site · RootMetrics Benchmarks the Best UK Mobile Networks in H2 2021 · Mobile Operator EE UK Confirms Closure of 3G Signal Box Service · Vodafone UK Reveals Plan to Switch-Off 3G Network from 2023 · Vodafone UK Allegedly Expressed Interest in Three UK Merger · UK SPF Calls for Changes to Improve Spectrum Sharing for 5G