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  • Jolanta Stanke & Arnold Kürsteiner

Fixed Broadband Subscriber Take-Up in the UK: Model and Key Findings


To receive the full report (free of charge) please contact isabelle.anderson@point-topic.com


Introduction

The Point Topic take-up model estimates fixed broadband market shares and subscriber numbers at the postcode level in the UK[1]. This approach is unique in that it provides a postcode-level output of market shares based on our granular UK-wide broadband availability datasets, ISP subscriber numbers, speed test data and demographic data. Our model covers all the main infrastructure operators and retail ISPs, including Openreach, BT, Sky, Virgin Media O2, TalkTalk, KCOM, altnets (alternative networks), and resellers as well as ADSL, DOCSIS 3.1, RFoG, FTTP, FTTC and GFast technologies[2].


As broadband take-up data by provider and technology is not available at postcode level, the model uses two different approaches to estimate this metric – the "benchmark" approach, which uses broadband availability data, and the "speedtest" approach, which uses both availability and speed test data. Both approaches use Point Topic’s datasets on provider presence across all UK postcodes to ensure market shares are constrained to areas with known provider presence. (See the Methodological Approach section for more details).

This report was generated in January 2023, with the market shares referring to Q4 2022. Our customers get model outputs updated more frequently. Subscribers to Point Topic’s ThinkPoint product can access the data sheets with market shares aggregated at regional, LA and LSOA level at no additional cost, as well as the full postcode model outputs for the “benchmark” and “speedtest” approach for an additional fee. Subscribers to the UK Plus product will be able to access the data sheets at regional, LA and LSOA level at no additional cost. The full version of this report is available free of charge.



Methodological approach

The aim of the take-up model is to estimate the number of broadband subscribers at the postcode level, using data on local demographics, broadband availability, and speed test results. We used two approaches: the "benchmark" approach, which relies only on broadband availability data, and the "speed test" approach, which uses both availability and speed test data. For both approaches, market shares are modelled at postcode level only across areas where Point Topic data indicates known provider presence.


For the benchmark approach, the provider market share is calculated by applying their UK-wide market share in proportion to the other providers present in the postcode. This market share is then distributed down to the postcode level. The data based on this approach can be used by ISPs to assess how close they are to the expected (modelled) market share in that postcode. Postcode-specific availability data and UK-wide subscriber numbers were sourced from Point Topic datasets and are as of Q4 2022 and Q3 2022, respectively.


For the speedtest approach, the market share is calculated using the number of speed tests (ST) carried out by customers of each provider in proportion to the number of speed tests carried out by customers of other providers in the exchange/MSOA intersection.

One of the limitations of this approach is its dependence on the number of customers interested in their broadband speeds as well as using the speed tests in general, and that it is to some extent affected by self-selection bias (one could assume either dissatisfied or happy users are most likely to test their broadband speed). Multiple speed tests from the same household could also be an issue. However, despite these limitations, we found the speed test approach broadly in line with our quarterly UK level broadband subscriber figures, sourced from operator announcements.


The data on speed tests was sourced from ThinkBroadband. A total of 1.9 million speed tests conducted in 12 months to January 2023 were included. The speed tests were somewhat concentrated, with 1.2 million postcodes out of the total of 1.7 million having no recorded tests. At the same time, dozens of speed tests were recorded in some postcodes. Although the number of speed tests is a limitation, this methodology is based entirely on ‘real-world’ data, and ThinkBroadband speed tests are generally known for an above average reliability in terms of geolocation, operator, and technology identification. Especially when aggregating the results at the LSOA or Local Authority (LA) level, a rather credible picture of market shares emerges. While the speedtest approach comes with its limitations, when these are taken into account it can prove a useful tool for understanding postcode-level take-up in the UK.


See full report for detailed methodology.


Take-up Model Outputs and Mapping

Our model includes outputs at both the infrastructure provider (wholesale) level and the ISP (retail) level. The model covers four technology groups for Openreach, BT, Sky, TalkTalk and Resellers (ADSL, FTTC, FTTP, Gfast) as well as altnet FTTP and KCOM FTTP. Virgin Media O2 is represented in our dataset as ‘Virgin Cable’[3].


 Table 1: Infrastructure/ISP and Technology Combinations Infrastructure Provider and Technology Combinations
Table 1: Infrastructure/ISP and Technology Combinations Infrastructure Provider and Technology Combinations

Key findings

Although the primary purpose of this model is to represent market shares at a postcode level, we can present key findings at various levels of geography by taking average market shares, weighted by the number of premises per postcode. As noted earlier in this report, benchmark approach market share aggregations are imprecise and should be considered mainly as indicative and relative to the speed test approach.


Technology market shares

Our model suggests that FTTP has significant market shares in Northern Ireland, Yorkshire and the Humber, the Southwest, and London. DOCSIS 3.1 and RFoG are most prominent in London, the West Midlands, the Northeast, and the Northwest, with low presence in Wales. Despite Virgin Media O2’s network upgrade to ultrafast speeds and ambitious high investment projects by Openreach and altnets to roll out full fibre, FTTC still has dominant market shares in all regions.


Figure 1: UK Regional Market Shares by Technology Group – Q4 2022
Figure 1: UK Regional Market Shares by Technology Group – Q4 2022

Gigabit-capable Networks

High market shares of gigabit-capable lines[4] at LSOA level are less common in vast swathes of the Southwest, East of England, Northeast, Northwest, and Scotland, where more rural areas and lower average income do have an effect on both gigabit broadband availability and take-up.

 Figure 2: Market Share of   Gigabit Capable Lines as a Proportion of all Broadband Lines (LSOA) - Benchmark Approach   – Q4 2022
Figure 2: Market Share of Gigabit Capable Lines as a Proportion of all Broadband Lines (LSOA) - Benchmark Approach – Q4 2022
 Figure 3: Market Share of   Gigabit Capable Lines as a Proportion of all Broadband Lines (LSOA) – Speed   test Approach – Q4 2022
Figure 3: Market Share of Gigabit Capable Lines as a Proportion of all Broadband Lines (LSOA) – Speed test Approach – Q4 2022

Looking at specific retail providers at the local authority (LA) level, the top ten BT gigabit market shares[5] are in remote regions, where there is little competition from other providers, while lowest market shares are in attractive densely populated areas, primarily in London. Due to the monopoly of KCOM in Hull, BT has no broadband customers in the area.

Table 2: Top Ten BT Gigabit Market Shares by Local Authority (LA) – Q4 2022 Benchmark
Table 2: Top Ten BT Gigabit Market Shares by Local Authority (LA) – Q4 2022 Benchmark

Table 3: Bottom Ten BT gigabit Market Shares by Local Authority (LA) – Q4 2022 Benchmark
Table 3: Bottom Ten BT gigabit Market Shares by Local Authority (LA) – Q4 2022 Benchmark

Top ten gigabit market shares of altnets are broadly the inverse of BT. Affluent, urban areas are prime targets for altnets to deploy their FTTP networks, and this is where they have their highest market shares.


Mapping outputs in the capital, for example, show strong dominance of altnets in the gigabit market, with hotspots in Central London and affluent areas like Canary Wharf and Kensington. BT’s share of the gigabit market is comparatively low across London.


Figure 4: Altnet Market Share of   Gigabit Capable Lines (LSOA) - Benchmark Approach –   London – Q4   2022
Figure 4: Altnet Market Share of Gigabit Capable Lines (LSOA) - Benchmark Approach – London – Q4 2022
Figure 5: Altnet Market Share of   Gigabit Capable Lines (LSOA) – Speed test   Approach – London – Q4 2022
Figure 5: Altnet Market Share of Gigabit Capable Lines (LSOA) – Speed test Approach – London – Q4 2022

 

To get the full report (free of charge) please contact isabelle.anderson@point-topic.com

[1] From now on, ‘broadband’ in this report will refer to fixed broadband [2] For brevity, we will be using the term ‘providers’ to denote both infrastructure owners and retail ISPs, except where specified [3] ‘Virgin Cable’ refers to DOCSIS 3.1 or RFoG (Radio Frequency over Glass) technologies, which are currently supplied to end-users by Virgin Media O2. Although able to match the performance of FTTP, the technologies differ and not all DOCSIS 3.1/RFoG users will reach comparable bandwidths. [4] As a proportion of all broadband lines. [5] BT FTTP lines as a proportion of all gigabit lines (FTTP lines plus Virgin Media O2’s DOCSIS 3.1 and RFoG lines).


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