Research Round-up October 2022
Ultrafast UK sector updates, Global broadband subscribers metrics Q2 22, Project Gigabit progress, ISP news, government and Ofcom updates
Point Topic’s key publications of the month:
Ultrafast Broadband Premises Passed in the UK end-August 2022
Point Topic’s latest update since April 2022, with the analysis based on the ThinkPoint broadband availability dataset which includes 1.7m postcodes.
Summary of key findings:
At the close of August 2022,
FTTP network coverage reached 38% of UK premises; 30% of premises did not have access to gigabit capable broadband. This figure was 48% in Wales and 48% in Scotland.
Across the UK, around 1.6m premises had access to two or more independent fibre ISPs and more than 800K premises could choose between three, with Peterborough being top of the charts in this category.
Gigabit broadband adoption rate varied between 3% and 55% among various ISPs.
In 27% of local authorities the FTTP coverage was lower than 20% of premises. It was 50% or higher in 23% of local authorities (Figure 1).
We found 851,000 additional FTTP Openreach premises in the four months to the end of August 2022, which equates to our total Openreach FTTP network coverage of 7.8 million premises (24% of all UK premises).
We found only 108k additional VMO2 gigabit premises between the end of April 2022 and August 2022 on top of their 16m premises already covered; with just over a million RFOG premises passed, VMO2 are the third largest FTTP network operator in the UK after Openreach and CityFibre.
Independent providers have continued their rollouts at pace, CityFibre leads the way with 1.5m FTTP premises covered by end-August 2022; Hyperoptic followed with over 0.7m premises passed, closely followed by Community Fibre with almost 0.7m; Gigaclear and Netomnia (YouFibre) are approaching 0.25m premises.
Gigabit-capable UK: transformation through regulation and reform
Since our last report published in October 2021, the UK’s telecoms sector has seen significant progress in terms of nationwide gigabit-capable fixed broadband coverage. According to the Department for Digital, Culture, Media & Sport’s (DCMS) latest Project Gigabit update report, published on 30 August 2022, nationwide gigabit-bit capable broadband coverage has increased from 42% to nearly 70% coverage year-on-year at the close of August. However, this coverage is certainly not uniform throughout UK, especially in terms of rural versus urban network footprints along with full fibre access in the devolved nations, such as Scotland and Wales, where rural rollouts have proved more difficult.
Commercial rollout of gigabit capable broadband is expected to cover 80% of the UK by 2025, with BDUK focusing on subsidising the final 20%, predominately in rural or hard to reach areas. Several new legislative initiatives have been introduced over the past year to propel the rollout of a nationwide gigabit-capable digital infrastructure. Additionally, telecommunications regulator, Ofcom, has also introduced key regulations to protect the consumer, promote competition within a highly saturated broadband supplier market, and support the government’s legislations.
Key Policy, Regulatory and Public Sector Updates October 2021 – October 2022:
BDUK ‘soft launches’ new Project Gigabit National Rolling Open Market Review (NR-OMR) process to confirm where gigabit-capable broadband infrastructure currently exists or is planned to be built in the UK over the next three years.
UK government published its Levelling Up the United Kingdom White Paper which included tackling the urban and rural digital divide and called for a more technologically varied approach to connecting the 0.3% of very hard to reach UK premises.
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.100k remote premises.
Ofcom’s Plan of Work for 2022/23 was published on 25 March and listed as its top priority the continued investment in resilient, high-quality, mobile and broadband networks whilst closing the connectivity divide amongst lower socio-economic classes.
Ofcom published its Future Approach to Mobile Markets comments paper on 9 February in order to obtain feedback on its regulatory approach over the next five to ten years; followed on 31 March with its first ever Spectrum Roadmap: Delivering Ofcom’s Spectrum Management Strategy (Figure 2).
On 13 June, DCMS released its UK Digital Strategy which outlined a new single vision to grow the digital economy whist addressing tech sector skills, investment, and infrastructure.
The BDUK’s 2021 to 2022 Performance Report summarised the project’s progress to date.
On 22 October, the New build developments consultation: delivering gigabit-capable connections - government response was published setting out minimum speeds and technical guidelines for new developments in England, with some rural areas possibly gaining access to the USO of 10 Mbps.
Global Broadband Subscribers Q2 2022
The global fixed broadband subscriber growth was lowest in the last six quarters as the world faces economic slowdown.
By the end of Q2 2022, the number of global fixed broadband connections grew by 1.34% and stood at 1.32bn. The growth rates varied across different markets, with 13 countries reporting a decline in fixed broadband subscriptions. We recorded the churn mainly in the emerging markets, where mobile networks are the dominant platform for accessing the internet.
Main trends in Q2 2022:
Fixed broadband subscriber numbers fell in 10% of the 129 countries covered in this report (Figure 4).
The share of FTTH in the total fixed broadband subscriptions continued to increase and stood at 59.1%. Superfast and ultrafast cable broadband connections followed with a 16.8% share, while ADSL fell to 9.6%.
In 12 months between Q2 2021 and Q2 2022, the number of copper lines fell by 9.5%, while FTTH connections increased by 13.1%.
China added 12 million fibre broadband subscriptions in Q2 2022, with Brazil, India and France adding almost 1 million each.
BDUK Project Gigabit Updates
On 20 October BDUK awarded local AltNet provider, that it had awarded local supplier, GoFibre, whose parent company is Borderlink Broadband, the Lot 34.01 North Northumberland contract. The £7.3m project will cover around 3,750 premises in the area.
The project will cover towns, villages and hamlets across the area including premises near to Berwick-upon-Tweed and Wooler, subject to further survey completion. The contract has been signed and planning is now underway, with construction due to begin in Spring 2023.
On 5 October BDUK closed the Public Reviews process for the following Project Gigabit intervention areas: Herefordshire (Lot 15), Cheshire (Lot 17), Gloucestershire (Lot 18), and Lincolnshire (including NE Lincolnshire and N Lincolnshire) and East Riding (Lot 23).
On 7 October it published its next batch of Public Reviews for the following areas with the consultation period closing on 4 November: Birmingham and the Black Country (Lot 35), Cornwall and Isles of Scilly (Lot 32), Devon and Somerset (Lot 6), Dorset (Lot 14), Essex (Lot 21), Greater London (Lot 37), Merseyside and Greater Manchester (Lot 36), Newcastle and North Tyneside (Lot 38), Northern North Yorkshire (Lot 31).
For the first time, BDUK have introduced urban areas into the Public Reviews programme with London, Greater Manchester, Birmingham, and Newcastle having areas identified as requiring intervention. However, the extent of the intervention programmes are yet to be determined and may also come into conflict with how Ofcom define ‘rural’ areas. The Open Market Reviews identified a possible 1.7m London premises that would not be covered by gigabit capable broadband, followed by 570k in Merseyside and Greater Manchester, 208k in Birmingham, and just over 71k in Newcastle.
Other key telecoms sector news items from the month can be found below.
BT Group News
3 October – BT Group unveiled AI Accelerator to shorten rollout of new Artificial Intelligence from six months to six days. 3 October – Openreach announced (ETH041/22) a £3 per month price increase EAD 10Mb and EAD 100Mb rental charges. These price increases will apply to all product variants – Local Access, Standard, Extended Reach, RO1 and EAD-Sensitive (including Local Access and Extended Reach) ad take effect from 1 January 2023. 12 October – Openreach published general briefing GEN074/22 providing an update for tranche 6 and informed all CPs of the realignment of 32 exchanges from tranches 7, 8, 9 and TBD, along with notification of tranche 6, 51 FTTP priority exchanges, stop sell implementation 1 November 2022. 12 October – EE launched new Connected Laptop for small firms to run and grow their business – all from one place. 12 October – Openreach published GEN073/22briefing to inform all CPs of the minimum 12 months’ notification of product stop sell to be activated in the tranche 10 FTTP priority exchange locations bringing the total of notified exchanges to 672 including the Salisbury trial site. 18 October – BT Group provided historical pro forma to reflect formation of Sports Joint Venture between BT Sport and Eurosport UK. 18 October – BT Group recruited Ab Initio to deliver smart, automated data management at scale on its path to becoming an AI-led business. 20 October – Openreach announced it has provided FTTP connectivity to historic island of Lindisfarne in Northumberland. 24 October – Openreach published GEN077/22which outlined price changes to GEA-FTTP and FVA replacement of damaged or missing ONTs that will come into effect from 21 November 2022. This price change supersedes the GEA-FTTP and FVA replacement of damaged or missing ONT price increases previously announced on 23 August 2022. 24 October – 40k members of the Communications Workers Union (CWU) carried out their eighth day of all-out strike action due to what the CWU called the, ‘steadfast refusal of BT Group to reconsider the real-term team member pay cuts that have triggered the first national industrial action in BT Group for 35 years.’ 26 October – BT opened state-of-the art Cyber Security Operations Centre in Belfast. 27 October – BT Group to benefit from greater energy efficiency as EE and Ericsson revamp 5G radio network. 28 October – BT published its Report on progress against the Broadband USO. By the end of September 2022, BT had built a USO connection to over 5900 premises, with more than 2000 further builds in progress. This report is our fourth broadband USO progress update, covering the period between 1 April and 30 September 2022. 29 October – According to the Financial Times, BT Group plan on introducing Equinox 2, which would see a further reduction in wholesale costs to resellers using Openreach’s full fibre network. The reduction in costs for the switchover of copper to fibre customers for resellers such as Sky, would be between £30 and £37. BT plan on submitting its proposal to Ofcom in December for approval.
Virgin Media O2 (VMO2) News
6 October – VMO2 announced the introduction of a series of measures to bolster its support for employees during the cost-of-living crisis, with a new targeted support payment alongside flexible leave policies as part of its ambition to become a more inclusive and equitable company. 10 October – VMO2 announced that for four days only, it is giving new Virgin Media customers the chance to have their bill covered for up to three months by pocketing £200 bill credit when they sign-up to Bigger Movies, Bigger Sports or the Ultimate Volt bundle. 11 October – Virgin Media O2 announced that it has reduced its social tariff package cost, Essential Broadband, by 16% to combat the cost-of-living crisis and to make broadband more accessible. The monthly subscription has been reduced to £12.50 per month for speeds of up to 15 Mbps. A new, faster tier called ‘Essential Broadband Plus’ will also launch in November that will deliver speeds of 50 Mbps for just £20 per month. All Essential Broadband products come with no fixed-term contract and no activation fees. 13 October – The 5G DRIVE (Diversified oRAN Integration & Vendor Evaluation) project led by Virgin Media O2 and part-funded by the DCMS has completed its first trials, which saw the consortium successfully trial a new secure network connection capability for integrating private and public networks to form a network of networks. 18 October – VMO2 announced that customers who take M350, M500 or Gig1 broadband only packages can get Stream with no activation fee, saving subscribers £35. The service includes savings on subscription services including BT Sport, Sky Sports and Sky Cinema. 19 October – Virgin Media O2 Business launched national public sector partnership programme to tackle the digital divide – as research finds five million Brits unable to carry out simple tasks online. 26 October – Media outlets have reported that parent companies of Virgin (Liberty Global) and O2 (Telefonica) are considering selling their 50% stake in mobile mast operator Cornerstone. The sale, worth an estimated £10bn would fund VMO2’s FTTP network rollout plans to a further 5m premises by 2026. 29 October – The Telegraph reported that the proposed £3bn takeover talks of TalkTalk have been dropped by the two providers, with VMO2 citing market and regulatory uncertainties. 31 October – VMO2 passed its 1 million milestone to its combined Volt package, the company’s first joint product following its £31bn merger in June 2021; following its success it also launched the service for business customers on the same day
CityFibre (CF) News
6 October – CF announced its network expansion plans into Maidstone, Kent, investing £50m into the rollout project. 12 October – YouFibre, which has been closely linked with Netomnia has signed up as a reseller of CityFibre’s network in Middlesbrough (North Yorkshire). 25 October – CF announced it has appointed Kelly Group as its preferred supplier for customer connections across CityFibre’s nationwide full fibre rollout to up to 8 million homes. To date CityFibre and Kelly Group have achieved an industry-leading 91% ‘Right First Time’ (RFT) score for customer connections across the country. 28 October – CF announced that it has signed a reseller agreement with London-based newcomer ISP Octaplus with the agreement including exclusive long-term volume commitments across CityFibre’s full fibre network. 28 October – CF adds Loughborough to its network expansion plans.
Independent Operators (AltNets) News
3 October – FWA providers Curvalux and Cambridge Broadband Networks Group (CBNG) announced their merger. The two companies will remain independent with CBNG becoming a subsidiary of Curvalux. 3 October – Vodafone the UK’s third largest mobile provider confirms it is in formal merger talks with Three, the UK’s fourth largest provider. The merger would make it the largest provider with more than 27m subscribers. The proposed structure would see Vodafone Group owning a 51% stake of the combined business with CK Hutchison (Three) owning 49%. 4 October – Plusnet announced that it will no longer be offering new customers its John Lewis brand managed broadband and phone services, with the service to eventually close. The move comes as Plusnet’s parent company, BT Group, assess Plusnet’s future with the aim of making EE te provider’s main consumer broadband brand. 4 October – Nokia announced it will expanding its partnership with Hyperoptic as they will be deploying Nokia’s 800GE-capable 7750 SR-s routers, which are powered by its FP5 routing silicon, a critical enabler for building higher-capacity IP networks that consume significantly less power per bit. 4 October – Welsh-based provider, Beacons Telecom, have announced they are on target to pass 15k rural premises by the end of 2022 with their FTTP network. Deployment areas include Govilon, Gilwern, Crickhowell, Coed-y-Paen, Glascoed, Bwlch, Llangynidr, Clydach, Glangrwyney, Maesygwartha, Pentre’rfelin, Pentrebach and Llandeilo’r Fan. 7 October – Netomnia, support by its retail ISP, YouFibre, claimed to be the first AltNet supplier with a presence in all four UK countries. The announcement came with the commencement of its FTTP network in Northern Ireland’s Londonderry, which will cover 43k premises in the town. Netomnia’s FTTP network already covers 265k premises and is live in 35 towns and cities across the UK. 7 October – Hybrid FWA and FTTP provider, Rural Broadband Solutions Holdings Limited (RBBS) announced that it has received a £75m investment package from Tiger Infrastructure Partners. The investment will further extend RBBS’ network coverage in Shropshire (England) and Wales where it will continue to sell its services via ISP SWS Broadband. 10 October – TalkTalk-backed, Freedom Fibre, announced its first move into Wales as it begins its £14m FTTP rollout in Wrexham. 10 October – London-based, Community Fibre, signed a new finance facility of £985m which will enable the company to continue to execute its rapid roll out of its FTTP network to 2.2m London homes by the end of 2024. Community Fibre has 675,000 ready for service homes in London and the South East. The £985m is made up from £685m committed facilities with a further £300m uncommitted accordion. Community Fibre were advised by Rothschild & Co. 11 October – Netomnia announced several new network expansion locations including Tunbridge Wells (Kent), Burntwood (West Midlands), Morriston (Swansea), Neath (North Port Talbot), Newport (Wales), Livingston (Scotland), Sleaford (Lincolnshire), and Huntington (Cambridgeshire). 11 October – Toob celebrated its 3rd anniversary by announcing it had passed the 10k customer milestone. 12 October – Hyperoptic celebrated its 11th anniversary this week and offered the longest serving subscribers with 11 months free broadband. It aims to pass 1m premises by Christmas and now has 250k active FTTP subscribers, reaching more than a 25% penetration rate. 13 October – Neos Networks announced the completion of its 275km full fibre network project across Aberdeen city and the wider Aberdeenshire region. The project connects Aberdeen, Westhill, Stonehaven, Banchory, Inverurie and Ellon as well as the smaller communities in between. The new network will provide services to some 192 public sector buildings, and be within reach of nearly 46k homes and businesses. The project is the result of a combined regional investment of £10.5m including contributions from the UK and Scottish governments. 14 October – Fibrus released an update on its build progress across its commercially funded and subsided programmes in Northern Ireland and the North of England, at the end of September 2022, it had passed 190,000 premises and remains on target for a total of 250,000 by the end of this financial year (Mar 23). On Project Stratum, the company remains ahead of schedule having now delivered over 50% of the contracted premises. 17 October – Rural hybrid FWA and FTTP network provider, Quickline, announced the creation of its new 16 member Infrastructure Team, which will be responsible for the building of fibre networks in parts of North and West Yorkshire and Lincolnshire. 17 October – F&W Networks announced it has received an undisclosed investment sum from Foresight Group LLP to further support its FTTP rollout in 21 communities in the South of England, including Surrey, Oxfordshire, Buckinghamshire, Hertfordshire, Greater London and West Sussex. Its network covers 185k premises. 18 October – Quickline in partnership with Cellnex UK have extended its 5G broadband wireless network coverage to 53k premises in hard to reach areas including the Yorkshire Moors. 21 October – WightFibre announced symmetrical 100 Mbps full fibre social tariff Essential Broadband package for £16.50 per month and reported to be the first provider using the Department for Work and Pensions online eligibility checker to expediate social tariff service applications. 26 October – Giganet who acquired Cuckoo in September, announced it will be investing £20m to expand its FTTP network to 18,500 premises in Hurstpierpoint and Storrington (West Sussex). 31 October – Neos Networks announced further expansion plans to 10k additional premises in Perth, Scotland. 31 October – Brsk announced their Black Friday promotion of offering subscribers in Bradford, Accrington, Burnley and South Manchester 50% of their FTTP broadband subscriptions for one year, with a 100 Mbps service costing £12.50 per month and 1 Gbps for £22.50.
6 October – Ofcom published its Connected Nations Autumn 2022 update. The reported covered the period to May 2022 and stated that almost 20.2 million homes (68% of all UK homes), up from 19.3 million (66%) have access to gigabit capable broadband since their last update (December 2021). Full fibre coverage reached 37% from 33% in the four months between January 2022 and May 2022, with just over 11 million homes now covered 7 October – Inverness and Highland City-Region Deal: Digital Project Public Review launched. 11 October – TechUK published its report of its findings in its review of the government’s progress on ultrafast 5G and fixed fibre network coverage. The report focuses on the progress made since the publication of the Future Telecoms Infrastructure Review. 13 October – UK Labour Party published its 3 point plan to ease the cost of living crisis for those struggling to pay broadband charges by ceasing mid-contract price rises, easing termination fees and introducing an industry-wide social tariff. 14 October – A new state-of-the-art UK Telecommunications Lab will be based in Solihull, creating dozens of high-skilled jobs for the region, Tech Minister Damian Collins has announced. The lab will help new businesses enter the UK telecoms market by testing to ensure equipment is fully ‘interoperable’, meaning it can connect to kit supplied by different manufacturers, which is increasingly important to the government’s £250 million strategy to diversify the UK 5G telecoms market. 14 October – TalkTalk announced the finalisation of the acquisition of SSE Phone and Broadband’s 135k customers from OVO Energy. 17 October – TalkTalk launched TalkTalk TV Hub. Available as a limited release to customers on Full Fibre packages, the new box offers over 70 live TV channels, catchup services including BBC iPlayer and ITV Hub, a huge range of streaming & subscription services including Netflix, Prime Video and NOW TV, plus Google Play with over 10k apps, all for only £5 a month, with a £25 one-off fee. TalkTalk plans to roll out the new box to more customers over the coming months. 21 October – Ofcom proposed to revise its guidance on how the ‘net neutrality’ rules should apply in the UK. This follows the announcement of our new programme of work to ensure that digital communications markets are working well for people and businesses in the UK. 21 October – Ofcom published its Home Broadband Performance report, revealing that the median average speed of a home broadband connection has reached 59.4 Mbps. That’s an 18% increase from 50.4 Mbps the previous year, and a 60% increase on the average speed recorded in 2018 (37 Mbps). 26 October – The World Broadband Association (WBA), a multilateral and industry-led association, published its Next Generation Broadband Roadmap report stating that residential fixed broadband speeds will be capable of 50 Gbps with enterprise downlink speeds reaching 3.2 Tbps. 27 October – Utility Warehouse and TalkTalk new, long-term five year agreement underpinning substantial growth and acceleration of full fibre. 27 October – EE begins deployment of Ericsson’s Massive MIMO radio equipment across key UK sites, accelerating 5G deployment using Ericsson’s ultra-lightweight antenna-integrated radio (AIR 3268) and is delivering a reduction in energy consumption of up to 40 per cent. 31 October – TalkTalk announced it will be ending its trial (launched in 2015) of 944 Mbps Ultra Fibre Optic (UFO) broadband service in the City of York, due to its ‘equipment being obsolete.’ The service was originally launched in partnership with Sky and will be replaced by its FTTP offering in the area.
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. CityFibre themselves reported 1.7m RFS premises in August 2022. See the earlier footnote about our lag behind operator announcements. DCMS, Policy Paper: Project Gigabit Delivery Plan - summer update 2022, 30 August 2022. It is possible there will be restatements in the coming quarter/s and single period data should be viewed in that light.
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