Research Roundup June
INCA & Point Topic Annual Independent Sector Report, UK Q1 2022 Retail ISP and Network Operators Market Analysis, Global Fixed Broadband Take-up Forecasts to 2030, UK Digital Strategy plan, plus ISP, government, and Ofcom updates
Point Topic’s June publications featured the release of this year’s ‘Metrics for the UK independent network sector’ report compiled for the Independent Networks Co-operative Association (INCA) by Point Topic using data provided by independent network operators. Point Topic also released our Q1 2022 UK retail ISPs and network operators market analysis report, which provides a detailed view into the UK retail ISP and wholesale network operator broadband sector at the close of the quarter. We have also published our Global Fixed Broadband Take-up Forecasts by Technology for up to 2030: Fibre Rules, which provides a detailed overview of broadband take-up by DSL, FTTH/P/B, FTTC/VDSL, Cable and other technologies (mostly WiMAX, other wireless and satellite) for the period between Q4 2021 and Q4 2030.
On 13 June, DCMS released its UK Digital Strategy which outlines a new single vision from to grow the digital economy whist addressing tech sector skills, investment, and infrastructure. Supporting the expansion of the digital economy, the government reports, could grow the UK tech sector’s annual GVA by an additional £41.5 billion by 2025, and create a further 678,000 jobs.
Ofcom introduced new rules for mobile, broadband, landline and pay-TV contracts. The new regulations state that telecoms providers must provide consumers with a short and simple summary of key information before signing up for a new contract, including clear examples of how any price increases will affect the price they pay. Individual mobile, broadband, landline and pay-TV contract summaries should be no longer than one page, with bundled contract summaries to run no more than three pages.
The new rules are designed to assist consumers during the cost-of-living crisis by helping consumers being caught out by surprise price rises. The summary must include key information about the speed of the service, price, and length of the contract. It also requires firms to set out the terms and conditions if a customer decides to end their contract early.
Key findings and overviews of Point Topic reports can be found below and on our free analysis section. Full reports and supporting statistical analyses are available via our UK Plus subscribers service, sign-in here to access our UK Plus content.
INCA Point Topic Annual ‘Metrics for the UK Independent Network Sector’ Report 2022
Compiled for the Independent Networks Co-operative Association (INCA) by Point Topic using data provided by independent network operators, this year’s ‘Metrics for the UK independent network sector’ report shows that AltNets have increased their full fibre network footprints by 111% to reach 5.5 million homes and businesses throughout the UK with ambitions to pass around 11.6m premises by the end of the year. For the first time, AltNets are providing over 1m live connections with aims of increasing these to 10.3m by the end of 2025 (Figure 1).
The independent network sector has again doubled in size since last year with operators continuing to be a draw for private investment firms.Investment and expenditure commitments by the independent network sector is expected to reach £17.7bn by 2025 (Figure 2).
The report also outlines operators’ concerns with the top two being planning and street works delays along with the threat of overbuild from other operators through Project Gigabit procurements. In joint third place are delivery times for services from Openreach or other operators (e.g. EAD circuits, PIA); getting wayleaves; and BDUK’s pause on community-led ISPs Gigabit Vouchers affecting current and future deployments. There have been shifts in concerns however, with the sector’s top concern last year, obtaining wayleaves moving slightly down the list. Given the unprecedented amount of investment in the sector, access to finance moved down to the bottom of the list this year.
Key Findings:
· AltNet fixed full fibre network infrastructure is expected to reach over 11.5m premises at the end of 2022 with an estimated 1.4m live connections, with 10.3m expected by end-2025.
· By 2025 infrastructure competition will be in full swing with full fibre investment by the major suppliers, AltNets and government funding expected to reach £36.7 billion.
· The UK is on track, for the first time in its history, to have real broadband infrastructure competition, offering consumers real choice and drive innovation.
· Openreach’s long-term FTTP pricing offer (Equinox) which could substantially help Openreach overbuild existing AltNet networks and impact their deployment plans, particularly regarding wholesale was in the top five of sector concerns.
· Access to qualified skills and labour, particularly post-Brexit, was viewed as a very significant challenge by 29% of operators compared to 10% in the previous year.
· Most survey respondents (72%) reported that they were at the start of the migration process for implementing Ofcom’s ‘One Touch Switch’ system due to come into effect in April 2023, compared to 8% who were ‘substantially ready’.
UK Q1 2022 Retail ISP and Network Operators Market Analysis
Point Topic released its UK fixed line retail and wholesale network operator Q1 2022 statistics and market analysis report. In Q1 2022, along with reporting key metrics for the largest providers, Point Topic began reporting data for an additional 14 independent retail ISPs that range in size, coverage areas and types of consumer accesses (i.e. fibre to the premises, multi-dwelling units).
Four 'other' retail ISPs have also been included as they either resell services via Openreach, CityFibre (or both) and TalkTalk and whose key metrics provide further insight into the growing competitive landscape of the wholesale reseller infrastructure sector.
New inclusions listed under Retail ISPs are: Broadband for Rural North (B4RN), Community Fibre, Fibrus, G.Network, Gigaclear, Glide, Hyperoptic, Manx Telecom, Quickline, Toob, Trooli, Truespeed, Wight Fibre, and Zen Internet. New inclusions listed under ‘other’ are: BrawBand, Giganet, IDNet, and Shell Energy.
Key Findings:
· Total Q1 2022 FTTP, FTTx, cable, FWA/satellite and DSL wholesale connections (Figure 3) stood at an estimated 29.1m, up from 29m Q-o-Q and 28.3m Y-o-Y; with retail connections reaching an estimated 29.2m during Q1 2022, up from 29m Q-o-Q and 28.4m at the close of Q1 2021.
· BT’s fixed broadband Consumer net additions dropped by 24k in Q1 2022, the first quarter since Q2 2020 for the incumbent to experience a decrease in subscriber numbers.
· Openreach’s FTTP base has grown by 263k quarter-on-quarter, their largest ever quarterly increase and stood at 1.771m in Q1 2022 up from 1.508m in Q4 2021 and 905k year-on-year.
· At the close of Q1 we estimate that just over 54 per cent of lines live on the Openreach FTTx network belong to non-BT service providers.
· Virgin Media O2 (VMO2) saw their fixed segment showing a reduction in numbers from the previous quarter with their broadband net adds down by 1,000 from just over 60k in the previous.
· We estimate CityFibre to have just under 1.4m premises Ready for Service out of 1.5m premises passed at the close of Q1 2022.
· Sky UK remains the dominant player in its European operations, however Sky saw 101k net broadband losses throughout its European market.
· We estimate independent operators FTTx (pre-dominantly FTTP/B) ISPs subscriber numbers reaching around 2.782m at the close of Q1 2022.
Global Fixed Broadband Take-up Forecasts by Technology for up to 2030: Fibre Rules
The forecasts, which include data for the top 30 fixed broadband markets[1] and Rest of the World (ROW), are part of our Global Broadband Statistics (GBS) service. They are based on Point Topic’s extensive historical data on fixed broadband take up, the trends in subscriber churn for various broadband technologies, the size of the addressable market at country level, and current and planned network upgrades.
Our forecasts predict that at the end of 2030 there will be 1.6 billion fixed broadband subscribers worldwide compared to 1.27 billion in Q4 2021, up by 26%. Some 88 per cent of the fixed broadband subscribers will be in the top 30 broadband markets, ranked as such by the subscriber numbers recorded in Q4 2021.
We predict that by end-2030 some variant of fibre (FTTH/P/B) will be used by 75% of fixed broadband subscribers globally, compared to 62% in Q4 2021. In the same period, the share of DSL (ADSL) based subscriptions will drop from 10% to 4%, the share of cable – from 17.5% to 10%, while the shares of FTTC/VDSL based connections and of other technologies will remain largely stable at just above 8% and 2% respectively (Figure 4).
The complete forecast dataset is available to our GBS subscribers. Please get in touch if you are interested in subscribing to the service: isabelle.anderson@point-topic.com
Other key players announcements along with the month’s news round-up can be found below.
News Roundup
Openreach reported on 21 June that ultrafast FTTP broadband penetration in Norfolk had reached 25 per cent. However, the numbers are much lower in areas such as Kings Lyn and Norwich, where the number falls to around 10 per cent. In Kings Lynn, around 1,300 premises from a possible 11,900 have chosen to upgrade. And in Norwich that figure is just 2,000 from 20,000 currently using the new technology. VMO2 Business announced on 15 June that the supplier has signed a 10-year multi-million pound FTTP network infrastructure deal with Telford and Wrekin Council. VMO2 aims to connect 200 council premises and 12k premises. This new deal is in addition to VMO2’s plans to pass 66k premises in Telford and Wrekin as part of their previously announced full fibre rollout plans. The new network will provide VMO2 with further consumer and business opportunities, with the supplier planning on enabling additional wholesale connectivity partnerships within the area. In addition, a digital inclusion fund will be set aside for the council to improve residents’ access to digital services. To support young people in the area, especially those from disadvantaged backgrounds, VMO2 Business will work with the council and the local build partner, Comex 2000, to offer hands-on apprenticeship and work experience opportunities.
VMO2 reported on 1 June, that 39bn gigabytes of data had been used across Virgin Media O2 fixed and mobile networks since the company merged on 1 June 2021. This figure includes gigabyte usage across Virgin Media O2’s fixed (download and upload) and mobile (O2 and wholesale customers) network, as well as by Virgin Mobile customers. CityFibre (CF) announced on 2 June that it had secured a £4.9bn debt package comprising committed facilities of £3.9bn and an accordion facility of £1bn. The funding will allow the supplier to complete its full fibre network rollout to 8 million homes, 800k businesses, 400k public sector sites and 250k 5G access points by 2025. Furthermore, the funding will enable upweighted participation in BDUK’s ‘Project Gigabit’ rural programme. This new round of financing, noted by CF as, ‘one of Europe’s largest ever Full Fibre financings’, follows £1.125bn in equity investments that CityFibre has closed in the last ten months from two new investors, Mubadala and Interogo Holding as well as from existing investors Antin Infrastructure Partners and the Infrastructure business within Goldman Sachs Asset Management.
BT Group News
· 1 June – BT teams up with the Federation of Small Businesses (FSB) with launch of new partnership network for small firms (0-5 employees), with benefits including FSB members get up to £250 towards running social media and digital advertising campaigns through BT’s new Digital Marketing Hub, along with BT customers benefit from 15 per cent discount on FSB membership
· 21 June – Openreach announced NGA2007/22 Equinox special offer registration window reopening from 1 August 2022 for 1 month
· 21 June – Openreach announced ETH031/22 Excess Construction Charge (ECC) Fixed Fee; from 1 October 2022, the Excess Construction Charge (ECC) Fixed Fee will increase from £598 to £608
· 27 June – BT partners with charity Home-Start UK to offer 2,500 households with no connectivity free laptops and access to its Home Essentials social tariff and commits to supporting over 9,000 people by offering devices and connectivity to tackle the digital divide across the UK
· 28 June – BT Group has re-signed the U.K. Armed Forces Covenant, reaffirming their commitment to their former Armed Forces colleagues, our serving Reservists and their families
· 30 June – BT staff vote to strike over pay as Openreach prep contingency plan.
Virgin Media O2 (VMO2) News
· 1 June – Virgin Media O2- One Year On; Virgin Media and Telefónica O2 release update on operations to mark 1 year anniversary of the merger of the two operators.
· 30 June – VMO2 unveiled details of its burgeoning network of small cells across London; the converged operator has taken the lead on integrating small cells into its network, with more than 1,300 live sites across London, with sites deployed in key locations such as Southwark, Croydon, Camden and Westminster
CityFibre (CF) News
· 1 June – CityFibre wins FTTH Operator award at the 2022 FTTH Council
· 1 June – CF granted blanket wayleave agreement in Solihull gaining access to 4k Solihull Community Housing properties
· 7 June – CF awarded £23m Halifax network construction contract to Network Plus, with work set to commence later in the month the Queens Road area of the town. The town-wide rollout reaches completion in 2024
· 9 June – CF started construction of £30m Borough-wide FTTP network in St Helens; work has commenced in the Peasley Cross area and is being delivered by O’Connor Utilities Ltd with the project due to complete in 2025; launch retail ISP partners include Vodafone, TalkTalk and Zen
· 14 June – CityFibre announced village of Yaxley (Cambridgeshire) as next rollout location and has earmarked £2m for the project with retail ISP launch partner Vodafone, TalkTalk, Zen, IDNet and Giganet; CF has already passed 67k premises in neighbouring area of Peterborough
· 14 June – CF released update on putting pressure on improving Openreach’s PIA products
· 15 June – CF marked one year anniversary of its £21m Worcester rollout noting that Warndon, Redhill, Spetchley and Woodgreen are among the growing list of completed areas, with Ronkswood, Fernhill and Brickfields being next on the list; the town-wide rollout is due to complete in 2023; retail ISPs serving the town are Vodafone with some selected Vodafone Pro Broadband plans, TalkTalk, Zen and Giganet
· 27 June – CityFibre announced it is partnering with O’Connor Utilities Ltd (OCU) to launch the utility contractor’s first training facility in Sheffield, which will help people from across South Yorkshire to develop the skills they will need to begin a career in digital infrastructure construction. The training centre, which opens today in Newhall, Sheffield is part of a £250k investment by OCU to recruit new talent into the industry and grow its workforce to support CityFibre’s digital infrastructure rollout, which is currently in progress in Leeds, Wakefield, Rotherham, St Helens and Sheffield
· 30 June – CF announced it has extended its agreement with Yorkshire Housing, which began in 2021; to date CityFibre has installed full fibre broadband at 41 apartment blocks, with further work planned.
Independent Operators (AltNets) News
· 6 June – Alnwick-based rural ISP, Alncom, announced 10 Gbps full fibre network expansion plans for 25k premises in Northumberland, County Durham and the Scottish Borders; their network currently covers 7k premises and they recently connected their 1,000th subscriber
· 8 June – Netomnia announced further rollout locations throughout the month, including Dalton-in-Furness, Doddington, Oldham, and Tewkesbury
· 17 June – Hyperoptic announced has reached a new agreement with the Hillingdon Council in London, which will enable them to expand the reach of their FTTB network to cover over 11k social housing properties across the borough.
· 21 June – YouFibre’s 10 Gbps FTTP services go live in Barry, Wales; on 16 June YouFibre also announced that its services were available in Wakefield, Yorkshire
· 22 June – Voneus announced 9 further rural FTTP network expansion locations throughout Buckinghamshire
· 22 June – Jurassic Fibre reached 100k premises passed milestone; its network covers 20 towns in Cornwall, Devon, and Dorset with a further 10 locations to be added in the coming months; the supplier aiming to reach 500k premises by 2025
· 28 June G.Network signed master wayleave agreement with one of the UK’s largest housing associations, London & Quadrant (L&Q), which houses around 250k people in more than 110k homes, primarily across London and the South East
· 29 June – YouFibre announced that it has signed up its 10k customer; YouFibre is working with its network build partner Netomnia whose FTTP network footprint currently covers 130k premises up from 50k in September 2021
· 29 June – Zzoomm announced its multi-gigabit network is being rolled out in Sandbach, Cheshire as part of its continued expansion across UK market towns
· 29 June – Wessex Internet announced a further 1,110 homes and businesses in South Somerset will be added to its Connecting Devon and Somerset (CDS) rollout. The additional properties will be added to around 3,600 homes and businesses that Wessex Internet is already covering as part of its three-year contract awarded by CDS in 2020 - bringing the total to over 4,700.
· 30 June – Fibrus announced it has passed over 1500 homes and businesses in the rural parts of Fivemiletown, Northern Ireland; to date the supplier has passed just over 120k premises; Fibrus also announced a further 40 locations in Cumbria as part of its network expansion into northern England
Other key news items throughout the month can be found below.
Policies, Studies, Survey and Ofcom Announcements
· DCMS Policy Paper - Plan for Digital Regulation: Developing an Outcomes Monitoring Framework
· DCMS - Future Tech Forum Chair’s report
· David Willis to lead Ofcom’s work managing the UK’s airwaves
· Ofcom urges tech firms to keep women safer online
· Ofcom publishes Tech Tracker 2022 results
· Ofcom UK Review Telesat’s Planned LEO Satellite Broadband Network
· Ofcom – More UK Spectrum for Satellite Broadband as Starlink Expand
· Court Ruling Brings Clarity to UK Telecoms Disputes Over Rents and Wayleaves
· Broadband Stakeholder Group Replaced by UK Digital Connectivity Forum
· Broadband ISPs and Mobile Operators Agree UK Cost-of-Living Plan
· Uswitch Claims 11 Million UK People Hit by Major Broadband Outages
Devolved Nations (Northern Ireland, Scotland and Wales) Broadband Announcements
Mobile Broadband Announcements
[1]Excluding Ukraine and Russia, due to the uncertainty of the consequences of their ongoing military conflict. They are included in ROW.
If you are a subscriber to UK Plus, sign-in here to access our UK Plus content where you can view our updated Q2 2022 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.