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  • Veronica Speiser

The UK’s TV, Streaming and Broadband Market: cost of living crisis challenging bundled synergies

With full fibre[1] networks passing 41% of UK premises and with nearly 2 million of those having access to two or more independent network providers[2], consumers now have unprecedented access to a range of competitively priced ultrafast broadband packages. However, the uptake of full fibre services especially those combined with a TV bundle are yet to make any impressive inroads in the consumer marketplace.


In November 2022, Point Topic commissioned YouGov to conduct a survey on video, ISPs, broadband speeds and fibre to the home (FTTH) connectivity.[3] This market research serves as an update on the UK pay-TV and broadband sector previously carried out in March 2022, with the findings being published on 9 May 2022 in The UK’s television market past, present and future.


Key findings

  • Broadband suppliers have been investing billions in full fibre networks and promoting fibre superiority, but struggle with significant returns or uptake in FTTH services (Figure 1)

  • The term full fibre continues to confuse consumers as 61% of survey respondents subscribing to Virgin Media O2’s (VMO2) DOCSIS 3.1 gigabit capable service stated they were on a FTTH connection

  • Ultrafast and gigabit capable speed tiers fail to impress subscribers with 31% of survey respondents taking a superfast (25 – 100 Mbps) package, moreover 44% stated that they did not know which speed tier they were subscribed to

  • For those respondents subscribing to an FTTH service, speed packages of up to 100 Mbps dominated (Figure 2)

  • Sky and Virgin Media continue to lead the broadband and pay-TV bundled services market, with 65% of Sky subscribers taking a bundled package followed by VMO2’s 52% and BT with 28% (Figure 3)

  • For those who do take a bundled service 63% of VMO2’s subscribers stated they were on a ‘full fibre’ connection compared to 42% of BT Group’s (BT, EE and Plusnet) bundled package consumer base having an FTTH connection (Figure 4)

  • TV and video services are an important part of a consumer’s life, however a pay-TV or subscription to more than one on demand service can be perceived as an unnecessary monthly expenditure as 55% of respondents stated they did not take a bundled package.

Larger players remain popular but take up of ultrafast full fibre products remain challenging


BT Group, Virgin Media O2 (VMO2), Sky, and TalkTalk continue to dominate the market with most (76%) of our online survey respondents subscribing to one of the big four suppliers. However, considering the amount of investment and full fibre networks expansion, conversion to FTTP services has plenty of room for growth. Over one third (36%) of respondents surveyed were unsure as to whether their broadband connections are based on full fibre technology indicating a market that has yet to fully get to grips with the technology or the terminology.


Figure 1: Gigabit-capable services (FTTH/P, DOCSIS 3.1) connectivity by Internet service provider[4]

*Virgin Media O2’s gigabit-capable connectivity is delivered through DOCSIS 3.1 and FTTH/P technologies

†Others include figures for Hyperoptic, KCOM, Shell Energy Broadband and ‘Other


Results indicated that 61% of VMO2’s subscriber base are on an FTTH service, however it underscores the point above about whether these subscribers are interpreting VMO2’s gigabit-capable DOCSIS 3.1 services as a full fibre product. Thirty eight per cent of BT’s subscribers said they were on an FTTH service compared to 31% who were not and 31% who did not know what type of connection they were using. Given that the incumbent’s FTTP network covers 8.76 million premises at the close of Q3 2022, along with BT’s controversial 9.3% broadband price increase introduced in April 2022, the supplier’s FTTP offering still has some way to go in enticing consumers to take-up the service or educating customers who are on full fibre and don’t know it about the technology they are using and its benefits.


Full fibre connections dominated by less than impressive speed tiers


Considering the size of BT’s FTTP footprint along with its heavy marketing campaigns for its ultrafast full fibre services, it has not made a huge impression with survey participants as only 28% were on a 101 Mbps or greater package. Thirty-seven per cent of respondents were on a superfast 25 Mbps – 100 Mbps speed tier, followed by a third (33%) not knowing their downlink speed and 2% on a tier of speeds of up to 24 Mbps.


Looking at the ‘Others’ category which is comprised of Shell Energy Broadband (which resells Openreach’s FTTP services), multi-dwelling unit focused FTTP provider Hyperoptic, Hull-based incumbent KCOM, and other smaller independent operators or nationwide resellers such as Zen Internet, faster packages are the more attractive option.


Figure 2: Subscribers to an ISP’s FTTH broadband packages by speed[5]

*BT Group includes BT, EE and Plusnet figures

**Virgin Media O2’s gigabit-capable connectivity is delivered through DOCSIS 3.1 and FTTH/P technologies

†Others include figures for Hyperoptic, KCOM, Shell Energy Broadband and ‘Other’

TalkTalk has been listed separately, however only 47 respondents were on a FTTH package


Sky and Virgin Media O2 getting their curated TV service offerings right


Although Sky subscribers may not be flocking to their full fibre services they do clearly value its TV content and streaming services packages. The same can be said of Virgin Media O2’s (VMO2’s) premium TV content coupled with its superior speeds where its entry-level package offers subscribers 125 Mbps compared to BT’s superfast 35 Mbps and Sky’s 56 Mbps, both which are delivered via FTTC.


BT who has struggled over the years with its TV division is still not making a significant impact on its subscribers, with 28% of respondents taking a bundled service.


Figure 3: Broadband and TV bundled subscribers, by ISP[6]

*Others include figures for Hyperoptic, KCOM, Shell Energy Broadband and ‘Other’


Uptake of bundled services waning and consumers none the clearer on what full fibre is


Looking at the survey data of those respondents who said their broadband connection was supplied via FTTH technology and filtering it down further to those that also take a TV bundled service, VMO2 leads the table with 63% stating they were on an FTTH package. Again, VMO2’s fixed network is predominately DOCSIS 3.1 which, although capable of gigabit speeds, is quite different from a fibre optic cable being supplied directly to the premises.


Figure 4: Proportion of (perceived) full fibre (FTTH) broadband and TV bundled services uptake, by ISP[7]

*BT Group includes BT, EE and Plusnet figures

**Virgin Media O2’s gigabit-capable connectivity is delivered through DOCSIS 3.1 and FTTH/P technologies

†Others include figures for TalkTalk, Vodafone, Hyperoptic, KCOM, Shell Energy Broadband and ‘Other’


Out of the survey participants that subscribed to a Sky bundled service, nearly 41% (40.6%) stated they were on an FTTH package. Worth noting is that Sky’s website does not make it very clear for consumers as to which technology their broadband will be supplied with. It uses the terms superfast, ultrafast, and ‘gigafast’ whilst highlighting speeds but not technology. In fact, it states ‘superfast, super-reliable broadband with speeds of up to 500 Mbps’[8] and when looking for full fibre ‘gigafast’ information subscribers need to read the fine print.


Forty two per cent of the survey’s BT Group’s (BT, EE and Plusnet) bundled TV package subscribers were on an FTTH connection with the bulk of the respondents subscribing to a BT retail service as opposed to one of its subsidiaries.


 

The full report along with the complete survey data can be accessed via our subscribers site.

[1] We define full fibre networks and connectivity as being fixed broadband connections using fibre optic technology directly to the home (FTTH), premises (FTTP) or building (FTTB). For brevity, we will be using FTTP and ‘ full fibre’ interchangeably to denote FTTP/H/B variants. [2] Point Topic, Ultrafast broadband premises passed in the UK: October 2022, 18 November 2022. [3] All figures, unless otherwise stated, are from YouGov Plc. Total sample size was 2033 adults. Fieldwork was undertaken between 8th - 9th November 2022. The survey was carried out online. The figures have been weighted and are representative of all GB adults (aged 18+). [4] The corresponding table of survey results outlining FTTH (as perceived by consumers) connectivity by ISP can be found in Appendix 2 of the full report. [5] The corresponding table of survey results outlining FTTH broadband subscription speed tiers by ISP can be found in Appendix 4 of the full report. [6] The corresponding table of survey results outlining take-up of bundled broadband and TV services by ISP can be found in Appendix 3 in the full report. [7] The corresponding table of survey results outlining take-up of FTTH bundled broadband and TV services by ISP can be found in Appendix 3 in the full report. [8] Sky UK Broadband Deals as listed on its website on 15 December 2022.

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