Posted: 14th Jan, 2009 By: MarkJ
The latest research from
Point Topic has revealed that uptake of UK broadband services have been more seriously impacted by the looming recession than first thought. The country added roughly 200,000 lines in Q4-2008, which is less than half what was forecast for the period before the recession set in and 100,000 less than October's updated forecast.
These figures would appear to support the National Institute for Economic and Social Research (NIESR) estimates, which reported that the UK economy shrank by 1.5% in Q4. However with most of the increase coming from dialup migrations it's believed that the total number of land-line Internet access customers may have actually declined.
Overall
Point Topic estimates that the total number of broadband lines in the UK rose to about 17.23 million by the end of 2008, from 17.04 million in the previous quarter:
Within that total it looks as if
BT and its resellers are suffering most. The ISPs using local loop unbundling to provide their broadband services (mainly Carphone Warehouse, Sky,
Tiscali and
Orange) did relatively well, adding nearly 430,000 lines between them.
Point Topic estimates that
Virgin Media may have added about 60,000 cable modem customers as well.
This leaves
BT Wholesales broadband business losing upwards of 290,000 lines, a fall of over 3% on the 8.2 million lines it was supplying at the end of September. The main reason is probably the drive to save money as users churn to the low cost bundles offered by
Virgin Media and the
LLU operators.
These estimates are supported by earlier predictions from
Ofcom's recent Q2-2008 Telecommunications Market Data Tables (
here) and The Office of National Statistics Q3 results (
here). The ONS in particular showed a decline in overall Internet connections of -0.4% for the period, though none of these reports seem to factor in
Mobile Broadband uptake, which has been very strong.
To say that quarterly broadband additions are reduced by 10% for every -0.3% decline in the economy as a whole is probably simplistic but it provides one indication of what to expect in 2009.
Point Topic believes that, at its worst, UK land-line broadband should still grow by +0.9m and make it past 18m by the end of 2009.