As we launch our first broadband factsheet today, I thought it would be a good opportunity to look at the market shares of the largest operators.
One of the purposes of the factsheet is to let people see the trends in the relative market shares and understand how providers are doing. We’ve included data over the last couple of years for the major providers:
BT seems to be performing strongly adding almost a million new users between September 2010 and March 2012 with only Sky showing a similar level of growth. Most users are likely to be making decisions based on bundled prices (something we hope to get more information on our broadband survey).
We are about to see a technology gap developing between BT’s investment in fibre-optic broadband and some of the other operators (Virgin Media being a notable exception). Over the last few years these operators have been building extensive Local Loop Unbundled (LLU) networks which has given them an edge over BT services as they’ve been able to provide faster services at lower costs. Without the same investment in fibre, BT is likely to strengthen its position.
It’s important to note that the BT numbers shown on this graphic are BT Retail numbers, however the lack of significant sub-loop fibre investment by the current ‘LLU operators’ (i.e. everyone other than BT and Virgin Media) means that other operators will lose one of the advantages over BT Retail.
The fibre services from BT are available via Openreach at a wholesale level, but not with the same degree of control that LLU operators currently have from running the active hardware. The volume of sales for TalkTalk and Sky fibre services is down in the 5,000 to 10,000 versus the over 500,000 of BT Retail. How TalkTalk and Sky market their fibre products will be crucial to competing with BT Retail, the traditional method of being cheaper than BT will be difficult to achieve.
It shall be interesting to see how these numbers develop over the second half of 2012. With the significant difference in user bases, Orange and O2/BE are going to find it more difficult to get the same economies of scale, although both may be able to take advantage of their mobile networks and offer integrated fixed/mobile broadband packages to protect their position.