Last updated: 13 Sep 2010 Update History
Report Status: Archived
Report Pages: 113
Analyst: Henry Lancaster
Publication Overview
This report provides a comprehensive overview of trends and developments in the UK’s telecoms market, with full analyses of the mobile, Internet, broadband, digital TV and converging media sectors. Subjects include:
Researcher:- Henry Lancaster
Current publication date:- September 2010 (9th Edition)
Next publication date:- September 2011
Executive Summary
BuddeComm’s annual publication, UK - Telecoms, IP Networks, Digital Media and Forecasts, provides a comprehensive overview of the trends and developments in the telecommunications and digital media markets in UK.
The UK’s telecom market has not been unscathed by the global economic downturn, which has pushed the economy into one of the deepest recessions experienced by any European country. Whereas GDP growth was above 5% throughout 2007 and the first three quarters of 2008, it has since plummeted to barely 0.5% in the six quarters to June 2010. Overall revenues in the telecom sector fell 2.3% year-on-year in 2009. Competition continued to drive down prices, but the effect on real monthly household spend on telecom services is negligible: according to the regulator, monthly spend on communications accounted for 4.4% of total household spend in 2009, compared to 4.5% in 2003.
Investment in the telecom sector has also been affected by the economic climate, as declining revenue for telcos combines with a liquidity market which is expected to remain problematic into 2011. This will dampened their ability to fund network investment during the next two years, leading them concentrating their efforts in core areas: upgrading cable and fibre networks, and widening software upgrades on mobile networks for LTE and HSPA+ technologies. In the face of diminishing mobile voice revenue, mobile network operators (MNOs) are united in promoting technologies to stimulate and support high-end mobile data use among consumers.
Fixed-line penetration is being buoyed by consumer adoption of VoIP services, generally offered as a bundle, while mobile penetration has increased to the extent that by mid-2010 about 18% of households relied on mobile-only access, compared with only 6% in 2001. Average residential broadband speeds exceeded 8Mb/s in 2010, though achieved speeds are commonly only 40% of advertised speeds. There remain numerous areas unserved by cable and where DSL is impractical due to the distance from exchanges. To this end the UK’s 2010 Digital Economy Act has set in train a number of policies and objectives to secure a minimum broadband service nationally by 2015.
The mobile market in mid-2010 underwent one of the more significant shifts in recent years with the merger of T-Mobile and Orange as the joint venture (JV) Everything Everywhere. Hitherto, four of the five MNOs enjoyed similar market shares while H3 has been rapidly catching up in terms of subscriber numbers. The new JV has created a single player holding 42% share of subscribers compared to 27% for its nearest rival O2 and 23% for Vodafone. Given Orange’s existing broadband and fixed-line services interests, the JV will thus be well placed in coming years to develop and promote quad-play services. It is anticipated to be a licensee of 2.6GHz and 800MHz spectrum, and so from early 2012 will be well placed to gear up its mobile broadband offerings based on LTE technology.
The digital TV market remains among the most competitive in Europe, with both free and pay satellite services competing against a range of platforms providing IPTV and VoD services. New developments such as Project Canvas have incorporated the talents and programming from the main broadcasters. By mid-2010, digital TV was adopted by 92% of households, while analogue switch-over (ASO) is on schedule for early 2012.
UK – Key telecom parameters – 2009 – 2011
Sector |
2009 |
2011 (e) |
Broadband: |
||
Fixed broadband subscribers (million) |
18.1 |
20.2 |
Fixed broadband penetration rate |
29% |
34% |
Mobile broadband subscribers (million) |
9.6 |
17.6 |
Subscribers to telecoms services: |
||
Fixed-line telephony (million) |
32.1 |
32.1 |
Mobile phone (million) |
80.0 |
86.0 |
Mobile penetration (population) |
131% |
137% |
(Source: BuddeComm based on industry data)
This report is essential reading for those needing high level strategic information and objective analysis on the telecom sector in the UK. It provides further information on:
Data in this report is the latest available at the time of preparation and may not be for the current year.
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