2015 United Kingdom - Telecoms, IP Networks and Digital Media

UK’s telecom market bolstered by quad play efforts among telcos

The UK’s telecom market is characterised by fierce competition in the mobile and broadband sectors, and by an innovative broadcast sector which has pioneered business models for distributing digital content. Consumer prices across the board have fallen steadily in recent years, while network capabilities have been greatly expanded following recent investments by British Telecom and Virgin Media.

The mobile market is served by major providers with a significant international presence. Recent merger activity has seen dramatic consolidation in the market and has had knock-on effects for network infrastructure deals struck between them in recent years. Orange and T-Mobile merged to create EE, which is itself in the process of being acquired by the incumbent British Telecom, while early in 2015 H3 absorbed O2. A growing number of low-cost MVNOs provide effective price and service competition. The market has also been characterised by developments in advanced data services delivered over upgraded networks, the bundling of mobile as a quad-play service, and regulatory controls on charges and fees.

The UK’s mobile data market, based on extensive 3G and 4G networks, is one of the largest in Europe. Competition among network operators has induced them to provide similar pricing and usage models. This has substantially increased consumer use of mobile data. The market is in the process of radical change, with Hutchison 3G UK Holdings having been set up in March 2015 to incorporate 3UK and the newly acquired O2, and with BT’s £12.5 billion bid for EE being under regulatory and competition authority review. Low-key data applications such as SMS still dominate the data market while mobile TV, though widely available, has thus far failed to capture public attention. This report surveys the UK’s mobile data market, providing an overview of 3G, 4G and 5G developments, as well as an analysis of regulatory issues and technologies. It also profiles the major operators, presents statistics on non-voice services, and analyses developments in mobile TV and mobile application stores

The broadband market enjoys excellent cross-platform competition, with comprehensive DSL complemented by Virgin Media’s cable networks which provide data at up o 152Mbs. The company has embarked on a £3 billion investment program to improve and extend network capabilities, while its parent company Liberty Global has plans to trial DOCSIS 3.1 technology during 2016. The DSL network has been upgraded during the last few years as a result of BT’s migration to its new 21CN. Although the DSL subscriber base is falling as migration to fibre continues, BT is also trialling G.fast technology capable of delivering data at 1Gb/s and higher.

The broadband market remains fiercely competitive as a result of regulatory measures which provide competitor access to BT’s exchanges. A new wholesale access pricing regime was extended to BT’s fibre infrastructure in April 2015. These developments have seen a gradual increase in average data speeds, which by mid-2015 approached 23Mb/s.

This report analyses the key aspects of the UK’s telecom market, presenting statistics on the fixed network services sector and an overview of the key regulatory issues including the status of interconnection, local loop unbundling, and carrier preselection. The report also profiles the overall UK broadband market, covering broadband technologies and including the latest statistics, an update on recent commercial initiatives, an assessment of Next Generation Access, and forecasts to 2020. In addition the report surveys the digital media market, including analyses on the pay TV, cable TV and streaming media sectors. It also covers the mobile market, providing an overview of mobile statistics, regulatory issues, and emerging technologies.