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BT’s Fibre Broadband Penetration is Still Under 14%

1 February 2014 by Dr Mark Heath

Mark HeathBT has just announced its results for the third quarter to the end of December 2013, and they show continued progress in the roll-out of superfast fibre broadband, as shown in the figure, below.

BT announced that it had passed more than 18 million premises in the UK with its fibre broadband network by the end of December 2013.

Fibre broadband availability

BT fibre broadband availability (as a proportion of premises)

The figure above shows that BT’s progress has been steady and consistent, and looks to be on course for exceeding 90% fibre broadband penetration by the end of 2015. Note that fibre penetration is not the same as superfast broadband penetration since premises with access to fibre broadband may not necessarily be able to get superfast (24Mbps+) download speeds (as speeds are dependent on the distance from the fibre street cabinet as described in our article Chart of BT fibre broadband speed against distance from the cabinet).

Perhaps of most significance is the take-up of fibre broadband among premises that have access to fibre broadband services. As shown in the figure below, while there is a definite growth trend evident, take-up still remains under 14%. The vast majority of premises still rely on conventional ADSL and ADSL2+ broadband technologies. So BT, ISPs and local authorities leading BDUK-related projects really do need to focus on demand stimulation activities.

This is particularly the case for local authorities that have incorporated pay-back mechanisms into their contracts where BT will pay back money to authorities if fibre broadband take-up exceeds certain levels. High take-up in subsidised areas would also help local authorities to justify the large investments that have been made at a time when their budgets have been under severe pressure and some important services have been cut.

Take-up of fibre broadband

Take-up of fibre broadband (as a proportion of the homes passed with fibre broadband)

During 2013, BT’s fibre broadband rollout was dominated by its commercial roll-out, which is now drawing to a close, while BDUK-related roll-outs will now gather pace. BT reported that it had already secured 46 regional broadband contracts, with roll-out commenced in 36 areas. With these projects, around 170,000 premises have already been passed. This represents just less than 1% of the total number of premises passed with fibre broadband but it is obviously early days.

Fibre broadband street cabinet

BT’s retail broadband arm has been gaining a very large market share of fibre connections despite BT Wholesale providing access to other ISPs. Since BT has secured all BDUK-related contracts so far (effectively preventing other network providers from entering the market), competition can now only occur at the retail level. At the end of December 2013, BT had 1.9 million retail customers, representing about 79% of the total number of premises connected to its fibre network. This is a very high market share for an incumbent operator.

 

Demand stimulation activities from other ISPs and local authorities will be important over the next two years to raise awareness that fibre broadband services are available from a wide range of ISPs. This would help to ensure a competitive market place for superfast broadband.

Filed Under: Superfast broadband

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