Market Research Logo

United Kingdom - Telecoms, IP Networks, Digital Media and Forecasts


Attention: There is an updated edition available for this report.

UK's superfast’ broadband delivery on rack, but insufficient

BuddeComm's half-yearly publication, UK - Telecoms, IP Networks and Digital Media, provides a comprehensive overview of the trends and developments in the telecommunications and digital media sectors in this key European market, including the regulator’s market data to 2011, telcos’ financial and operating data to June 2012 and market developments to mid-2012.

Economic background

The UK has suffered from lower economic output for three of the last five years. Economic data in the second quarter of 2012 showed the economy was sliding into a significant double-dip recession, with GDP likely to reach only 0.2% for 2012. With a stalled construction industry, a 1.2% fall in industrial production between the first and second quarters of 2012, and a 1.4% fall in manufacturing, the economic output is now almost 5% lower than in early 2008. This is having a dire effect on consumer spend in all sectors.

Telecom market overview

The UK’s telecom market has not been unscathed by the global economic downturn. Total telecom revenue fell in 2011 for the third successive year. A slight climb in retail revenue in the broadband, mobile data and corporate sectors was offset by larger falls in from fixed calls and access. The TV market shows the greater promise for revenue growth in 2013, though overall telecom revenue during the next two years will be stagnant. This will challenge operators financing network upgrades.

Mobile market

The mobile phone sector is one of the key drivers in the UK’s telecoms market. Mobile data use now accounts for only a small fraction of IP traffic but this will grow rapidly in coming years through the combination of upgraded networks making data more readily accessible, the proliferation of cheaper data plans and the wider availability of more capable handsets. The sector accounts for about 50% of total telecom revenue, and this may reach 55% for 2012.

UK 's; Key telecom parameters – 2010; 2012
Sector | 2010 | 2012 (e)

Subscribers to telecoms services (million):

Fixed broadband | 19.1 | 21.2
Fixed lines | 33.4 | 33.0
Mobile telephony | 81.1 | 83.3

Penetration of telecoms services:

Fixed-line telephony | 54% | 51%
Fixed-line broadband | 31.9% | 34.2%
SIM (population) | 134% | 141%
(Source: BuddeComm)

Market Highlights

By mid-2012 there were more than 100 fibre projects in the UK, from the big players including BT and the Fujitsu/Virgin Media partnership to small scale builder-owner projects such as B4RN. Together, these are deploying large-scale FttH networks, though the emphasis from BT remains with FttC.

Recent network sharing deals between O2 and Vodafone match the T-Mobile and Orange tie-up as Everything Everywhere. The development means that the UK’s emerging LTE infrastructure is likely to be provided by only two groupings of operators. This will lower infrastructure costs and support wider geographic coverage in the long-term.

The auction for 4G spectrum, delayed to early 2013, may mean that the UK as no commercial LTE service until at least 2014, far later than many other European markets.

DTTV is nearly complete, with London the most recent region to end analogue transmissions. The availability of sub-GHz spectrum for other uses may also include the 700MH band.

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:

Market liberalisation and regulatory issues;
The impact of the global economic crisis;
Telecoms operators – privatisation, acquisitions, new licences;
Mobile data market developments in coming years in light of spectrum auctions and new license awards;
3G developments, regulatory issues and technologies including HSPA and LTE;
Broadband migration to an FttH architecture;
Historical and current subscriber statistics and forecasts;
ARPU statistics and forecasts.

Data in this report is the latest available at the time of preparation and may not be for the current year.


1. Key Statistics
2. Telecommunications Market
2.1 Economic climate
2.2 Overview of the UK’s telecom market
3. Regulatory Environment
3.1 History
3.1.1 Revised NFR
3.2 Regulatory authority
3.2.1 Office of Communications (Ofcom)
3.2.2 Ofcom’s strategic review
3.2.3 Digital Economy Act 2010
3.3 BT’s functional separation
3.3.1 Openreach
3.4 Telecom sector liberalisation in the UK
3.4.1 Privatisation of British Telecom
3.4.2 Interconnect
3.4.3 Access
3.4.4 Number Portability (NP)
3.4.5 Carrier PreSelection (CPS)
3.4.6 Wholesale Line Rental (WLR)
4. Fixed Network Operators
4.1 New regulations
4.2 British Telecom
4.2.1 Company restructure
4.3 KCom
4.4 Cable & Wireless (C&W)
4.5 Virgin Media
4.6 COLT Telecom
4.7 Carphone Warehouse
4.8 Orange
4.9 BSkyB
5. Telecommunications Infrastructure
5.1 National telecom network
5.2 Next Generation Networks
5.2.1 BT’s 21CN
5.3 International
5.3.1 Submarine cable networks
5.3.2 Satellite networks
6. Broadband Market
6.1 Overview
6.1.1 Broadband statistics
6.1.2 Emerging trends
6.1.3 Government support
6.2 Cable modems
6.3 Asymmetrical Digital Subscriber Line (ADSL)
6.3.1 DSL providers
6.3.2 ADSL2+
6.3.3 SDSL
6.3.4 Very High Data Rate DSL (VDSL)
6.4 Fibre-to-the-Home (FttH) networks
6.4.1 BT
6.4.2 Virgin Media/Fujitsu
6.4.3 KCom
6.4.4 Other developments
6.4.5 Costing fibre
6.5 Broadband Powerline (BPL)
6.6 Wireless broadband
6.6.1 Regulatory environment
6.6.2 Spectrum auctions
6.6.3 WLAN/WiFi
6.6.4 WiMAX
6.6.5 Mobile broadband
6.6.6 Internet via satellite
7. Digital Media
7.1 Overview of digital media
7.2 Key general trends
7.3 Business models – bundled offers
7.4 Regulator issues
7.4.1 Ofcom
7.4.2 Digital Dividend Review
7.4.3 Digital switchover licensing
7.5 Digital TV (DTV)
7.5.1 Broadband TV (IPTV)
7.5.2 Cable TV
7.5.3 Satellite TV
7.5.4 Digital Terrestrial TV
7.5.5 Video-on-Demand (VoD)
7.5.6 VoIP
8. Mobile Communications
8.1 Overview of the UK’s mobile market
8.1.1 Mobile statistics
8.1.2 Operator market shares
8.2 Regulatory issues
8.2.1 Spectrum regulations and spectrum auctions
8.2.2 Roaming
8.2.3 Number portability
8.2.4 Mobile termination rates (MTRs)
8.3 Major mobile operators
8.3.1 Hutchison 3
8.3.2 O2
8.3.3 Vodafone
8.3.4 Everything Everywhere
8.3.5 Mobile Virtual Network Operators (MVNOs)
8.4 Mobile voice services
8.4.1 Prepaid cards
8.5 Mobile Data Market
8.5.1 Overview
8.5.2 Spectrum
8.5.3 Operator services – 3G
8.5.4 Mobile Messaging
8.5.5 Mobile data services
9. Forecasts
9.1 Forecasts – Broadband subscribers – 2007 - 2012; 2020
9.1.1 Scenario 1 – higher broadband subscriber growth
9.1.2 Scenario 2 – lower broadband subscriber growth
9.2 Forecasts Mobile
9.2.1 Forecasts – mobile ARPU - 2007 - 2010; 2015; 2020
9.2.2 Forecasts – mobile subscribers and penetration – 2010 – 2016
9.2.3 Forecasts – UMTS – 2007 - 2010; 2015
10. Glossary of Abbreviations
List of Tables, Charts and Exhibits
Table 1 – Country statistics – 2012 (e)
Table 2 – Telecom revenue and investment statistics – 2012 (e)
Table 3 – Telephone network statistics – 2012 (e)
Table 4 – Internet user statistics – 2011
Table 5 – Broadband statistics – 2012 (e)
Table 6 – Mobile statistics – 2012 (e)
Table 7 – National telecommunications authority
Table 8 – Telecom sector investment – 2007 - 2012
Table 9 – Share of fixed-line and mobile connections by operator – 2006 - 2009
Table 10 – Household penetration of fixed and mobile services – 2006 - 2012
Table 11 – Communications retail revenue by sector – 2003 - 2012
Table 12 – Retail voice and data revenue – 2003 - 2012
Table 13 – Household spend on telecoms services – 2005 - 2011
Table 14 – Communications revenue by sector – 2003 - 2012
Table 15 – Communications wholesale and retail revenue – 2005 – 2012
Table 16 – Call volumes, fixed-line and mobile in minutes – 2003 - 2012
Table 17 – Proportion of calls made, fixed-line and mobile – 2006 - 2012
Table 18 – Telecom retail revenue by sector: fixed, mobile – 2002 - 2012
Table 19 – Telecom connections: fixed, mobile, broadband – 2002 - 2012
Table 20 – Fixed telecoms revenue by type – 2007 - 2012
Table 21 – Household penetration by telecom technology – 2003 - 2004; 2006 - 2011
Table 22 – Adoption of telecoms technology – March 2012
Table 23 – Revised LLU, shared access prices – 2009 - 2012
Table 24 – Proposed wholesale charges by sector – 2008 - 2011
Table 25 – Proportion of unbundled exchanges and connections – 2005 - 2010
Table 26 – BT LLU, shared wholesale lines – 2004 - 2012
Table 27 – Lines with CPS – 2004 - 2012
Table 28 – WLR lines – 2004 - 2012
Table 29 – Fixed-voice traffic by type in minutes – 2002 - 2012
Table 30 – Fixed telecom lines by type – 2005 - 2010
Table 31 – Fixed telecom lines by operator – 2005 - 2010
Table 32 – Fixed-voice and data retail revenue – 2006 - 2013
Table 33 – Fixed-voice revenue by call type – 2002 - 2012
Table 34 – BT share of residential call types by traffic volumes – 2002 - 2011
Table 35 – BT retail fixed voice call traffic – 2008 - 2012
Table 36 – BT fixed lines – 2008 - 2012
Table 37 – BT financial data – 2006 - 2012
Table 38 – BT revenue by operating division – 2007 - 2012
Table 39 – BT retail revenue by sector – 2007 - 2012
Table 40 – KCom revenue – 1999 - 2010
Table 41 – Cable & Wireless financial data – 2010 - 2012
Table 42 – Cable & Wireless subscribers by sector – 2007 - 2009
Table 43 – Virgin Media revenue – 2003 - 2012
Table 44 – Virgin Media revenue by sector – 2006 - 2012
Table 45 – Virgin Media subscribers by sector – 2007 - 2012
Table 46 – COLT financial data – 2006 - 2012
Table 47 – Carphone Warehouse Europe revenue, profit – 2008 - 2012
Table 48 – Orange broadband subscribers – 2004 - 2011
Table 49 – BSkyB voice customers – 2006 - 2012
Table 50 – Fixed lines in service and teledensity – 1999 - 2012
Table 51 – Forecast NGA coverage – 2009 - 2012
Table 52 – Fixed-line broadband retail revenue – 2001 - 2012
Table 53 – Broadband connections by type – 2002 - 2012
Table 54 – Internet connections by consumer group – 2003 - 2010
Table 55 – Market share of broadband subscribers by type – 2002 - 2009
Table 56 – Share of fixed and mobile broadband subscribers by provider – 2006 - 2010
Table 57 – Market share of fixed-line broadband subscribers by provider – 2005 - 2011
Table 58 – Broadband penetration by technology – 2004 - 2012
Table 59 – Cable and DSL broadband subscribers – 2004 - 2013
Table 60 – Dial-up internet subscribers – 2004 - 2013
Table 61 – Percentage internet access by dial-up and broadband – 2000 - 2012
Table 62 – PC, broadband and internet household penetration – 2003 - 2012
Table 63 – Value of e-commerce sales – 2007 - 2012
Table 64 – Household broadband penetration by access type – 2007 - 2012
Table 65 – Internet daily traffic – 2007 - 2012
Table 66 – Consumer broadband download speed by market share – 2005 - 2009
Table 67 – Average broadband speed and cost – 2006 - 2012
Table 68 – Superfast broadband subscribers and market share – 2010 - 2012
Table 69 – BT Openreach full LLU lines – 2009 - 2011
Table 70 – Virgin Media ARPU – 2007 - 2012
Table 71 – xDSL subscribers – 2000 - 2012
Table 72 – BT retail and wholesale broadband subscribers – 2004 - 2012
Table 73 – BT retail and wholesale revenue – 2009 - 2012
Table 74 – FttC availability and projected speeds by distance – 2012
Table 75 – Household availability of BT FttC network – 2010 - 2014
Table 76 – Household superfast broadband availability by technology – 2010 - 2012
Table 77 – Estimated cost of fibre by deployment technology – 2012
Table 78 – Mobile broadband subscribers – 2008 - 2013
Table 79 – Broadband take-up by technology – 2005 - 2012
Table 80 – Availability of digital services (UK) – 2008 – 2010; 2012
Table 81 – Adoption of services – 2009 - 2012
Table 82 – Broadcast HD homes by provider – 2006 - 2011
Table 83 – Proportion of bundled services by type – 2009 - 2012
Table 84 – Proportion of homes with bundled services by type – 2011 - 2012
Table 85 – Virgin Media proportion of bundled subscribers by type – 2007 - 2012
Table 86 – Virgin Media bundled services subscribers by type – 2007 - 2012
Table 87 – TV revenue – 2000 - 2012
Table 88 – Multichannel take-up in UK households – 2006 - 2011
Table 89 – Market share of TV homes by platform (primary sets) – 2005 - 2012
Table 90 – Digital TV uptake, share of main TV sets – 2006 - 2010
Table 91 – Online TV revenue by sector – 2004 - 2011
Table 92 – BT Vision subscribers – 2007 - 2012
Table 93 – Free-to-view satellite households - 2003 - 2012
Table 94 – BSkyB subscriber statistics – 2007 - 2012
Table 95 – BSkyB annualised ARPU – 2005 - 2012
Table 96 – BSkyB revenue, operating profit and EBITDA – 2007 - 2012
Table 97 – DTTV equipment sales – 2006 - 2010
Table 98 – Freeview enabled TVs – 2004 - 2012
Table 99 – Virgin Media VoD use – 2007 - 2011
Table 100 – Virgin Media HD V+ base – 2008 - 2011
Table 101 – VoIP users as percentage of total internet subscribers – 2005 - 2012
Table 102 – Call volumes, fixed-line and mobile in minutes – 2003 - 2012
Table 103 – Mobile call revenue by operator – 2002 - 2010
Table 104 – Mobile retail revenue by service – 2002 - 2012
Table 105 – Mobile revenue as proportion of total – 2002 - 2011
Table 106 – Mobile handset sales – 2005 - 2012
Table 107 – Mobile network operator subscribers – Jun 2012
Table 108 – Mobile subscribers and SIM penetration rate – 1995; 1997; 1999 - 2012
Table 109 – Mobile subscribers by type – 2005 - 2011
Table 110 – Percentages of mobile and fixed phones in homes – 2000 – 2012
Table 111 – Mobile subscribers by operator (regulator data) – 2000 - 2010
Table 112 – Mobile retail revenue by operator – 2000 - 2010
Table 113 – Total mobile retail revenue – 2009 - 2012
Table 114 – Mobile ARPU by use (data, SMS, voice) – 2005 - 2010
Table 115 – Mobile ARPU by contract, prepaid – 2006 - 2012
Table 116 – Average retail revenue by subscribers, operator – Q4 2008 - Q4 2010
Table 117 – Mobile market share by operator – 2004 - 2011
Table 118 – Mobile subscriber market share by technology: 2G and 3G – 2004 - 2012
Table 119 – European roaming charges – 2007 - 2011
Table 120 – MTRs by operator (pence per minute) – 2010 - 2015
Table 121 – 3 UK subscribers by sector – 2008 - 2012
Table 122 – 3 UK revenue by sector – 2008 - 2010
Table 123 – 3 UK annualised ARPU by sector – 2009 - 2011
Table 124 – 3 UK data as proportion total revenue – 2009 – 2011
Table 125 – O2 financial data –2007 - 2012
Table 126 – O2 quarterly ARPU – blended, contract, prepaid and data – 2006 - 2012
Table 127 – O2 proportion of data to total revenue – 2006 - 2012
Table 128 – O2 subscribers, prepaid and contract – 2005 - 2012
Table 129 – Vodafone ARPU – blended, contract and prepaid – 2005 - 2012
Table 130 – Vodafone (UK) subscribers and proportion prepaid – 2001 - 2012
Table 131 – Vodafone (UK) financial data – 2008 - 2012
Table 132 – Vodafone customer churn – 2007 - 2012
Table 133 – Vodafone Group revenue by sector – 2007 - 2012
Table 134 – Vodafone UK service revenue by sector – 2009 - 2012
Table 135 – Vodafone mobile customer retention cost – 2007 – 2012
Table 136 – Everything Everywhere quarterly financial data – 2009 - 2012
Table 137 – Everything Everywhere ARPU – 2009 – 2012
Table 138 – Everything Everywhere subscriber data – 2009 - 2012
Table 139 – Everything Everywhere monthly customer churn – 2010 - 2011
Table 140 – T-Mobile financial data (historic) – 2005 - 2010
Table 141 – T-Mobile subscribers (historic) – 2005 - 2010
Table 142 – Orange subscribers, contract and prepaid (historic) – 2006 - 2010
Table 143 – Orange subscribers by type, 3G, MVNO (historic) – 2007 - 2010
Table 144 – Orange revenue (historic) – 2005 - 2010
Table 145 – Orange customer churn (historic) – 2003 - 2009
Table 146 – Orange data revenue as proportion of total (historic) – 2007 - 2009
Table 147 – Orange annualised ARPU by category (historic) – 2006 - 2010
Table 148 – Orange mobile customer acquisition and retention cost (historic) – 2007 - 2009
Table 149 – MNO and MVNO share of subscribers – 2004 - 2011
Table 150 – Virgin Mobile subscribers – 2005 - 2012
Table 151 – Virgin Mobile revenue – 2005 - 2012
Table 152 – Prepaid and contract subscribers – 2002 - 2012
Table 153 – Contract proportion of total subscribers – 2002 - 2012
Table 154 – ARPU by subscription type – 2002 - 2012
Table 155 – 3G subscribers and percentage of total subscribers – 2003 - 2012
Table 156 – 3G licence results – April 2000
Table 157 – 3G subscribers by operator – 2005 - 2011
Table 158 – SMS messages sent – 2004- 2013
Table 159 – SMS and MMS revenue by operator – 2006 - 2010
Table 160 – SMS and MMS volumes by operator – 2006 - 2010
Table 161 – MMS messages sent – 2006 – 2013
Table 162 – Mobile data traffic and revenue increase– 2007 - 2012
Table 163 – Mobile data revenue by service – 2005 - 2012
Table 164 – Mobile broadband accesses by technology – 2007 - 2012
Table 165 – UK mobile advertising spend by type– 2009 - 2010
Table 166 – Smartphone sales and penetration – 2007 - 2012
Table 167 – M2M derived revenue – 2010 - 2012
Table 168 – Forecast broadband subscribers – higher market growth scenario – 2007 - 2012; 2020
Table 169 – Forecast broadband penetration – higher market growth scenario – 2007 - 2012; 2020
Table 170 – Forecast broadband subscribers – lower market growth scenario – 2007 - 2012; 2020
Table 171 – Forecast broadband penetration – lower market growth scenario – 2007 - 2012; 2020
Table 172 – Forecast mobile ARPU – 2007 - 2010; 2015; 2020
Table 173 – Mobile subscribers and SIM penetration rate – 2010 - 2016
Table 174 – Forecast UMTS subscribers – 2007 - 2012; 2015
Chart 1 – Communications retail revenue by sector – 2003 – 2012
Chart 2 – Retail voice and data revenue – 2003 – 2012
Chart 3 – Communications revenue by sector – 2003 – 2012
Chart 4 – Communications wholesale and retail revenue – 2003 – 2012
Chart 5 – Call volumes, fixed-line and mobile in minutes – 2003 – 2012
Chart 6 – BT financial data – 2006 - 2012
Chart 7 – BT revenue by operating division – 2007 – 2012
Chart 8 – Virgin Media revenue by sector – 2006 – 2012
Chart 9 – Virgin Media subscribers by sector – 2007 – 2012
Chart 10 – COLT financial data – 2006 - 2012
Chart 11 – Carphone Warehouse Europe revenue, profit – 2008 – 2012
Chart 12 – Broadband connections by type – 2002 – 2012
Chart 13 – Internet connections by consumer group – 2003 - 2010
Chart 14 – Market share of broadband subscribers by type – 2002 - 2009
Chart 15 – Cable and DSL broadband subscribers – 2004 - 2013
Chart 16 – BT retail and wholesale broadband subscribers – 2004 - 2012
Chart 17 – BT retail and wholesale revenue (year to Mar) – 2009 - 2012
Chart 18 – Virgin Media bundled services subscribers by type – 2007 - 2012
Chart 19 – BSkyB subscriber statistics – 2007 – 2012
Chart 20 – BSkyB revenue, operating profit and EBITDA – 2007 - 2012
Chart 21 – DTTV equipment sales – 2006 - 2010
Chart 22 – Call volumes, fixed-line and mobile in minutes – 2003 – 2012
Chart 23 – Mobile call revenue by operator – 2002 – 2010
Chart 24 – Mobile retail revenue by service – 2002 – 2012
Chart 25 – Mobile subscribers and SIM penetration rate – 1995; 1997; 1999 – 2012
Chart 26 – Mobile subscribers by type – 2005 – 2010
Chart 27 – Mobile ARPU by use (data, SMS, voice) – 2005 – 2010
Chart 28 – 3 UK subscribers by sector – 2008 – 2012
Chart 29 – 3 UK revenue by sector – 2008 - 2010
Chart 30 – 3 UK ARPU by sector – 2009 – 2011
Chart 31 – O2 financial data –2007 - 2012
Chart 32 – O2 annualised ARPU – blended, contract, prepaid and data – 2006 – 2012
Chart 33 – O2 subscribers, prepaid and contract – 2005 – 2012
Chart 34 – Vodafone ARPU – blended, contract and prepaid – 2005 – 2012
Chart 35 – Vodafone (UK) subscribers and proportion prepaid – 2001 - 2012
Chart 36 – Vodafone (UK) financial data – 2007 – 2012
Chart 37 – Vodafone Group revenue by sector – 2007 – 2012
Chart 38 – Vodafone UK service revenue by sector – 2009 – 2012
Chart 39 – Everything Everywhere quarterly financial data – 2009 – 2012
Chart 40 – Everything Everywhere ARPU – 2009 - 2012
Chart 41 – Everything Everywhere subscriber data – 2009 - 2012
Chart 42 – Prepaid and contract subscribers – 2002 – 2012
Chart 43 – 3G subscribers and penetration rate – 2003 - 2012
Chart 44 – SMS and MMS revenue by operator – 2006 - 2010
Chart 45 – SMS and MMS volumes by operator – 2006 – 2010
Chart 46 – Smartphone use and penetration – 2007 - 2012
Chart 47 – Forecast broadband subscribers – higher market growth scenario – 2007 - 2012; 2020
Chart 48 – Forecast broadband subscribers – lower market growth scenario – 2007 - 2012; 2020
Exhibit 1 – EU – The New Regulatory Framework (NRF)
Exhibit 2 – Principal submarine cables from the UK
Exhibit 3 – Wireless opportunities using technology and frequencies
Exhibit 4 – Spectrum auction results 10GHz – February 2008
Exhibit 5 – WLAN operator business models – 2012
Exhibit 6 – Overview of digital media
Exhibit 7 – Operators’ service bundling offers – 2012
Exhibit 8 – Technology developments in bundled services – 2012
Exhibit 9 – Snapshot of digital TV services and providers – 2012
Exhibit 10 – Digital broadcasting switchover timetable – 2008 – 2012
Exhibit 11 – Popular VoIP providers – 2012
Exhibit 12 – Spectrum available for mobile services
Exhibit 13 – 3G licensee and infrastructure suppliers

Download our eBook: How to Succeed Using Market Research

Learn how to effectively navigate the market research process to help guide your organization on the journey to success.

Download eBook

Share this report