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United Kingdom - Telecoms, IP Networks and Digital Media

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.


  • EXECUTIVE SUMMARY
  • KEY STATISTICS
    • Table Country statistics - 2015 (e)
    • Table Telecom revenue and investment statistics - 2014 (e)
    • Table Telephone network statistics - 2014 (e)
    • Table Internet user statistics - 2014
    • Table Broadband statistics - 2014 (e)
    • Table Mobile statistics - 2015 (e)
    • Table National telecommunications authority
  • TELECOMMUNICATIONS MARKET
    • ECONOMIC CLIMATE
    • OVERVIEW OF THE UK'S TELECOM MARKET
      • Table Household penetration of fixed and mobile services - 2006 - 2014
      • Table Fixed-line calls and access revenue by main operator- 2011 - 2014
      • Table Communications retail revenue by sector - 2003 - 2014
      • Table Retail voice and data revenue - 2003 - 2012
      • Table Fixed telecoms revenue by service - 2008 - 2013
      • Table Household spend on telecoms services - 2005 - 2013
      • Table Communications revenue by sector - 2003 - 2013
      • Table Communications wholesale and retail revenue - 2005 - 2013
      • Table Call volumes, fixed-line and mobile in minutes - 2003 - 2015
      • Table Proportion of calls made, fixed-line and mobile - 2006 - 2015
      • Table Telecom retail revenue by sector: fixed, mobile - 2000 - 2014
      • Table Telecom connections: fixed, mobile, broadband - 2002 - 2014
      • Table Fixed telecoms revenue by type - 2006 - 2012
      • Table Household penetration by telecom technology - 2003 - 2004; 2006 - 2013
  • REGULATORY ENVIRONMENT
    • HISTORY
      • Revised NFR
    • REGULATORY AUTHORITY
      • Office of Communications (Ofcom)
      • Ofcom's strategic review
      • Digital Economy Act 2010
    • BT'S FUNCTIONAL SEPARATION
      • Openreach
    • TELECOM SECTOR LIBERALISATION IN THE UK
      • Privatisation of British Telecom
      • Interconnect
      • Access
        • Table BT LLU, shared wholesale lines - 2004 - 2015
      • Number Portability (NP)
      • Carrier PreSelection (CPS)
        • Table Lines with CPS - 2004 - 2015
      • Wholesale Line Rental (WLR)
        • Table WLR lines - 2004 - 2015
  • FIXED NETWORK OPERATORS
    • NEW REGULATIONS
      • Table Fixed-voice traffic by type in minutes - 2002 - 2013
      • Table Fixed telecom lines by operator - 2005 - 2013
      • Table Fixed-voice and data retail revenue - 2006 - 2013
      • Table Fixed-voice revenue by call type - 2002 - 2011
      • Table Fixed-voice revenue by call type - 2011 - 2014
    • BRITISH TELECOM
      • Table BT share of residential call types by traffic volumes - 2002 - 2014
      • Table BT Consumer lines and TV subscribers - 2011 - 2015
      • Table BT financial data - 2006 - 2015
      • Table BT revenue by retail, Consumer, Business divisions - 2007 - 2015
      • Table BT revenue by Global Services, Wholesale and Openreach divisions - 2007 - 2014
      • Table BT retail revenue by sector (historic) - 2008 - 2012
      • Company restructure
    • KCOM
      • Table KCom revenue - 1999 - 2014
    • CABLE &WIRELESS (C&W)
      • Table Cable & Wireless Europe financial data - 2009 - 2013
      • Table Cable & Wireless subscribers by sector (historic) - 2007 - 2009
    • VIRGIN MEDIA
      • Table Virgin Media revenue - 2003 - 2014
      • Table Virgin Media revenue by sector - 2006 - 2014
      • Table Virgin Media subscribers by sector - 2007 - 2015
    • COLT TELECOM
      • Table COLT financial data - 2006 - 2014
      • Table COLT financial data by business - 2013 - 2014
    • CARPHONE WAREHOUSE
      • Table Carphone Warehouse Europe mobile subscribers - 2011 - 2012
      • Table Carphone Warehouse Europe revenue, profit - 2008 - 2014
    • TALKTALK GROUP
      • Table TalkTalk financial data - 2009 - 2015
      • Table TalkTalk subscribers - 2011 - 2015
    • ORANGE
      • Table Orange broadband subscribers - 2004 - 2012
    • SKY
      • Table BSkyB voice customers - 2006 - 2014
  • TELECOMMUNICATIONS INFRASTRUCTURE
    • NATIONAL TELECOM NETWORK
      • Table Historic - Fixed lines in service and teledensity - 1999 - 2004
      • Table Fixed lines in service and teledensity - 2005 - 2015
    • NEXT GENERATION NETWORKS
      • BT's 21CN
    • INTERNATIONAL
      • Submarine cable networks
        • Table Principal submarine cables from the UK
      • Satellite networks
    • CLOUD SERVICES
  • BROADBAND MARKET
    • FIXED NETWORK BROADBAND MARKET
      • Table Fixed-line broadband retail revenue - 2001 - 2015
      • Table Broadband connections by type - 2002 - 2014
      • Broadband statistics
        • Table Market share of fixed-line broadband subscribers by provider - 2005 - 2013
        • Table Broadband penetration by technology - 2004 - 2014
        • Table Cable and DSL broadband subscribers - 2004 - 2014
        • Table Dial-up internet subscribers - 2004 - 2014
        • Table Percentage internet access by dial-up and broadband - 2000 - 2013
        • Table PC, broadband and internet household penetration - 2003 - 2014
        • Table Internet connectivity type, by household - 2003 - 2014
        • Table Household broadband penetration by access type - 2007 - 2013
        • Table Internet daily traffic - 2005 - 2013
        • Table Consumer broadband download speed by market share - 2008 - 2013
      • Forecasts - broadband subscribers
        • Table Forecast broadband subscribers - higher market growth scenario - 2015; 2017; 2020
        • Table Forecast broadband subscribers - lower market growth scenario - 2015; 2017; 2020
      • Emerging trends
        • Table Average headline broadband speed - 2006 - 2014
        • Table Average broadband speed - 2008 - 2014
        • Table Average broadband speed by platform - 2010 - 2014
      • Government support
        • Table Superfast broadband subscribers and market share - 2010 - 2014
      • Cable modems
        • Table Virgin Media subscribers by sector - 2007 - 2015
        • Table Virgin Media ARPU - 2007 - 2015
        • Table Virgin Media revenue - 2007 - 2014
      • Asymmetrical Digital Subscriber Line (ADSL)
        • Table xDSL subscribers - 2000 - 2014
        • Table BT retail and wholesale broadband subscribers - 2004 - 2015
        • Table BT retail and wholesale revenue - 2009 - 2015
      • Fibre-to-the-Premises (FttP) networks
        • Table FttC availability and projected speeds by distance
        • Table Household availability of BT FttC network - 2010 - 2014
        • Table Estimated cost of fibre by deployment technology
      • Broadband Powerline (BPL)
    • WIRELESS BROADBAND
      • Regulatory environment
        • Table Wireless opportunities using technology and frequencies
      • White space spectrum
      • Spectrum auctions
        • Table Spectrum auction results 10GHz - February 2008
      • WLAN/WiFi
      • WiMAX
      • Mobile broadband
        • Table Mobile broadband subscribers - 2008 - 2015
        • Table Broadband take-up by technology - 2007 - 2013
      • Internet via satellite
  • DIGITAL MEDIA
    • OVERVIEW OF DIGITAL MEDIA
    • KEY GENERAL TRENDS
    • BUSINESS MODELS - BUNDLED OFFERS
      • Table Proportion of bundled services by type - 2009 - 2012
      • Table Proportion of homes with bundled services by type - 2011 - 2012
      • Table Virgin Media proportion of bundled subscribers by type - 2007 - 2014
      • Table Virgin Media bundled services subscribers by type - 2007 - 2012
    • STREAMING MEDIA
    • REGULATORY ISSUES
      • Ofcom
      • Digital Dividend Review
      • Digital switchover licensing
    • DIGITAL TV (DTV)
      • Table TV revenue - 2000 - 2014
      • Table Multichannel take-up in UK households - 2006 - 2011
      • Table Market share of TV homes by platform (primary sets) - 2005 - 2012
      • Broadband TV (IPTV)
        • Table Online TV revenue by sector - 2004 - 2012
        • Table BT Vision subscribers - 2008 - 2015
      • Cable TV
        • Table Virgin Media subscribers by sector - 2007 - 2015
        • Table Virgin Media ARPU - 2007 - 2015
        • Table Virgin Media revenue - 2003 - 2014
      • Satellite TV
        • Table Free-to-view satellite households - 2003 - 2012
        • Table Sky subscriber statistics - 2007 - 2014
        • Table Sky annualised ARPU - 2005 - 2012
        • Table Sky revenue, operating profit and EBITDA - 2007 - 2015
      • Digital Terrestrial TV
        • Table Digital broadcasting switchover timetable - 2008 - 2012
        • Table Freeview enabled TVs - 2005 - 2012
      • Video-on-Demand (VoD)
        • Table Virgin Media VoD use - 2007 - 2011
        • Table Virgin Media HD V+ base - 2008 - 2011; 2014
      • VoIP
        • Table VoIP users as percentage of total internet subscribers - 2005 - 2013
  • MOBILE COMMUNICATIONS
    • OVERVIEW OF THE UK'S MOBILE MARKET
      • Table Call volumes, fixed-line and mobile in minutes - 2003 - 2014
      • Table Residential sector mobile revenue - 2008 - 2015
      • Table Mobile retail revenue by service - 2002 - 2014
      • Table Mobile revenue as proportion of total - 2002 - 2013
      • Table Mobile revenue as proportion of total - 2008 - 2013
      • Table Mobile and fixed-line revenue as proportion of combined revenue - 2008 - 2014
      • Mobile statistics
        • Table Mobile handset sales - 2005 - 2014
        • Table Historic - Mobile subscribers and SIM penetration rate - 1995; 1997; 1999 - 2004
        • Table Mobile subscribers and SIM penetration rate - 2005 - 2015
        • Table Mobile broadband subscribers - 2005 - 2015
        • Table Percentages of mobile and fixed phones in homes - 2000 - 2014
        • Table Mobile ARPU by use (data, SMS, voice) - 2005 - 2014
        • Table Mobile ARPU by contract, prepaid - 2006 - 2014
        • Table Average household spend of fixed-voice, mobile and internet services - 2008 - 2015
      • Operator market shares
        • Table Mobile market share by operator - 2004 - 2014
    • REGULATORY ISSUES
      • Spectrum regulations and spectrum auctions
      • Spectrum refarming
        • Table Spectrum awards - 800MHz and 2.6GHz - 2013
      • Revised licence conditions
      • Roaming
        • Table European roaming charges - 2007 - 2014
      • Number portability
      • Mobile Termination Rates (MTRs)
        • Table MTRs by operator (pence per minute) - 2015 - 2017
    • MAJOR MOBILE OPERATORS
      • Hutchison 3
        • Table 3 UK subscribers by sector - 2008 - 2014
        • Table 3 UK financial data - 2008 - 2014
        • Table 3 UK annualised gross ARPU by sector - 2009 - 2014
      • O2
        • Table O2 financial data -2007 - 2015
        • Table O2 ARPU - blended, contract, prepaid and data - 2006 - 2015
        • Table O2 proportion of data to total revenue - 2006 - 2015
        • Table O2 subscribers, prepaid and contract - 2005 - 2015
      • Vodafone
        • Table Vodafone end-year ARPU - blended, contract and prepaid - 2005 - 2014
        • Table Vodafone (UK) subscribers and proportion prepaid - 2001 - 2015
        • Table Vodafone (UK) financial data - 2008 - 2015
        • Table Vodafone customer churn - 2007 - 2015
        • Table Vodafone Group revenue by sector - 2007 - 2015
        • Table Vodafone UK service revenue by sector - 2009 - 2015
        • Table Vodafone mobile customer retention cost - 2007 - 2015
        • Table Vodafone customer smartphone adoption - 2010 - 2015
      • EE
        • Table EE quarterly revenue - 2009 - 2015
        • Table EE financial data - 2011 - 2015
        • Table EE annual revenue - 2013 - 2014
        • Table EE ARPU - 2009 - 2015
        • Table EE subscriber data - 2009 - 2015
        • Table T-Mobile financial data (historic) - 2005 - 2010
        • Table T-Mobile subscribers (historic) - 2005 - 2010
        • Table Orange subscribers, contract and prepaid (historic) - 2006 - 2010
        • Table Orange subscribers by type, 3G, MVNO (historic) - 2007 - 2010
        • Table Orange revenue (historic) - 2005 - 2010
        • Table Orange customer churn (historic) - 2003 - 2009
        • Table Orange data revenue as proportion of total (historic) - 2007 - 2009
        • Table Orange annualised ARPU by category (historic) - 2006 - 2010
        • Table Orange mobile customer acquisition and retention cost (historic) - 2007 - 2009
      • Mobile Virtual Network Operators (MVNOs)
        • Table MNO and MVNO share of subscribers - 2004 - 2011
        • Table Virgin Mobile subscribers - 2005 - 2014
        • Table Virgin Mobile revenue - 2007 - 2014
    • MOBILE VOICE SERVICES
      • Prepaid cards
        • Table Prepaid and contract subscribers - 2002 - 2014
        • Table Contract proportion of total subscribers - 2002 - 2013
    • FORECASTS
      • Forecasts - mobile ARPU - 2010; 2015; 2020
        • Table Forecast mobile ARPU - 2007 - 2010; 2015; 2020
      • Forecasts - mobile subscribers and penetration - 2010 - 2016
        • Table Mobile subscribers and SIM penetration rate - 2013; 2015; 2020
  • MOBILE DATA MARKET OVERVIEW
    • Table 3G subscribers and percentage of total subscribers - 2003 - 2014
    • SPECTRUM
      • Spectrum 2.6GHz
        • Table Spectrum available for mobile services
      • Spectrum 600MHz
      • Spectrum 800MHz
        • Table Spectrum awards - 800MHz and 2.6GHz - 2013
      • Spectrum 900MHz
      • Spectrum 700MHz
      • Spectrum 1800MHz
      • Spectrum 2.3GHz and 3.4GHz
      • Third Generation (3G)
        • Table 3G licence results - April 2000
      • Fourth Generation (4G)
        • Table LTE coverage by network operator - 2008 - 2014
        • Table O2 LTE subscribers - 2014 - 2015
        • Table EE LTE subscribers - 2014 - 2015
      • Fifth Generation (5G)
      • Spectrum refarming
    • OPERATOR SERVICES - 3G
      • Hutchison 3
        • Table 3 UK subscribers by sector - 2008 - 2014
        • Table 3 UK revenue by sector (historic) - 2008 - 2010
        • Table 3 UK financial data - 2008 - 2014
        • Table 3 UK annualised ARPU by sector - 2009 - 2014
        • Table 3 UK annualised data ARPU (historic) - 2009 - 2013
      • O2
        • Table O2 financial data -2007 - 2015
        • Table O2 subscribers, prepaid and contract - 2005 - 2015
      • Vodafone
        • Table Vodafone (UK) subscribers and proportion prepaid - 2001 - 2015
        • Table Vodafone (UK) financial data - 2008 - 2015
      • Everything Everywhere (EE)
        • Table EE quarterly revenue - 2009 - 2015
        • Table EE ARPU - 2009 - 2015
        • Table EE subscriber data - 2009 - 2015
    • MOBILE MESSAGING
      • Short Message Service (SMS)
        • Table SMS messages sent - 2004 - 2015
        • Table SMS and MMS traffic - 2011 - 2015
        • Table SMS and MMS revenue - 2011 - 2014
        • Table SMS and MMS volumes by operator - 2006 - 2010
      • Multimedia Messaging Service (MMS)
        • Table MMS messages sent - 2004 - 2013
    • MOBILE DATA SERVICES
      • Consumer use of multimedia services
        • Table Mobile data traffic and revenue increase- 2007 - 2013
        • Table Mobile data revenue by service - 2005 - 2013
        • Table Mobile data revenue - - - 2014
        • Table Proportion of mobile broadband accesses by technology - 2007 - 2013
        • Table O2 smartphones in use and penetration - 2014 - 2015
      • High-Speed Packet Access (HSPA)
      • Long-term Evolution (LTE)
        • Table Average 3G and 4G speeds by operator (Mb/s) - Q4 2014
        • Table Proportion of 4G speed availability by operator - Q4 2014
        • Table EE LTE subscribers - 2013 - 2015
      • Mobile TV
        • Table M2M derived revenue - 2010 - 2015
        • Table M2M connections - 2010 - 2015
        • Table O2 M2M accesses - 2014 - 2015

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