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United Kingdom - Telecoms, IP Networks and Digital Media

  • May 2015
  • -
  • Paul Budde Communication Pty Ltd
  • -
  • 169 pages

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.

Table Of Contents

United Kingdom - Telecoms, IP Networks and Digital Media
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 and Wireless (CandW)
4.5 Virgin Media
4.6 COLT Telecom
4.7 Carphone Warehouse
4.8 TalkTalk Group
4.9 Orange
4.10 Sky
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
5.4 Cloud services
6. Broadband Market
6.1 Fixed Network Broadband Market
6.1.1 Broadband statistics
6.1.2 Forecasts broadband subscribers
6.1.3 Emerging trends
6.1.4 Government support
6.1.5 Cable modems
6.1.6 Asymmetrical Digital Subscriber Line (ADSL)
6.1.7 Fibre-to-the-Premises (FttP) networks
6.1.8 Broadband Powerline (BPL)
6.2 Wireless broadband
6.2.1 Regulatory environment
6.2.2 White space spectrum
6.2.3 Spectrum auctions
6.2.4 WLAN/WiFi
6.2.5 WiMAX
6.2.6 Mobile broadband
6.2.7 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 Streaming media
7.5 Regulatory issues
7.5.1 Ofcom
7.5.2 Digital Dividend Review
7.5.3 Digital switchover licensing
7.6 Digital TV (DTV)
7.6.1 Broadband TV (IPTV)
7.6.2 Cable TV
7.6.3 Satellite TV
7.6.4 Digital Terrestrial TV
7.6.5 Video-on-Demand (VoD)
7.6.6 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 Spectrum refarming
8.2.3 Revised licence conditions
8.2.4 Roaming
8.2.5 Number portability
8.2.6 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 EE
8.3.5 Mobile Virtual Network Operators (MVNOs)
8.4 Mobile voice services
8.4.1 Prepaid cards
8.5 Forecasts
8.5.1 Forecasts mobile ARPU - 2007 - 2010; 2015; 2020
8.5.2 Forecasts mobile subscribers and penetration 2010 - 2016
9. Mobile Data Market Overview
9.1 Spectrum
9.1.1 Spectrum 2.6GHz
9.1.2 Spectrum 600MHz
9.1.3 Spectrum 800MHz
9.1.4 Spectrum 900MHz
9.1.5 Spectrum 700MHz
9.1.6 Spectrum 1800MHz
9.1.7 Spectrum 2.3GHz and 3.4GHz
9.1.8 Third Generation (3G)
9.1.9 Fourth Generation (4G)
9.1.10 Fifth Generation (5G)
9.1.11 Spectrum refarming
9.2 Operator services 3G
9.2.1 Hutchison 3
9.2.2 O2
9.2.3 Vodafone
9.2.4 Everything Everywhere (EE)
9.3 Mobile Messaging
9.3.1 Short Message Service (SMS)
9.3.2 Multimedia Messaging Service (MMS)
9.4 Mobile data services
9.4.1 Consumer use of multimedia services
9.4.2 High-Speed Packet Access (HSPA)
9.4.3 Long-term Evolution (LTE)
9.4.4 Mobile TV
Table 1 Country statistics 2015 (e)
Table 2 Telecom revenue and investment statistics 2014 (e)
Table 3 Telephone network statistics 2014 (e)
Table 4 Internet user statistics 2014
Table 5 Broadband statistics 2014 (e)
Table 6 Mobile statistics 2015 (e)
Table 7 National telecommunications authority
Table 8 Household penetration of fixed and mobile services 2006 - 2014
Table 9 Fixed-line calls and access revenue by main operator 2011 - 2014
Table 10 Communications retail revenue by sector 2003 - 2014
Table 11 Retail voice and data revenue 2003 - 2012
Table 12 Fixed telecoms revenue by service 2008 - 2013
Table 13 Household spend on telecoms services 2005 - 2013
Table 14 Communications revenue by sector 2003 - 2013
Table 15 Communications wholesale and retail revenue 2005 - 2013
Table 16 Call volumes, fixed-line and mobile in minutes 2003 - 2015
Table 17 Proportion of calls made, fixed-line and mobile 2006 - 2015
Table 18 Telecom retail revenue by sector: fixed, mobile 2000 - 2014
Table 19 Telecom connections: fixed, mobile, broadband 2002 - 2014
Table 20 Fixed telecoms revenue by type 2006 - 2012
Table 21 Household penetration by telecom technology 2003 - 2004; 2006 - 2013
Table 22 BT LLU, shared wholesale lines 2004 - 2015
Table 23 Lines with CPS 2004 - 2015
Table 24 WLR lines 2004 - 2015
Table 25 Fixed-voice traffic by type in minutes 2002 - 2013
Table 26 Fixed telecom lines by operator 2005 - 2013
Table 27 Fixed-voice and data retail revenue 2006 - 2013
Table 28 Fixed-voice revenue by call type 2002 - 2011
Table 29 Fixed-voice revenue by call type 2011 - 2014
Table 30 BT share of residential call types by traffic volumes 2002 - 2014
Table 31 BT Consumer lines and TV subscribers 2011 - 2015
Table 32 BT financial data 2006 - 2015
Table 33 BT revenue by retail, Consumer, Business divisions 2007 - 2015
Table 34 BT revenue by Global Services, Wholesale and Openreach divisions 2007 - 2014
Table 35 BT retail revenue by sector (historic) 2008 - 2012
Table 36 KCom revenue 1999 - 2014
Table 37 Cable and Wireless Europe financial data 2009 - 2013
Table 38 Cable and Wireless subscribers by sector (historic) 2007 - 2009
Table 39 Virgin Media revenue 2003 - 2014
Table 40 Virgin Media revenue by sector 2006 - 2014
Table 41 Virgin Media subscribers by sector 2007 - 2015
Table 42 COLT financial data 2006 - 2014
Table 43 COLT financial data by business 2013 - 2014
Table 44 Carphone Warehouse Europe mobile subscribers 2011 - 2012
Table 45 Carphone Warehouse Europe revenue, profit 2008 - 2014
Table 46 TalkTalk financial data 2009 - 2015
Table 47 TalkTalk subscribers 2011 - 2015
Table 48 Orange broadband subscribers 2004 - 2012
Table 49 BSkyB voice customers 2006 - 2014
Table 50 Historic - Fixed lines in service and teledensity 1999 - 2004
Table 51 Fixed lines in service and teledensity 2005 - 2015
Table 52 Fixed-line broadband retail revenue 2001 - 2015
Table 53 Broadband connections by type 2002 - 2014
Table 54 Market share of fixed-line broadband subscribers by provider 2005 - 2013
Table 55 Broadband penetration by technology 2004 - 2014
Table 56 Cable and DSL broadband subscribers 2004 - 2014
Table 57 Dial-up internet subscribers 2004 - 2014
Table 58 Percentage internet access by dial-up and broadband 2000 - 2013
Table 59 PC, broadband and internet household penetration 2003 - 2014
Table 60 Internet connectivity type, by household 2003 - 2014
Table 61 Household broadband penetration by access type 2007 - 2013
Table 62 Internet daily traffic 2005 - 2013
Table 63 Consumer broadband download speed by market share 2008 - 2013
Table 64 Forecast broadband subscribers higher market growth scenario 2015; 2017; 2020
Table 65 Forecast broadband subscribers lower market growth scenario 2015; 2017; 2020
Table 66 Average headline broadband speed 2006 - 2014
Table 67 Average broadband speed 2008 - 2014
Table 68 Average broadband speed by platform 2010 - 2014
Table 69 Superfast broadband subscribers and market share 2010 - 2014
Table 70 Virgin Media subscribers by sector 2007 - 2015
Table 71 Virgin Media ARPU 2007 - 2015
Table 72 Virgin Media revenue 2007 - 2014
Table 73 xDSL subscribers 2000 - 2014
Table 74 BT retail and wholesale broadband subscribers 2004 - 2015
Table 75 BT retail and wholesale revenue 2009 - 2015
Table 76 FttC availability and projected speeds by distance
Table 77 Household availability of BT FttC network 2010 - 2014
Table 78 Estimated cost of fibre by deployment technology
Table 79 Mobile broadband subscribers 2008 - 2015
Table 80 Broadband take-up by technology 2007 - 2013
Table 81 Proportion of bundled services by type 2009 - 2012
Table 82 Proportion of homes with bundled services by type 2011 - 2012
Table 83 Virgin Media proportion of bundled subscribers by type 2007 - 2014
Table 84 Virgin Media bundled services subscribers by type 2007 - 2012
Table 85 TV revenue 2000 - 2014
Table 86 Multichannel take-up in UK households 2006 - 2011
Table 87 Market share of TV homes by platform (primary sets) 2005 - 2012
Table 88 Online TV revenue by sector 2004 - 2012
Table 89 BT Vision subscribers 2008 - 2015
Table 90 Virgin Media subscribers by sector 2007 - 2015
Table 91 Virgin Media ARPU 2007 - 2015
Table 92 Virgin Media revenue 2003 - 2014
Table 93 Free-to-view satellite households 2003 - 2012
Table 94 Sky subscriber statistics 2007 - 2014
Table 95 Sky annualised ARPU 2005 - 2012
Table 96 Sky revenue, operating profit and EBITDA 2007 - 2015
Exhibit 10 Digital broadcasting switchover timetable 2008 - 2012
Table 97 Freeview enabled TVs 2005 - 2012
Table 98 Virgin Media VoD use 2007 - 2011
Table 99 Virgin Media HD V+ base 2008 2011; 2014
Table 100 VoIP users as percentage of total internet subscribers 2005 - 2013
Table 101 Call volumes, fixed-line and mobile in minutes 2003 - 2014
Table 102 Residential sector mobile revenue 2008 - 2015
Table 103 Mobile retail revenue by service 2002 - 2014
Table 104 Mobile revenue as proportion of total 2002 - 2013
Table 105 Mobile revenue as proportion of total 2008 - 2013
Table 106 Mobile and fixed-line revenue as proportion of combined revenue 2008 - 2014
Table 107 Mobile handset sales 2005 - 2014
Table 108 Historic - Mobile subscribers and SIM penetration rate 1995; 1997; 1999 - 2004
Table 109 Mobile subscribers and SIM penetration rate 2005 - 2015
Table 110 Mobile broadband subscribers 2005 - 2015
Table 111 Percentages of mobile and fixed phones in homes 2000 - 2014
Table 112 Mobile ARPU by use (data, SMS, voice) 2005 - 2014
Table 113 Mobile ARPU by contract, prepaid 2006 - 2014
Table 114 Average household spend of fixed-voice, mobile and internet services 2008 - 2015
Table 115 Mobile market share by operator 2004 - 2014
Table 116 European roaming charges 2007 - 2014
Table 117 MTRs by operator (pence per minute) 2015 - 2017
Table 118 3 UK subscribers by sector 2008 - 2014
Table 119 3 UK financial data 2008 - 2014
Table 120 3 UK annualised gross ARPU by sector 2009 - 2014
Table 121 O2 financial data 2007 - 2015
Table 122 O2 ARPU blended, contract, prepaid and data 2006 - 2015
Table 123 O2 proportion of data to total revenue 2006 - 2015
Table 124 O2 subscribers, prepaid and contract 2005 - 2015
Table 125 Vodafone end-year ARPU blended, contract and prepaid 2005 - 2014
Table 126 Vodafone (UK) subscribers and proportion prepaid 2001 - 2015
Table 127 Vodafone (UK) financial data 2008 - 2015
Table 128 Vodafone customer churn 2007 - 2015
Table 129 Vodafone Group revenue by sector 2007 - 2015
Table 130 Vodafone UK service revenue by sector 2009 - 2015
Table 131 Vodafone mobile customer retention cost 2007 - 2015
Table 132 Vodafone customer smartphone adoption 2010 - 2015
Table 133 EE quarterly revenue 2009 - 2015
Table 134 EE financial data 2011 - 2015
Table 135 EE annual revenue 2013 - 2014
Table 136 EE ARPU 2009 - 2015
Table 137 EE subscriber data 2009 - 2015
Table 138 T-Mobile financial data (historic) 2005 - 2010
Table 139 T-Mobile subscribers (historic) 2005 - 2010
Table 140 Orange subscribers, contract and prepaid (historic) 2006 - 2010
Table 141 Orange subscribers by type, 3G, MVNO (historic) 2007 - 2010
Table 142 Orange revenue (historic) 2005 - 2010
Table 143 Orange customer churn (historic) 2003 - 2009
Table 144 Orange data revenue as proportion of total (historic) 2007 - 2009
Table 145 Orange annualised ARPU by category (historic) 2006 - 2010
Table 146 Orange mobile customer acquisition and retention cost (historic) 2007 - 2009
Table 147 MNO and MVNO share of subscribers 2004 - 2011
Table 148 Virgin Mobile subscribers 2005 - 2014
Table 149 Virgin Mobile revenue 2007 - 2014
Table 150 Prepaid and contract subscribers 2002 - 2014
Table 151 Contract proportion of total subscribers 2002 - 2013
Table 152 Forecast mobile ARPU 2007 - 2010; 2015; 2020
Table 153 Mobile subscribers and SIM penetration rate 2013; 2015; 2020
Table 154 3G subscribers and percentage of total subscribers 2003 - 2014
Table 155 LTE coverage by network operator 2008 - 2014
Table 156 O2 LTE subscribers 2014 - 2015
Table 157 EE LTE subscribers 2014 - 2015
Table 158 3 UK subscribers by sector 2008 - 2014
Table 159 3 UK revenue by sector (historic) 2008 - 2010
Table 160 3 UK financial data 2008 - 2014
Table 161 3 UK annualised ARPU by sector 2009 - 2014
Table 162 3 UK annualised data ARPU (historic) 2009 - 2013
Table 163 O2 financial data 2007 - 2015
Table 164 O2 subscribers, prepaid and contract 2005 - 2015
Table 165 Vodafone (UK) subscribers and proportion prepaid 2001 - 2015
Table 166 Vodafone (UK) financial data 2008 - 2015
Table 167 EE quarterly revenue 2009 - 2015
Table 168 EE ARPU 2009 - 2015
Table 169 EE subscriber data 2009 - 2015
Table 170 SMS messages sent 2004 - 2015
Table 171 SMS and MMS traffic 2011 - 2015
Table 172 SMS and MMS revenue 2011 - 2014
Table 173 SMS and MMS volumes by operator 2006 - 2010
Table 174 MMS messages sent 2004 - 2013
Table 175 Mobile data traffic and revenue increase 2007 - 2013
Table 176 Mobile data revenue by service 2005 - 2013
Table 177 Mobile data revenue - 2014
Table 178 Proportion of mobile broadband accesses by technology 2007 - 2013
Table 179 O2 smartphones in use and penetration 2014 - 2015
Table 180 Average 3G and 4G speeds by operator (Mb/s) Q4 2014
Table 181 Proportion of 4G speed availability by operator Q4 2014
Table 182 EE LTE subscribers 2013 - 2015
Table 183 M2M derived revenue 2010 - 2015
Table 184 M2M connections 2010 - 2015
Table 185 O2 M2M accesses 2014 - 2015
Chart 1 Communications retail revenue by sector 2003 - 2014
Chart 2 Communications revenue by sector 2003 - 2013
Chart 3 Communications wholesale and retail revenue 2005 - 2013
Chart 4 Call volumes, fixed-line and mobile in minutes 2003 - 2015
Chart 5 Telecom connections: fixed, mobile, broadband 2002 2014
Chart 6 BT LLU, shared wholesale lines 2004 2015
Chart 7 BT financial data 2006 - 2015
Chart 8 BT revenue by operating division 2007 - 2015
Chart 9 Cable and Wireless Europe financial data 2009 2013
Chart 10 Virgin Media revenue by sector 2006 - 2014
Chart 11 Virgin Media subscribers by sector 2007 - 2015
Chart 12 COLT financial data 2006 - 2014
Chart 13 Carphone Warehouse Europe revenue, profit 2008 - 2014
Chart 14 Broadband connections by type 2002 2014
Chart 15 Broadband penetration by technology 2004 2014
Chart 16 Cable and DSL broadband subscribers 2004 - 2014
Chart 17 Virgin Media subscribers by sector 2007 - 2015
Chart 18 BT retail and wholesale broadband subscribers 2004 - 2015
Chart 19 BT retail and wholesale revenue (year to Mar) 2009 - 2015
Chart 20 Virgin Media proportion of bundled subscribers by type 2007 - 2014
Chart 21 Virgin Media bundled services subscribers by type 2007 - 2012
Chart 22 Virgin Media subscribers by sector 2007 2015
Chart 23 Sky subscriber statistics 2007 2014
Chart 24 Sky revenue, operating profit and EBITDA 2007 - 2015
Chart 25 Call volumes, fixed-line and mobile in minutes 2003 - 2014
Chart 26 Mobile subscribers and SIM penetration rate 2003 - 2015
Chart 27 3 UK subscribers by sector 2008 - 2014
Chart 28 3 UK ARPU by sector 2009 - 2014
Chart 29 O2 financial data 2007 - 2015
Chart 30 O2 annualised ARPU blended, contract, prepaid and data 2006 - 2015
Chart 31 O2 subscribers, prepaid and contract 2005 - 2015
Chart 32 Vodafone ARPU blended, contract and prepaid 2005 - 2014
Chart 33 Vodafone (UK) subscribers and proportion prepaid 2001 - 2015
Chart 34 Vodafone (UK) financial data 2008 - 2015
Chart 35 Vodafone Group revenue by sector 2007 - 2015
Chart 36 Vodafone UK service revenue by sector 2009 - 2015
Chart 37 EE quarterly revenue 2009 - 2014
Chart 38 EE ARPU 2009 - 2014
Chart 39 EE subscriber data 2009 - 2015
Chart 40 Prepaid and contract subscribers 2002 - 2013
Chart 41 3 UK subscribers by sector 2008 - 2014
Chart 42 3 UK ARPU by sector 2009 - 2014
Chart 43 O2 financial data 2007 - 2015
Chart 44 O2 subscribers, prepaid and contract 2005 - 2015
Chart 45 Vodafone (UK) subscribers and proportion prepaid 2001 - 2015
Chart 46 Vodafone (UK) financial data 2008 - 2015
Chart 47 EE quarterly revenue 2009 - 2015
Chart 48 EE ARPU 2009 - 2015
Chart 49 EE subscriber data 2009 - 2015
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
Exhibit 6 Overview of digital media
Exhibit 7 Operators' service bundling offers 2015
Exhibit 8 Technology developments in bundled services
Exhibit 9 Snapshot of digital TV services and providers
Exhibit 11 Popular VoIP providers
Exhibit 12 Spectrum awards 800MHz and 2.6GHz 2013
Exhibit 13 Spectrum available for mobile services
Exhibit 14 Spectrum awards 800MHz and 2.6GHz 2013
Exhibit 15 3G licence results April 2000
Exhibit 16 3G licensee and infrastructure suppliers

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