2007 Europe - Telecoms, Mobile and Broadband in United Kingdom and Ireland

2007 Europe - Telecoms, Mobile and Broadband in United Kingdom and Ireland

BuddeComm’s latest UK and Ireland Annual Publication, ‘2007 Telecoms, Mobile and Broadband in the UK and Ireland’, profiles two countries with close links between regulators and telcos. Ireland’s small telecom market contrasts with that of the UK, which is among Europe’s largest and most vibrant. Ireland has been slow to develop broadband and digital TV, while the UK has a highly competitive broadband sector and the largest digital TV market in the EU.

In the UK the markets for triple play continued to mature during 2007, while digital TV take-up reached 85% by mid-year. The country began switching off analogue transmissions in October 2007 in a phased program to 2012. The consolidation of the cable market, with Virgin Media the dominant player, has helped rationalise network upgrades while the operator has extended its footprint through wholesale DSL access. For the country overview, see chapter 1, page 1.

Ireland’s incumbent, eircom, in October 2007 set in train its structural separation, aiming to separate its network infrastructure from its retail business. The model differs from that of BT’s Openreach but if successful it may dramatically boost market competition and provide the stimulus for widespread broadband take-up, encourage investment in network upgrades and promote high-bandwidth triple play services in coming years. For the country overview, see chapter 2, page 95.

This report presents an overview of telecoms liberalisation and privatisation in the UK and Ireland, together with product offerings for both the mobile and broadband sectors. It provides the latest key statistics for operators in all sectors, highlighting market and technological developments and detailing the emergence of media convergence and triple and quad-play in these two important markets. The report also covers the latest regulatory developments, together with an analysis of NGNs and the strategies of the main players in coming years.

Key Highlights
2007 saw further development in quad-play offers, led by Virgin Media and BSkyB through its Sky Broadband, Sky Talk and Sky Plus brands. In October 2007 BSkyB launched a pared down version of its pay TV, broadband and telephone services under a new brand, Picnic. The company’s equipment has been installed in BT exchanges covering 70% of UK homes.
To address the UK’s relatively low broadband download speeds the regulator in October 2007 promoted the concept of a national fibre network costing up to £15 billion, with the potential for regulatory intervention to safeguard operator investment sin the sector.
eircom sought government approval to split company’s wholesale and retail divisions into two separate operations, with different owners. The structural separation would go some way to address the country’s poor broadband infrastructure and take-up, though the company may expect its fibre network to be closed to competitors for up to five years as a part of any deal.
The UK’s digital and pay TV markets is among the most developed in Europe, with a range of services reached by about 85% of the population.
The Mobile TV market was strengthened in 2007 with deals between operators and content providers - H3 with BSkyB, Orange and Vodafone with the BBC. H3 in April 2007 launched free advertising-funded mobile TV, while an advertising-funded MVNO, Blyk, may prove to be one of the more successful business models in the market.
Broadband subscribers and penetration in the UK and Ireland - 2004 - 2007

UK Ireland
Year Subscribers Penetration Subscribers Penetration
2004 6,129,300 10% 135,000 3%
2005 9,840,500 17% 270,700 6%
2006 13,111,600 24% 517,300 12%
2007 (e) 17,250,000 28% 685,000 17%

(Source: BuddeComm based on industry sources)

For those needing high level strategic information and objective analysis on this region, this 170+ page report is essential reading and gives further information on:

eircom’s structural separation, its impact on broadband take-up, and the regulatory measures needed to guarantee equality of access for competitors;
Ireland’s mobile market following eircom’s award of a 3G licence;
The growing demand for IPTV, VoD and other triple play services and its effect in stimulating both DSL and cable network upgrades;
The changing face of converged media with widespread triple play services becoming a standard feature in homes.

1. UNITED KINGDOM
1.1 Key statistics
1.2 Telecommunications market
1.2.1 Overview of the UK’s telecom market
1.3 Regulatory environment
1.3.1 History
1.3.2 EU Regulatory Framework
1.3.3 Regulatory authority
1.3.4 BT’s structural separation
1.3.5 Next Generation Networks (NGN)
1.3.6 Telecom sector liberalisation in the UK
1.4 Major fixed network operators in the UK
1.4.1 New regulations
1.4.2 British Telecom
1.4.3 KCOM
1.4.4 Cable & Wireless
1.4.5 Virgin Media
1.4.6 COLT Telecom
1.4.7 THUS
1.4.8 Carphone Warehouse
1.4.9 Post Office re-entry
1.4.10 Orange
1.5 Telecommunications infrastructure
1.5.1 National telecom network
1.5.2 International
1.6 Broadband market
1.6.1 Overview
1.6.2 Cable modems
1.6.3 Asymmetrical Digital Subscriber Line (ADSL)
1.6.4 Fibre-to-the-Home (FttH) networks
1.6.5 Broadband Powerline (BPL)
1.6.6 Wireless broadband
1.6.7 Broadband forecasts to 2017
1.7 Convergence
1.7.1 Overview of media convergence
1.7.2 Key general trends
1.7.3 Triple play models
1.7.4 Regulator issues
1.7.5 Digital TV (DTV)
1.8 Mobile communications
1.8.1 Overview of the UK’s mobile market
1.8.2 Regulatory issues
1.8.3 Mobile technologies
1.8.4 Major mobile operators
1.8.5 Mobile voice services
1.8.6 Mobile data services
2. IRELAND
2.1 Key statistics
2.2 Telecommunications market
2.2.1 Overview of Ireland’s telecom market
2.3 Regulatory environment
2.3.1 History
2.3.2 Regulatory authority
2.3.3 Telecom sector liberalisation in Ireland
2.3.4 Number Portability (NP)
2.3.5 Carrier PreSelection (CPS)
2.4 Fixed network operators in Ireland
2.4.1 Operator market shares
2.4.2 eircom
2.4.3 BT Ireland
2.4.4 Smart Telecom
2.4.5 Tele2
2.4.6 Other operators
2.5 Telecommunications infrastructure
2.5.1 National telecom network
2.5.2 Structural separation issues
2.5.3 International
2.6 Broadband market
2.6.1 Overview
2.6.2 Broadband statistics
2.6.3 Cable modems
2.6.4 Asymmetrical Digital Subscriber Line (ADSL)
2.6.5 Broadband forecasts to 2017
2.7 Convergence
2.7.1 Overview of media convergence
2.7.2 Key general trends
2.7.3 Triple play models
2.7.4 Regulatory issues
2.7.5 Digital TV
2.8 Mobile communications
2.8.1 Overview of Ireland’s mobile market
2.8.2 Regulatory issues
2.8.3 Mobile technologies
2.8.4 Major mobile operators
2.8.5 Mobile voice services
2.8.6 Mobile data services
2.8.7 Mobile applications
3. GLOSSARY OF ABBREVIATIONS


Exhibit 1 – Principal submarine cables from the UK – 2007
Exhibit 2 – BT’s wholesale DSL products – 2007
Exhibit 3 – Wireless opportunities
Exhibit 4 – WLAN operator business models - 2007
Exhibit 5 – Operators’ service bundling offers – August 2007
Exhibit 6 – Technology developments in bundled services – 2007 - 2008
Exhibit 7 – Digital broadcasting switchover timetable – 2008 - 2012
Exhibit 8 – Snapshot of digital TV services – July 2007
Exhibit 9 – Popular VoIP providers – 2007
Exhibit 10 – 3G infrastructure suppliers
Exhibit 11 – 3G licence results – June 2002
Exhibit 12 – WDMDS licences: operators, spectrum and fees – 2005




Table 1 – Country statistics United Kingdom – 2007
Table 2 – Telecom revenue and investment statistics – 2007
Table 3 – Telephone network statistics – 2007
Table 4 – Internet user statistics – June 2007
Table 5 – Broadband statistics – March 2007
Table 6 – Mobile statistics – June 2007
Table 7 – National telecommunications authority
Table 8 – Cost of average telecoms services – 2002 - 2006
Table 9 – Communications retail sector revenue – 2001 - 2006
Table 10 – Share of communications wholesale and retail revenue – 2001 - 2006
Table 11 – Communications wholesale and retail revenue – 2001 - 2006
Table 12 – Telecom connections: fixed, mobile, broadband and Internet – 2002 - 2007
Table 13 – BT Openreach LLU volumes – 2004 - 2007
Table 14 – LLU, shared access price - connection, monthly rental – 2004 - 2006
Table 15 – Proportion of unbundled exchanges and connections – 2005 - 2007
Table 16 – Unbundled loops and access lines – 2004 - 2007
Table 17 – ISP share of LLU lines – 2006
Table 18 – Share of non-BT lines by sector – 2002 - 2006
Table 19 – Numbers ported – 2004 – 2005 *
Table 20 – Lines with CPS – 2004 - 2007
Table 21 – Use of alternative fixed-line providers – 2006
Table 22 – WLR lines – 2004 - 2007
Table 23 – Market share of fixed voice calls – 2002 - 2006
Table 24 – BT market share of residential call types by traffic volumes – 2002 - 2006
Table 25 – BT revenue, EBITDA, CAPEX, profit, debt and annual change – 2006 - 2007
Table 26 – KCOM turnover – 1999 - 2007
Table 27 – Cable & Wireless financial statistics – 2006 - 2007
Table 28 – Virgin Media revenue – 2006 - 2007
Table 29 – COLT data and voice revenue, EBITDA and annual change – 2006 - 2007
Table 30 – THUS mobile and broadband subscribers – 2006 - 2007
Table 31 – THUS revenue, EBITDA and operating loss – 2006 - 2007
Table 32 – Carphone Warehouse revenue, profit and annual change – 2007
Table 33 – Fixed lines in service and teledensity – 1995 - 2007
Table 34 – Broadband retail revenue – 2000 - 2007
Table 35 – ISP market share of broadband subscribers – 2006 - 2007
Table 36 – Broadband connections by type – 2002 - 2007
Table 37 – Market share of broadband subscribers – 2002 - 2007
Table 38 – Broadband availability by households – 2000 - 2007
Table 39 – Internet / Broadband service revenue – 2001 - 2006
Table 40 – UK broadband market overview – 2003 - 2006
Table 41 – Broadband penetration by technology – 2004 - 2006
Table 42 – Total broadband subscribers and penetration by type – 2004 - 2007
Table 43 – Percentage Internet access by dial-up and broadband – 2000 - 2006
Table 44 – Residential Internet and broadband connections – 2002 - 2007
Table 45 – PC, broadband and Internet household penetration – 2000 - 2007
Table 46 – Broadband and narrowband share of connections – 2004 - 2006
Table 47 – Broadband lines by type: DSL, LLU, cable; wholesale – 2006
Table 48 – Virgin Media subscriber statistics – 2006 - 2007
Table 49 – Virgin Media cable revenue statistics – 2006 - 2007
Table 50 – xDSL subscribers – 2000 - 2007
Table 51 – Average UK residential broadband subscription prices – 2001 - 2006
Table 52 – BT retail and wholesale broadband subscribers – 2004 - 2007
Table 53 – Pipex revenue and pre-tax loss – 2006 – 2007
Table 54 – Forecast broadband subscriber growth – stronger market growth scenario – 2007 - 2011; 2017
Table 55 – Forecast broadband subscriber growth – weaker market growth scenario – 2007 - 2011; 2017
Table 56 – Availability and penetration of digital services – mid-2007
Table 57 – Proportion of bundled services by type – 2006
Table 58 – Statistical overview of the digital TV market – 2005 - 2007
Table 59 – Market share of TV homes by platform (primary sets) – 2005 - 2007
Table 60 – Digital TV take up, share of main TV sets – 2004 - 2007
Table 61 – Share of multi-channel TV – 2004 - 2007
Table 62 – Digital TV share of net additions – 2004 - 2007
Table 63 – Homes equipped for DTTV – 2006 - 2007
Table 64 – DTTV equipment sales – 2006 - 2007
Table 65 – Cumulative DTTV STB sales – 2006 - 2007
Table 66 – BT VoIP subscribers – 2006 - 2007
Table 67 – Cable TV subscribers and penetration – 2003 - 2007
Table 68 – Virgin Media subscribers, connected homes, ARPU and DVRs – 2006 - 2007
Table 69 – Virgin Media revenue, operating cash flow and operating income – 2005 - 2006
Table 70 – Free-to-view satellite households - 2005 - 2007
Table 71 – BSkyB subscriber statistics - 2005 - 2007
Table 72 – BSkyB ARPU - 2005 - 2007
Table 73 – BSkyB revenue, operating profit and annual change - 2007
Table 74 – Mobile voice traffic and total traffic – 2005 - 2006
Table 75 – Mobile operators, technology, subscribers and annual change – June 2007
Table 76 – Market share by operator – Q2 2007
Table 77 – Mobile subscribers and penetration – 1995 - 2007
Table 78 – Active mobile subscribers: contract and prepaid – 2001 - 2006
Table 79 – Mobile and fixed phones in homes – 2000 - 2007
Table 80 – Consumer methods of making/receiving calls – 2004 - 2005
Table 81 – Mobile subscribers by operator – 2000 - 2007
Table 82 – Mobile retail revenue by operator – 2000 - 2007
Table 83 – Total mobile retail revenue by sector – 2002 - 2006
Table 84 – ARPU by operator – 2006 - 2007
Table 85 – Data and voice ARPU per subscriber – 2002 - 2006
Table 86 – ARPU by subscription type – 2002 - 2006
Table 87 – 3G licence results – April 2000
Table 88 – Portion of spectrum use by sector – 2006
Table 89 – Mobile numbers ported – 2003 – 2005 *
Table 90 – Average mobile termination charges – 2000 - 2005
Table 91 – Average mobile retail call and messaging revenue – 2002 - 2006
Table 92 – Mobile market share by operator – 2004 - 2007
Table 93 – Share of net adds by network operator – 2005 - 2007
Table 94 – O2 net service and total revenue, OIBDA and annual change – Q2 2007
Table 95 – O2 SMSs sent – 2005 - 2007
Table 96 – O2 quarterly ARPU – blended, contract, prepaid and data – 2006 - 2007
Table 97 – O2 subscribers, prepaid and contract – 2005 - 2007
Table 98 – Vodafone ARPU – blended, contract and prepaid – 2005 - 2007
Table 99 – Vodafone mobile non voice as % service revenue – 2005 - 2007
Table 100 – Vodafone 3G and live! subscribers – 2005 - 2007
Table 101 – Vodafone subscribers and proportion prepaid – 2001 - 2007
Table 102 – Vodafone Group revenue by sector and annual change – 2006 - 2007
Table 103 – T-Mobile revenue, ARPU, EBITDA and annual change – 2006 - 2007
Table 104 – T-Mobile subscriber statistics – 2005 - 2007
Table 105 – Orange subscribers, contract and prepaid – 2006 - 2007
Table 106 – Orange service revenue: data as % of total – 2006 - 2007
Table 107 – Orange revenue – 2005 - 2007
Table 108 – Orange annual ARPU: contract, prepaid, blended, voice and data – 2006 - 2007
Table 109 – Virgin Mobile subscribers – 2005 - 2007
Table 110 – Carphone Warehouse subscribers – 2002 - 2007
Table 111 – Carphone Warehouse mobile revenue – 2006 - 2007
Table 112 – Percentage of prepaid customers per operator – 2003 - 2006
Table 113 – Average cost per mobile minute (pence) – 2002 - 2006
Table 114 – Total and average text messages sent – 1999 - 2007
Table 115 – Average SMS revenues – 2001 - 2005
Table 116 – SMS and MMS revenue by operator – 2006 - 2007
Table 117 – SMS and MMS volumes by operator – 2006 - 2007
Table 118 – Average monthly MMS use – 2003 - 2005
Table 119 – Vodafone live! customers – 2005 - 2007
Table 120 – Country statistics Ireland – 2007
Table 121 – Telecom revenue and investment statistics – 2007
Table 122 – Telephone network statistics – 2007
Table 123 – Internet user statistics – June 2007
Table 124 – Broadband statistics – March 2007
Table 125 – Mobile statistics – June 2007
Table 126 – National telecommunications authority
Table 127 – Market revenue shares by fixed, mobile and broadcasting sector - 2002 - 2007
Table 128 – Fixed-line, mobile and broadcasting revenue - 2005 - 2007
Table 129 – Fixed-line revenue by service - 2005 - 2007
Table 130 – Proportion of fixed-line revenue by service - 2004 - 2007
Table 131 – Unbundled loops and access lines – 2004 - 2007
Table 132 – LLU, shared access price - connection, monthly rental – 2004 - 2006
Table 133 – eircom access channels: PSTN, ISDN, ADSL and annual change – 2006 - 2007
Table 134 – Access paths – 2005 - 2007
Table 135 – eircom leased lines by type and annual change – 2005 - 2007
Table 136 – Numbers ported – 2003 - 2006
Table 137 – Indirect access lines: CPS and WLR – 2005 - 2007
Table 138 – Total narrowband fixed-line revenue by operator - 2006 - 2007
Table 139 – Total narrowband fixed-line revenue - 2005 - 2007
Table 140 – Fixed-line call volumes (thousand minutes): incumbent and OAOs - 2005 - 2007
Table 141 – Operator market share of fixed-line connections - June 2007
Table 142 – eircom turnover, EBITDA and CAPEX - 2001 - 2007
Table 143 – eircom revenue, EBITDA, profit and annual change - 2006 - 2007
Table 144 – eircom voice traffic revenue by type and annual change - 2006 - 2007
Table 145 – eircom data traffic revenue by type and annual change - 2006 - 2007
Table 146 – eircom access channels, subscribers and annual change – 2006 - 2007
Table 147 – eircom voice traffic minutes by type and annual change – 2006 - 2007
Table 148 – BT Ireland Internet subscribers - 2006 - 2007
Table 149 – BT Ireland revenue (All Ireland) - 2006 - 2007
Table 150 – Smart Telecom turnover, EBITDA, gross profit/loss - 2003 - 2005
Table 151 – Smart Telecom subscriber statistics by sector - 2005
Table 152 – Fixed lines in service and teledensity – 1995 - 2007
Table 153 – Direct / indirect access paths – 2005 - 2007
Table 154 – Broadband penetration by technology – 2006
Table 155 – Share of home Internet connections by technology – June 2007
Table 156 – Share of corporate Internet connections by technology – 2005 - 2006
Table 157 – Share of home Internet connections by ISP – June 2007
Table 158 – Total broadband subscribers by access type – 2002 - 2007
Table 159 – Narrowband subscribers; metered and flat rate - 2005 - 2007
Table 160 – Internet share by platform - 2004 - 2007
Table 161 – Broadband and Internet growth by platform - 2006 - 2007
Table 162 – Share of total broadband market by operator - 2004 - 2007
Table 163 – Proportion of DSL access by type - 2004 - 2006
Table 164 – UPC Broadband subscribers – 2006 - 2007
Table 165 – DSL access provision by type and operator – 2002 - 2007
Table 166 – eircom’s ADSL and bitstream lines – 2004 - 2007
Table 167 – Wireless hotspots and access points - March 2007
Table 168 – Forecast broadband subscriber growth – stronger market growth scenario – 2007 - 2011; 2017
Table 169 – Forecast broadband subscriber growth – weaker market growth scenario – 2007 - 2011; 2017
Table 170 – Statistical overview of Ireland’s broadcasting market - 2006 - 2007
Table 171 – Take-up of broadcasting services, % of total - 2002 - 2007
Table 172 – Digital TV: cable and satellite market share - 2004 - 2007
Table 173 – Corporate and SME use of VoIP – 2005 - 2006
Table 174 – Pay TV market access type: analogue and digital - 2002 - 2006
Table 175 – Digital Pay TV subscribers as % of pay TV – 2005 - 2006
Table 176 – Broadcasting subscribers by platform and annual growth - 2006 - 2007
Table 177 – Pay TV market: percentage analogue and digital (of pay TV) - 2004 - 2007
Table 178 – Broadcasting market breakdown by technology - 2004 - 2007
Table 179 – Subscribers to pay TV services - 2005 - 2007
Table 180 – Cable TV subscribers and penetration – 2000 - 2007
Table 181 – UPC Ireland operating data and subscribers – 2006 - 2007
Table 182 – Satellite TV antennae and home penetration – 1992 - 2007
Table 183 – BSkyB satellite TV subscribers – 2003 - 2007
Table 184 – Operator blended ARPU – 2005 - 2007
Table 185 – Mobile operators, technology, subscribers and annual growth – June 2007
Table 186 – Mobile subscribers and penetration – 1995 - 2007
Table 187 – Mobile-only subscribers and fixed-line connections – 2003 - 2006
Table 188 – Mobile market revenue - 2005 - 2007
Table 189 – Mobile traffic volume - 2005 - 2007
Table 190 – Mobile market share by operator- 2004 - 2007
Table 191 – Market share of net adds by operator – 2005 - 2007
Table 192 – Market share of revenue by operator – 2003 - 2007
Table 193 – Roaming tariffs by call type and by operator – 2007
Table 194 – Cumulative mobile numbers ported – 2003 - 2007
Table 195 – Vodafone subscribers – 2006 - 2007
Table 196 – Vodafone ARPU – 2006 - 2007
Table 197 – O2 annualised ARPU, blended, prepaid and contract – 2006 - 2007
Table 198 – O2 revenue, subscribers, SMS, monthly minutes and annual change – Q2 2007
Table 199 – Meteor Mobile subscribers – 2003 - 2007
Table 200 – eircom mobile services revenue, EBITDA and annual change - 2006 - 2007
Table 201 – 3 Ireland revenue and loss – 2005 - 2006
Table 202 – Share of mobile retail voice traffic by type – 2003 - 2005
Table 203 – Mobile voice minutes – 2005 - 2007
Table 204 – Prepaid versus postpaid share of subscribers – 2000 - 2007
Table 205 – Proportion of prepaid and contract subscribers by operator – 2006 - 2007
Table 206 – Meteor Mobile prepaid and contract subscribers – 2006 - 2007
Table 207 – SMS messages sent – 2000 - 2007
Table 208 – MMS messages sent – 2005 - 2007