BT is now boasting that it has recorded its best three months ever for wholesale broadband connections, racking up 50,000 new ADSL lines a week. BT’s forthcoming interim figures are expected next week.
BT Wholesale CEO Paul Reynolds said in a prepared statement: These are fantastic figures for BT, for the hundreds of service providers we support and for Broadband Britain. The UK market is really taking off and we have just overtaken Germany in terms of broadband take up. The UK already leads the G7 in terms of ADSL availability thanks to BT’s investment and so it is hugely encouraging to see us also climb the league tables for broadband adoption.
The huge surge in connections was largely due to BT Wholesale’s innovation in stretching the limits of ADSL so that homes beyond 6kms from an exchange can now access broadband. This breakthrough led to a dramatic increase in orders as we were suddenly able to satisfy the pent-up demand that existed in many areas. It was also the case that many more communities had access to broadband in the quarter thanks to the continuing roll-out of broadband by BT.
The former UK telecoms incumbent also confirmed that BT Retail’s share of the net additions for the quarter had remained broadly unchanged at 30%, taking its total customer base to 1.28 million customers. This goes against some reports which suggested that BT Retail’s market share had fallen to below 24% after being squeezed by over 200 broadband suppliers in the UK including AOL UK, NTL, and Wanadoo.
Yet despite the talk of broadband uptake, this does not actually reflect the fact that BT still has one of the lowest broadband market shares of any European incumbent. BT shares the broadband pie with a lot of domestic and foreign competitors, whereas France Telecom SA and Deutsche Telekom AG have far larger slices in their domestic markets.
BT said that in the UK, broadband per 100 people is higher than Germany at 7.5. This ignores the fact that Germany has a larger population of approximately 82 million people, compared to the UK’s roughly 60 million people. France, with a similar sized population to the UK, has a higher rate of 8.3 people per 100. That said, both France and Germany are growing at a slower rate than the UK.
Ofcom (the UK telecom regulator) gives the following figures for broadband per 100 people in Europe: Spain (6.1), Italy (6.3), Portugal (6.4), Germany (6.7), the UK (7.5), France (8.3), Sweden (12.1), Denmark (15.6), and the Netherlands (15.8).
The announcement seems to be a fight-back by BT Wholesale to reassure investors, after it was stung by reports that Pierre Danon, the chief executive of BT Retail, is reportedly tired of trying to compete with residential broadband suppliers that are taking advantage of regulatory reform to undercut BT broadband prices.
Danon is reportedly considering using and investing in the cheaper alternative offered by local loop unbundling in order to cut costs. BT Retail is by far the biggest customer of its wholesale arm, and moving to LLU would seriously damage revenues at BT Wholesale.