Broadband ramps up in UK - further growth expected

A slew of new research on broadband shows use of the technology is growing rapidly in the UK, albeit not fast enough - or fairly enough - for some.

The number of DSL subscribers alone has risen by 25 per cent to 2.72 million in the first quarter of 2004, putting penetration at 6.5 per cent of phone lines, according to analyst firm Point Topic.

Those numbers place the UK 10th in the world for total number of DSL subscribers, behind fellow EU members Germany, France and Italy, which rank fifth, sixth and seventh, respectively.

The UK's 6.6 per cent overall broadband penetration also lags the EU average of 7.5 per cent, says Pyramid Research.

A report from regulator Ofcom earlier this week counted 4 million UK broadband users - both DSL and cable - and 40,000 new connections each week at the end of April 2004. That places the UK third overall in Europe for existing connections, behind Germany and France.

However, the UK has a long way to go before reaching the government's goal of becoming the most competitive and extensive broadband market of all the G7 nations by 2005, according to the non-profit Access to Broadband Campaign.

The campaign says a better way to evaluate broadband success is by looking at what people are using it for. Once they're using it for communications via video and audio - not just email and web surfing - the technology will fulfil its potential.

Still, Pyramid is bullish on broadband's future in the UK and anticipates 19 per cent penetration by 2008. It also bets DSL will win out as the preferred technology and predicts the UK will have twice as many DSL as cable connections by that year.

The growth will be achieved through growing availability, lower prices and competition between DSL and cable providers, says Pyramid, though a number of competitive issues still need to be resolved.

One recent entrant to the UK broadband market, Telefonica UK, is ready to play along with continuing Ofcom regulation that could create even more growth and competition.

James Waterworth from Telefonica UK today said in a statement: "We welcome Ofcom's ongoing efforts to create a fairer and truly competitive marketplace... There is still much to be done on the regulatory side and Telefonica UK will be actively engaging with Ofcom to achieve an open broadband market in the weeks and months to come."