BT drops below half share of fixed-line calls

BT's share of fixed-line call volumes fell below 50 per cent for the first time last year, an annual report by Ofcom has revealed.

This year's edition of The UK Communications Market, the regulator's annual survey of the nation's media consumption, shows BT's share of the fixed-line market stood at only 48 per cent in 2006, compared with 52 per cent in 2005.

Taking into account mobile as well as fixed-line calls, BT's market share was only 23 per cent in 2006, compared with 26 per cent in 2005.

Mobile operators all saw their market share remain flat or increase from 2005 to 2006, with the big winners being virtual operators such as Virgin Mobile, which resell other networks' connectivity rather than having their own infrastructure. The virtual operators' share of the market stood at 10 per cent in 2006, up from nine per cent the year before.

The report also surveyed the business market, where in 2006 BT had a smaller market share of fixed-line calls at just 38 per cent - a drop of one per cent from 2005.

Meanwhile, mobile data revenues in the business market increased by a hefty 60 per cent between 2005 and 2006, up from £500m to £800m. Ofcom attributes the rise largely to the increasing prevalence of smart phones with PDA functionality, which are able to access emails and web services. Mobile voice revenues in the business sector also rose, up 12 per cent from £4.6bn to £5.1bn.

A spokesperson for BT said "the calls and lines business is increasingly less what BT's business is about", adding: "We have certainly seen a reduction in retail customers but that's a result of competition."

The spokesperson said BT's new lines of business - particularly in IT, content and global network services - are booming. BT's retail broadband revenue grew by 19 per cent in the last quarter, while the company's internet telephony business grew by 23 per cent in the same period.

During 2006, O2 overtook Vodafone for the first time as the mobile network achieving the highest revenue. O2, which is owned by Spanish telco Telefonica, gained the largest number of subscribers in 2003 but it is only now that revenues have caught up.

There are now two mobile subscriptions in the UK for every fixed-line subscription. However, while the number of fixed-line connections continues to decline, it is happening at a slowing rate - possibly reflecting the requirement to have a fixed-line subscription in order to have a broadband connection.

David Meyer writes for ZDNet UK