The UKs biggest ISPs have continued to consolidate their grasp on the market to the detriment of smaller providers, the release of financial results for the beginning of this year show. The three of the UKs big four providers to have released results so far all increased their broadband subscriber numbers:
Around 19 million UK households take a broadband service and, again very roughly, 17 million go to just four ISPs.
•BT: 136,000 new customers (new total: 6.2 million)
•Virgin Media: 30,500 new customers (new total: 4.3 million)
•Sky: 212,000 new customers (new total: 3.8 million)
The vast majority of UK broadband users get their services from the UKs "big four," the three providers above plus TalkTalk broadband. Around 19 million UK households take a broadband service and, again very roughly, 17 million go to just these four. Its likely that many broadband users are coming to BT, Sky, Virgin Media from TalkTalk. As I've written on this site in the past, the provider has suffered from a number of problems over the past few years including high, though falling, levels of complaints especially as a result of billing mix ups.
However, TalkTalk arent likely to have lost so many customers that theyll lose their place among the largest ISPs. People are also coming from elsewhere and, particularly, from the smaller ISPs including the O2 and Be broadband network which lost another 2,500 customers over the last quarter.
O2, who looked at one point as though they might start to challenge some of the bigger broadband players, also lost customers last quarter, 5,000 of them, and now has just 600,000 subscribers in all. Orange, another ISP who deserve to do better given their huge number of mobile phone customers, had about 700,000 customers in the final quarter of 2011.
Leaving aside the not inconsiderable benefit of the trouble at TalkTalk, whats driving UK consumers towards the markets biggest players? Reassuringly for those that care about the countrys broadband infrastructure, the answer to that seems to be, at least partially, new technologies such as fibre.
The O2 and Be network offers some of the fastest ADSL2+ speeds and has always catered to gamers and heavy downloaders with low contention ratios and less restrictive fair use policies. But the users who cared about those things are now the same ones moving to providers where they can get fibre speeds that are ever outstripping the old copper network. O2 put their fibre plans on hold for a second time earlier on in the year and TalkTalk have done little to promote their fibre options.
Sky, on the other hand, not only recently started offering a fibre option but promoted it heavily alongside a hefty discount and sign up bonus. Having said that, fibre take up isnt high enough to account for all the new additions so its fair to assume that another key driving technology is the digital, cable and satellite TV services the biggest providers are offering.
In terms of ensuring a highly competitive broadband market in the UK, that trend is slightly more worrying. Smaller providers will eventually be able to differentiate themselves in the fibre market as infrastructure begins to mature and the exchanges are unbundled. But it's highly unlikely that theyll be able to compete on the TV side. Julia Kukiewicz is editor of Choose, a consumer information site covering home broadband as well as other markets. Choose provides industry news and service reviews of the UKs ISPs, including a comparison of TV juggernauts Sky and Virgin, as well as running a home broadband market performance guide.