2013 United Kingdom - Telecoms, IP Networks, Digital Media and Forecasts

BT secures monopoly on UK’s public rural broadband spending

BuddeComm’s annual publication, UK - Telecoms, IP Networks, Digital Media and Forecasts, provides a comprehensive overview of the trends and developments in the telecommunications and digital media sectors of one of Europe’s largest and more progressive markets. The report includes the regulator’s market data to the end of 2011, telcos’ financial and operating data to Q4 2012, and market developments to March 2013.

Economic background

The UK has suffered from lower economic output for three of the last five years. Economic data for the fourth quarter of 2012 showed the economy could slide into a significant triple-dip recession. Although not in the Eurozone, the UK during the last two years has also been obliged to contribute to the IMF and ECB bail-outs of southern European economies, thus exacerbating its own liquidity difficulties. GDP growth for 2013 is expected to be less than 1%, while the government’s March 2013 budget has reflected the effects of the stalled construction industry, lower industrial production and falling economic output.

Telecom market overview

Total telecom revenue fell in 2011 for the third successive year, by some £800 million, and revenue may have fallen by a further 1.5% in 2012. Partly attributed to regulatory measures, falling revenue also reflects competitive pressure on pricing as also consumer reluctance to overspend on services. Investment in the telecom sector has also been affected by the economic climate, and has been channelled principally to upgrading cable and fibre networks, as also mobile networks with LTE technologies and additional spectrum acquisitions.

Mobile broadband market

Mobile broadband based on LTE and to a lesser extent WiMAX/WiFi will be central to the market’s development in coming years. LTE, launched by EE in late 2012, is expected to have wider commercial use later in 2013 following the significant auctions held earlier in the year. Amended rules on refarming spectrum for 4G will also hasten the take-up and range of mobile broadband services. As a result of the network sharing deals among MNOs, it is likely that there will be only two major LTE networks, with one Vodafone-O2 competing with EE joined with H3.

Key telecom parameters – 2010; 2013

(Source: BuddeComm)

Market Highlights

• BSkyB’s play to acquire O2’s fixed-line and broadband business will substantially enhance the broadcaster’s own market share in the telecoms sector.
• BT’s launch of commercial FttH services and its anticipated reduction in wholesale FttC pricing will boost the number of customers able to make use of broadband at 80Mb/s.
• Ofcom faces some organisational changes with its slated merger with the postal services watchdog Postcom. The Digital Economy Act also extended Ofcom’s authority to cover TV, radio and on-demand services. It jointly regulates VoD content with the industry body ATVOD.
• The Chinese influence in the UK’s telecoms landscape is becoming more pronounced, with the launch of China Telecom as an MVNO, and with H3 signing up Huawei with a five-year managed services contract. Huawei has also committed to investing substantially in the UK.
• London has become a centre-piece for municipal WiFi networks, with 16 of 33 boroughs looking to roll out free WiFi services.

This report is essential reading for those needing high level strategic information and objective analysis on the telecom sector in the UK. It provides further information on:

• Market liberalisation and regulatory issues;
• The impact of the global economic crisis;
• Telecoms operators – privatisation, acquisitions, new licences;
• Mobile data market developments in coming years in light of spectrum auctions and new license awards;
• 3G developments, regulatory issues and technologies including HSPA and LTE;
• Broadband migration to an FttH architecture;
• Historical and current subscriber statistics and forecasts;
• ARPU statistics and forecasts.

Data in this report is the latest available at the time of preparation and may not be for the current year.