O2 LLU coverage at 57% of population

Thursday 15 May 2008 14:17:01 by Andrew Ferguson

O2 who are one of the newer entrants to the UK broadband market look set to grow rapidly during 2008. In the first quarter of 2008 they added 60,711 customers taking their total to 131,420.

The O2 LLU ADSL2+ service is available on over 1,000 exchanges which covers some 57% of the population. The announcement earlier in May of nationwide coverage by reselling BT Wholesale services should boost the rate of sign-ups further.

BT Group publishes latest figures round-up

Thursday 15 May 2008 13:15:03 by Andrew Ferguson

With LLU coverage around the 70% mark and line rental and call deals being pushed heavily it is surprising to see such upbeat results from the BT Group. Part of this is down to the group repositioning itself from being a simple telephone service company to a complex web of interwoven business groups delivering a wide variety of services.

Overall there were some 12.7 million broadband customers at the end of March 2008, this includes unbundled connections which still use an Openreach copper telephone line. BT Retail had some 4.4 million customers, and LLU accounts for 4.3 million lines. The last quarter saw some 499,000 connections, of which some 30% were with BT Retail (150,000 net additions).

BT Wholesale saw its revenue dip by 12% in the fourth quarter; broadband brought in £54 million less revenue due to price reductions which were worth £24 million and another £30 million due to the continuing migration to LLU connections. One interesting point was that premium rate services (PRS) saw a decline in revenue, which perhaps reflects the various telephone competition/voting problems that have plagued UK media recently.

BT Openreach was the recipient of some of the revenue lost by BT Wholesale, since it saw an increase of £45 million in revenue from other communications providers, but this was balanced out by the loss of revenue from other lines of business within BT. The last quarter saw some extra 600,000 LLU lines connected.

BT Retail seems to be holding its own with reasonable growth in subscriber numbers. Its expansion from just calls and broadband is reflected in its Home IT Support Service having some 41,000 customers, up 18,000 during the last year. BT Vision the FreeView/IPTV hybrid has reached a total of 214,000 customers, with 94,000 net additions in the last quarter. The average number of views of VoD content per subscriber per month is 29.

The 21st Century Network seems to be progressing, and the result is it is already delivering cost savings of the order of £600 million. As yet 21CN has not really impacted the average broadband user yet. The broadband product Wholesale Broadband Connect should reach a critical mass during 2009, and the investment needed from providers to exploit the service appears to be slowing down the release of retail products. 21CN, when completed, promises a much more integrated and software driven system which should make service switching cheaper and quicker and the roll-out of new products faster.

Ian Livingston, the incoming Group CEO, has a tough job ahead. The next few years are crucial in deciding where BT will be in the next twenty to thirty years. Ben Verwaayen brought BT kicking and screaming into the broadband arena, but the time for the next leap forward is due.

Kangaroo jumps onto the seesaw

Wednesday 14 May 2008 13:42:48 by Andrew Ferguson

The joint video on demand project between BBC Worldwide, Channel 4 and ITV may not appear until 2009 it has been suggested on DigitalSpy.co.uk. The name of project at launch is also likely to be SeeSaw.

The delay to the launch may be because the BBC Worldwide involvement has not yet been approved by the BBC Trust, and it is not clear how long the Office of Fair Trading investigation will take.

If the name SeeSaw is truly the real products name it seems an odd choice as the title sounds more like a kids TV programme name.

Could tables be turned on Carphone Warehouse?

Wednesday 14 May 2008 13:01:29 by Andrew Ferguson

There was a time in UK broadband when it was the smaller providers with 200,000 or less customers that were seen as the prime takeover targets, but now that economies of scale are the big thing even large providers like Tiscali and Carphone Warehouse appear to have an unsettled future.

We reported yesterday that Tiscali had said no to the Carphone Warehouse offer for Tiscali, but it seems Tiscali has not formerly told Carphone Warehouse this, so they may still be in the running.

"We have not heard anything from Tiscali, so as far as we are concerned we are still in the game,...

We are regarding the reports as speculative."

Carphone Warehouse spokesman talking to The Independent

The Independent article also suggests that Orange may be the next big acquisition target among the remaining large players.

Analysts quoted in The Financial Times suggest that if Carphone Warehouse is sidelined at such an early stage of the bidding that it may itself become a target for acquisition.

With the number of large providers shrinking there is a real danger that the business plans of one or two providers will influence regulatory bodies to the point where a single companies interests are catered for rather than looking at the much wider market which still has hundreds of smaller providers. The needs of consumers and small businesses coming a distant third.

Zen to increase usage allowances on some products

Wednesday 14 May 2008 12:29:59 by Andrew Ferguson

Some customers of Zen Internet will have a small windfall from 1st June 2008 when their usage allowances increase.

The download allowance for Zen 8000 Lite will increase from 2GB to 5GB and remain at £17.99 per month. Zen 8000 Active will see an increase from 20GB to 25GB and keep the same monthly fee of £24.99.

The increase is most significant for those on the Lite package and should allow those customers to embrace the increasing amount of video available on the internet. For a small number of Active customers they may see cost savings if they were occasionally buying additional usage.

Tiscali reject Carphone Warehouse bid

Tuesday 13 May 2008 11:42:26 by John Hunt

Carphone Warehouse has been excluded from the first stage of bidding for Tiscali after its offer of £550m for the UK assets was rejected following a four hour board meeting. Tiscali has a market value of around £1.13 billion. Carphone last week sold a 50% stake in its high street stores to Best Buy to raise funds expected to be used for growth both organically and via acquisition.

With Carphone Warehouse out of the running, potential bidders remaining are thought to include Vodafone Group and BSkyB in the UK as well as Wind, the Italian mobile operator, and Swisscom, the owners of Italian broadband provider Fastweb. Tiscali believe the process is going as planned and that they are in the process of opening their books to six of the companies who made it to the shortlist.

"Until now, the process has been going exactly as expected. In the definition of the shortlist, we have not considered those who did not realise the industrial value of the group."

Mario Rosso, (CEO) Tiscali

The sale is hoped to be finalised next month.

Four times more core bandwidth in prep for 50Mbps cable products

Tuesday 13 May 2008 08:51:49 by Andrew Ferguson

The rise of broadband has at times seen the bottleneck that old fashioned dial-up presented move from the connection to the customers home to the various elements of the providers core network. As part of its upgrades to prepare for the roll-out of its 50Mbps cable broadband service, Virgin Media is to upgrade the speed of its core fibre network.

The upgrade should see the core network increasing from 10Gbps to 40Gbps without the need to replace the many kilometres of fibre linking the major nodes. From the Silicon.com article which reveals the connection has already been tested between London and Manchester, it is not clear how much of a difference this will make to local contention issues.

Tiscali has a number of bidders for its business

Monday 12 May 2008 21:37:07 by Andrew Ferguson

Reuters reveals the news that the Tiscali group has received an unspecified number of bids for the sale of some or all of the Tiscali group.

It is believed that Carphone Warehouse has made an initial bid of £550m for the UK specific parts of Tiscali. The UK arm of Tiscali has an attractive share of the market at some 15% of broadband connections. In the groups home country of Italy they only manage around 5%.

If Carphone Warehouse was to gain the UK business it would overnight become the largest retail broadband provider, and gain a wholesale operation that sells services to a number of other providers. For a provider such as Vodafone, the purchase would allow them to become a major player rather than a provider simply reselling a BT Wholesale managed service. The reasons for BSkyB to buy Tiscali seem less certain. It has been suggested it was to gain access to the Tiscali TV platform, but this could have been acquired for a much smaller price when the original HomeChoice service was up for sale.

Hopefully any sale will take place quickly since if the UK arm is left in limbo for too long, investment in network capacity may stall leading to a worsening service as more customers join the network ,in addition to customers use of broadband expanding to make it a more central form of entertainment in the home.

Eclipse launches customised broadband services with QoS

Monday 12 May 2008 13:07:58 by Sebastien Lahtinen

Eclipse Internet has this morning announced the launch of its range of broadband services which can be 'tailored by customers to suit their individual online needs'.

In practice, this means customers have the ability to login onto a part of their website and select the relative priority being given to different types of traffic (e.g. streaming, web browsing, p2p, gaming and so on) to suit their own family or business requirements.

"We believe these services will provide our customers with an unparalleled online experience [..] For the first time, broadband users will be able to customise their service to suit their usage – so home workers can optimise their broadband to achieve the best possible connection to their company VPN, for example, while online gamers can prioritise gaming over other applications. [..] The inclusive usage limits mean customers pay only for what they use, which also allows us to offer much faster broadband than is achievable with unlimited services."

Mark Thomas (Head of Sales and Marketing), Eclipse Internet

Flying their ISPA 'Best Business ISP' flag Eclipse is trying to focus on meeting the needs of users looking for more control over how their broadband is provided. Packages start from £13.95/month for residential offering (although a current offer of first three months for £9.95/month is available) which includes 1GB per month of usage. A 10GB/month package "Home Select" is available for £17.95 whilst the top end "Home Pro" service with 50GB/month costs £29.95. Additional traffic is charged at £1.25/GB. Business packages are also available.

Eclipse Traffic Controller Tool

The tool offered by Eclipse will help users manage the download traffic and prioritise critical applications based on their own preferences. So for example, parents using VoIP to make phone calls to relatives in Australia over the Internet won't suffer from degraded service when their kids are downloading movies or the latest copy of a Linux distribution online. Similarly children playing online games could be set to receive priority over their parents' YouTube browsing.

Carphone Warehouse gets £1.1bn for share of retail stores

Friday 09 May 2008 11:21:27 by Andrew Ferguson

Carphone Warehouse has sold a 50% share in its high street stores to Best Buy. The move may see Best Buy bringing its warehouse style computer and electronics retailing muscle to Europe, but they would not be the first since PC World stores are already large and sprawling offering pretty much the same products.

The interesting thing is what will Carphone Warehouse do with the £1.1bn. Suggestions are that it will be used in part to reduce the debt within the group and may help to fund further growth of the broadband arms that are Talk Talk and AOL Broadband.

BT Retail launches its BT ToGo smartphone

Thursday 08 May 2008 11:05:27 by Andrew Ferguson

It almost seems a natural progression to sell a Wi-Fi and GPRS enabled smartphone as part of a broadband package. BT Retail has gone down this line with a HTC S620 or S710 smartphone handset forming the core of the BT Broadband Anywhere service.

The service is touted as allowing you to take your broadband anywhere, though as plenty of places have pointed out GPRS access is not broadband, but the prevelance of BT OpenZone and FON hotspots means it should not be difficult to find a fast connection in a town centre. Where the BT ToGo service appears to make up for the lack of 3G is by integrating the BT Yahoo email service and one hopes that the Wi-Fi connectivity has been streamlined to make this seamless.

Four tariffs are available which are in addition to the subscription for the BT Total Broadband service. Each includes 10MB of GPRS data downloads and unlimited Wireless downloads.

• Broadband Anywhere 50: 50 free texts and 50 minutes of calls to 01,02,03 and 07 numbers. £5 per month extra
• Broadband Anywhere 150: 100 free texts and 150 minutes of calls. £15 per month extra
• Broadband Anywhere 250: 150 free texts and 250 minutes of phone calls. £20 per month extra
• Broadband Anywhere 600: 700 free texts and 600 minutes of calls. £35 per month extra

The HTC S620 is free, the HTC S710 with slide-out keyboard and 2 Megapixel camera is available for a one-off upgrade fee of £29.99. Additional handsets can be purchased for £29.99 each and used on the same tariff for a £5 per month running cost. GRPS data in excess of the 10MB allowance costs a whopping £1.50 per MB, but BT is running a promotion with unlimited GPRS until 31st July 2008. Apparently an unlimited GPRS option will be available after 31st July, but no price is available at this time.

The BT ToGo service is probably not going to appeal to the gadget freaks amongst us who love to spend days figuring out how to set-up their POP3/SMTP mail services. It is much more likely to sell to people who've seen what others can do on their smartphones but are put off by the initial handset cost combined with monthly subs for WiFi access and the mild cursing as we try to use the advanced features. A small laptop and 3G broadband dongle would provide much better mobile broadband, but then who can fit a laptop into their trouser pocket even if you overlook the laptop price and 3G subscription.

Virgin Media adds 88,400 cable broadband customers in last quarter

Thursday 08 May 2008 11:00:01 by Andrew Ferguson

Virgin Media, while not expanding the coverage of its cable network, is still managing to sign-up customers with 88,400 additions to its cable broadband packages and some 36,800 TV connections added in the quarter ending 31st March 2008.

"Our first quarter results represent another solid operational performance. In particular, churn continued to decline, reflecting the emphasis that we have placed on this area. Our results demonstrate that our customers are continuing to respond positively to our compelling consumer propositions. We remain focused on leading in next generation broadband and redefining the TV experience through on-demand. With our focus on customer value, reducing churn and stabilizing ARPU, we are well positioned for growth."

Neil Berkett, Chief Executive Officer of Virgin Media

The news is not all brilliant as the Virgin Media ADSL service lost some 7,800 subscribers and looking at the comments from customers, appears to suffer from a lack of investment.

For Virgin Media the future is firmly pinned on the hope that its 50Mbps cable broadband package will appeal to sufficient numbers of customers to make the investment worthwhile. Virgin Media, when it was NTL and Telewest, was always competing with BT Retail who were generally fairly easy to beat on price. The rise of high-speed ADSL2+ at a price point that undercuts the faster Virgin Media packages presents a real challenge. 50Mbps broadband will appeal, but will the price premium above the current 20Mbps product appeal to more than 5 or 10% of customers. Currently something like 25% of cable customers opt for the 20Mbps service at £37 a month.

Further competition with fledgling fibre to the home services offering 100Mbps connections on the way. So how the big two in the form of BT Retail and Virgin Media respond as 2008 develops will be interesting.

Bournemouth picked for fibre roll-out by H2O networks

Thursday 08 May 2008 09:08:50 by Andrew Ferguson

January saw the news that H2O networks were looking at running fibre connections through the sewer network to provide 100Mbps connections to homes. Bournemouth has now been announced as the town to be the first on the roll-out calendar according to the BBC.

H2O Networks is investing some £30 million in the service that will be available to some 88,000 homes and businesses in the area. The project far exceeds the size of the fibre to the home system planned for Ebbsfleet. The website for FibreCity provides some more details on the project and should provide details of the various packages once available.

If the take-up of the service is enough to make the investment worthwhile then we should see more towns getting the H2O treatment. One real danger for the early entrants to the fibre to the home market is that if it is successful the big players may muscle in and use their marketing might to retain market share.