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ADSL routs cable in broadband take-up battle

Tags:
Telewest,
Broadband,
Ntl,
Cable

Graeme Wearden ZDNet.co.uk

Published: 15 Mar 2004 14:05 GMT

BT is winning the race to sign up broadband customers in Britain after several years of hard work in beefing up its high-speed Internet offering.

Some three-quarters of new broadband orders placed in the last three months of 2003 were won by an Internet service provider reselling BT's wholesale ADSL products. This compares to around 15 percent of customers that chose NTL and less than 9 percent that chose Telewest over the same period, according to the respective companies' financial statements.

BT's success is a dramatic reversal from the situation in the UK just a few years ago, when the cable companies were setting the pace and BT was the one lagging behind.

According to Duncan Ingram, managing director of BT Openworld, BT is now the driving force in Broadband Britain.

"Cable companies may be beginning to suffer. A while ago, they were by far the major broadband providers, but now BT is filling that role with DSL," Ingram told ZDNet UK last week, as BT unveiled its consumer broadband strategy for the next few years.

BT's ADSL network now covers over 20 million UK homes and businesses, thanks to the success of its broadband registration scheme. BT has such a huge coverage are that some of its rivals are bemused that it isn't actually doing better.

"Full marks to BT for stating the obvious. It's no surprise that, in terms of overall numbers, DSL is now pulling away from cable," said Jon Hurry, head of Internet strategy for Telewest Broadband, in response in Ingram's comments. "The simple fact is that around 85 percent of UK homes can now access a DSL service, while the cable networks remain with our original network coverage of around 45 percent."

Hurry claims that Telewest, which serves 4.9 million UK homes, is outperforming BT in parts of the UK where both cable and ADSL are available.

"The only true indicator of consumers' preference is within our cable franchise areas, where both technologies compete head-to-head. Here, around 70 percent of broadband users are still opting for our blueyonder services, rather than choosing DSL from one of the many ISPs flogging BT's wholesale products," Hurry said.

Hurry added that BT has the advantage that over 100 ISPs are reselling its wholesale service -- many of whom have spent large sums of money advertising the benefits of ADSL.

Since the appointment of Ben Verwaayan as BT's chief executive, the telco has cut its broadband prices dramatically and speeded up the rollout of its ADSL network across the UK -- largely driven by its broadband registration scheme for rural and remote areas.

As recently as August 2003, ADSL and cable broadband were neck-and-neck in terms of overall take-up. Since then, ADSL growth has outstripped that of cable to such an extend that there are well over two million BT Wholesale broadband customers, and around a million and a half cable broadband users.

Telewest announced last week that it had signed up 47,000 new broadband customers in the fourth quarter of 2003. NTL said earlier this month that its broadband customer base grew by nearly 85,000 over the same period, while BT achieved growth of 414,000 wholesale broadband users.

Last month, a group of MPs warned that Britain's broadband market could suffer because BT is the only company capable of running a national high-speed network.