SME Toolkit

Broadband: The state we're in

Cath Everett ZDNet.co.uk

Published: 30 Mar 2004 17:35 BST

Back in 2001, the prime minister, Tony Blair, pledged that the UK would have the most extensive and competitive broadband market of all the G7 nations by 2005. A reassuring statement, given the well-proven link between technology infrastructure provisions, whether that be telephones, PCs or the Internet, and socio-economic development.

The idea is that for UK plc to remain competitive it is imperative that it has universal access to key technologies. So three years on, is the UK on track as far as broadband coverage and adoption goes or was the prime minister's promise merely rhetoric?

"It depends on who you ask. Against the government's targets, I believe we are [on track]. For BT's targets, we're well ahead. But for the UK as a whole, we're about two years behind where we should be," says Clive Longbottom, service director at analyst Quocirca.

Some 3.2 million homes and businesses had broadband connections in place at the end of last year, with 1.82 percent of these being digital subscriber line (DSL) and 1.36 million being cable modem-based, according to telecoms regulator Ofcom. An additional 40,000 new connections are being added each week.

Canada is number one
In real terms, this means that 12 percent of the country's total 25 million households use the technology, while telecom research firm Ovum indicates a figure of around 18 percent for businesses. But the market is growing rapidly and by 2008, Ovum expects these figures to hit 51 percent and 77 percent respectively.

But despite these aggressive predictions for the future, the UK's current broadband penetration isn't much to shout about. Ofcom figures from the end of September last year put Canada firmly ahead of the pack with 14.5 percent of its citizens using fast connections, followed by Denmark with 11.1 percent and Japan with 9.1 percent. The UK, meanwhile, trails behind in 10th place with a mere 4.4 percent.

The UK's rather disappointing placing is unlikely to inspire any street parties but the Department of Trade and Industry (DTI) professes to be quite happy with progress to date. At the end of last year, it published its bi-annual indices showing that based on 'extensiveness', which combines coverage and the addressable market, the UK ranks alongside the US in third place.