Popularity of different broadband technologies in UK revealed
The calendar year may have ended for 2019 but the financial year has one more quarter to go, but before the various providers share their good and bad news from the FY Q3 19/20 results we want to share our chart showing the popularity of the different broadband technologies in the UK since 2012.
The chart is based on our crowd sourced speed test results, so will reflect what we see each quarter. Since the results are crowd sourced there is the chance that we might see more of one provider due to them having issues one quarter and less the next when everything is running as expected, hence why looking at the direction of the trend is more important than the individual value in any quarter.
The crossover point in Q2 2017 shows when ADSL/ADSL2+ started to be less popular than the VDSL/FTTC partial fibre services.
We have commented on the relatively flat performance of Virgin Media previously but with the recently move to make the M100 (108 Mbps average speed service) product the entry level speed and some free upgrades we might the long term trend change as 2020 progresses. The footprint for Virgin Media was pretty static for the earlier years of the chart but the last few years has seen the footprint grow which makes the slight downward trend more concerning.
The observed FTTP footprint is growing with us identifying 4.66% of speed tests in Q4 2019 using a full fibre service up from 2.79% at the end of 2018. If the 4.66% is representative of the actual fixed line connections that are FTTP based then this suggests actual connections are running at around 1.1 million i.e. an approximate take-up rate of 32% for full fibre. Some full fibre providers do provide actual connection data in their financial results but as lots do not this observed figure will give us all a bit of an idea for what is happening beyond the many shiny press release statements.
Some may just about notice the small G.fast line at the bottom of the chart, the number of speed tests is increasing using the partial fibre technology that is available to over 2.1 million premises across the UK. At the end of 2018 we saw 0.32% of tests using G.fast and at the end of 2019 it was 0.36% of tests. While the obvious conclusion to draw from the figures is that G.fast is not selling, it is worth remembering that sales of Openreach FTTP in similar areas i.e. high VDSL2 speeds of 50 Mbps and faster and invariably Virgin Media also available are not dissimilar. In 2020 now that the price premium for G.fast and Openreach FTTP has shrunk so that it is selling for the same or very close to the price of the 80/20 VDSL2 products we may see demand increase.
While the UK Government has set a 100% Gigabit availability target for the end of 2025 as yet no-one has dared to put forward a target for how many will be using full fibre or other Gigabit technologies.
A lot of the demand curve will depend on how popular 4K TV streaming becomes and how long before the average household has two or three 4K televisions hooked up to the Internet. Other demand factors such as the ability to work from home and faster upload speeds making FTTP a must have will have an impact but those are likely to remain relatively niche compared to the size of the video streaming audience.
It is possible that game streaming services such as Google Stadia could drive full fibre adoption but with 35 Mbps needed for 4K streaming of games something like 68% of the UK already has a broadband connection option that will support 50 Mbps or faster speeds.
A warning as the services that are likely to drive demand for faster connections are those that will chew through large amounts of bandwidth, we expect that while FTTP is the most reliable broadband technology the moans about slow speeds will not vanish. In short the service differentiator is increasingly going to be how providers perform during peak streaming demand periods i.e. those one or two evenings each month when a must watch TV show/football match is being streamed and it coincides with a new game being available over Stadia.
We'd like to predict when FTTP based speed tests will take over from the dominate FTTC services but with no sign of a dip in FTTC take-up yet and the continuing switchover from ADSL/ADSL2+ to FTTC is likely to drive FTTC take-up even higher. This means it is going to be a couple more years before any predictions for when FTTP will be the dominate technology in terms of what we see the public using.