Virgin Media reports 54,600 new cable customers

Thursday 07 August 2008 14:51:54 by Andrew Ferguson

The second quarter results from Virgin Media show a growing interest in its premier 20Mbps cable broadband service, with an 82% increase in the number of subscribers to their fastest broadband product.

Cable broadband (termed On-net by Virgin Media) saw net additions of 54,600 in the quarter, which is an increase on the previous quarter which saw 45,800 additions. The rise in subscriptions for its 20Mbps offering, means that 9.3% of cable broadband customers take the fastest option. Additionally, the upgrade of the 4Mbps service to 10Mbps which is 70% complete has also resulted in more people opting for that price point. The total number of cable broadband customers stands at 3,563,400 up from 3,191,900 a year ago.

Virgin Media provides ADSL services to the parts of the UK its cable service does not reach, and the story is somewhat different, with Q2 2008 having lost customers, 272,700 now compared with a peak of 287,300 in the fourth quarter of 2007.

Mobile broadband is apparently on the way from Virgin Media and is to be expected in the fourth quarter. Other developments are that the much talked about 50Mbps service is still on course for the second half of 2008 even though it seems like an eternity since the news of the Ashford trial in September 2007.

With just 9.3% taking the 20Mbps £37 a month top tier broadband product, one has to wonder how many will opt for what one presumes will be a more expensive 50Mbps product. Virgin Media has steered clear of publishing usage limits, but if it was to offer entry level products with a clear usage limit of 40GB a month that saw the 50Mbps product retailing at £20 a month it would probably see a rush to join Virgin Media for the first time. The existing pricing structure could still operate for those with high usage requirements, but retain the traffic management tiers that it has now.

Orange sees 2.5% of its broadband customers leave

Thursday 07 August 2008 14:07:05 by Andrew Ferguson

Most of the bigger broadband providers are gaining customers, but Orange broadband has been having a sticky period for a while now, with customer numbers down from 1.142 million customers in September 2007, to 1.063 million at the end of June 2008. In the last quarter the total number of subscribers was 2.5% down, what is more worrying for the company is that this means more than 2.5% decided to leave, as one would expect to see some new sign-ups in the quarter too.

The full quarters results are available on www.francetelecom.com. Revenue was down some 7.7%, but the number of unbundled lines within the UK for Orange rose from 23% in 2007 to 40% currently. In theory putting customers onto a LLU network should provide cost savings, but the costs of rolling out a LLU network are high, and as fibre based networks edge ever closer companies will need to be careful to ensure they do not over invest in LLU without considering the future path to a more fibre lead future.

The other large provider to have shown a decline in customer numbers has been AOL Broadband, but most other large providers are still showing a growth in numbers, with new entrant O2 managing to add a healthy number of customers each quarter. So one can be sure that there will be boardrooms around the UK now looking at why some providers are still able to attract new sign-ups to broadband, and as the market increasingly becomes a switchers market, why are existing broadband users not switching to them.

How long does Phorm have left?

Thursday 07 August 2008 12:16:45 by Andrew Ferguson

Phorm the online ad system that claims to generate revenue for providers through better targeting of online adverts is very likely to be feeling the effects of the credit crunch. In the United States NebuAd which was proprosing a similar system has let its PR agency go, and laid off a number of staff. The Register tried to get confirmation of the numbers involved but was unable to.

The UK government has EU commissioner Viviane Reding breathing down its neck, with a deadline of the end of August 2008 to respond to a letter about Phorm from the European Commission. The precise content of the letter is unknown, but it is not unknown for the EU to take a different position to the UK government on issues in this arena and others. It is thought to hinge on whether Phorm breaches European Data Laws.

For Phorm to succeed it has to be able to charge more than normal advertisements, particularly as Phorm, the site the advert is placed on and the broadband provider will all take a cut from the advertising revenue. The ability to target users has already been cut, by the requirement for Phorm to be opt-in, combine this with news of advertising revenues dropping and the chance of Phorm succeeding looks small even without the EU stepping in.

7Digital in discussion over music sales with providers

Thursday 07 August 2008 12:11:19 by Andrew Ferguson

7Digital is one of the sites that you can buy music from online, and offers a mixture of DRM free MP3 files and WMA format files with prices starting at 50p per track.

What is of interest is that according to PC Pro, 7Digital has entered into discussions with broadband providers to offer downloadable music to customers as a part of their broadband deal. It looks like this would mainly be a billing arrangement, so that the tracks you bought on 7Digital would be added to the monthly bill from your provider.

Partnering with the broadband providers could be a clever marketing move, since if they can be mentioned as a simple source of legal music downloads on any file sharing letter sent out, the sales at the company mentioned are likely to increase.

Is Virgin Media to sell its business division?

Tuesday 05 August 2008 12:09:42 by Andrew Ferguson

Virgin Media according to The Times (as spotted by DigitalSpy.co.uk) is looking to raise some £600m by selling off its ntl:Telewest business communications unit. Divesting itself of its business division may provide the money that is needed for the investment needed to get DOCSIS 3.0 rolled out across its network.

The full article on The Times, reveals that rather than a simple sale a combination with another business communications provider looks most likely. Thus is mentioned, which itself is currently being bought for £329m by Cable & Wireless.

Raising money during a credit crunch for things like network upgrades such as the DOCSIS 3.0 roll-out needed to provide speeds of 50Mbps and faster across the cable network are crucial for Virgin Media in the next couple of years. The Virgin Media ADSL products seem to have consistently suffered from under investment, and while the original launch of the Virgin Media name suggested a lot more investment in this area, to date nothing has happened. Interestingly changes on their ADSL network, were linked to a wholesale deal with Cable and Wireless.

The second quarter figures for Virgin Media are expected on Thursday, and after the drop in broadband customers seen by AOL Broadband and Orange it will be interesting to see how Virgin Media is holding up in a market that is much more interested in the lowest price rather than the products performance.

All the eights with Be Broadband

Tuesday 05 August 2008 10:01:27 by Andrew Ferguson

Be Broadband is running an "888" promotion for its Be Value package. For the remaining calendar months of 2008 the up to 8Mbps product will be billed at £8 per month for new customers, reverting to the standard price of £14 per month in 2009. The promotion also officially launches on 08/08/08, but the Be website is already providing details of the promotion.

The other key points on the product, are the £24 connection fee and a free wireless Be Box modem/router. The broadband, while an up to 8Mbps service, utilises ADSL2+ to offer an upstream speed of up to 1.3Mbps (as with download connection speed the upstream will depend on things like length of telephone line). Be is also still offering the Value package with unlimited usage.

Broadband and phone line for £16.99 a month from Plusnet

Tuesday 05 August 2008 09:59:09 by Andrew Ferguson

Broadband appears to be one of those few products where year on year cost savings have become normal. Plusnet is pruning the price of its basic offering with the launch of Plusnet Essentials which is a £16.99 package that offers an up to 8Mbps ADSL service, 1GB of inclusive usage allowance (top-ups at £1.25 per GB, and unmetered usage between midnight and 8am), telephone line rental and inclusive weekend calls to UK landlines and other Plusnet customers.

The pricing is not an introductory offer but rather the ongoing price, so there will be no surprise rise in price a few months down the road. The product also eschews the trend for ever longer contracts, with a 12 month minimum contract length.

A 1GB usage allowance is fairly small, but with each extra 1GB costing £1.25, for people doing the basic things of paying bills and doing their banking online and general bargain hunting this will be more than enough.

What is possible with a 1GB usage allowance.

• Surfing and instant messaging (e.g. MSN), 4 hours a day
• Email with attachments, 15 a week
• Email, 100 a week
• Downloading songs and short video, 10 a week
• Listen to online radio, 2 hours a week

When one considers that if you opt for a £10 a month mobile data dongle, if you exceed the usage allowance extra usage may be automatically charged at anything from £15 per GB to £100 per GB, one can see how landline broadband still has a clear advantage, even though you have to pay for the phone line rental.

The call tariffs are detailed on the Plusnet website, the key points being a 6p per call set up fee, calls to mobiles at 11.5p per minute during the day and 6.5p in the evenings. Chargeable calls to 01, 02 and 03 numbers cost 4p per minute.

The £6.99 broadband element from Plusnet Essentials is not available on its own, the cheapest broadband only package without an inclusive line rental deal is Option 1 for £9.99 per month which includes 2GB of usage allowance.

What would you give up for your broadband connection?

Monday 04 August 2008 16:34:13 by John Hunt

Thirty percent of broadband users in Britain would rather give up their magazine subscriptions, cigarettes and alcohol than their broadband connection, a recent survey by Plusnet reveals. 92% of those questioned said they wanted to keep their broadband connection despite the current economic slowdown, with more than half (58%) keen to stick with their current supplier or tariff. 34% were ready to switch if the current economic situation didn't improve.

Indications showed, that users were using the Internet to search out better deals and bargains using price comparison websites, paying bills online to get discounts and reading the news online in place of buying a newspaper.

"The survey shows there is a high level of volatility in the broadband market as users shop around for the best deals.

However, broadband is now so popular and central to the daily life of Britain that few consumers are ready to end their internet connection completely to make ends meet. Some are ready to switch suppliers to help with their household budgets but they still want to keep broadband.

In fact, millions of people are using the power of the web to shop smartly and hunt down better-value goods and services."

Neil Armstrong (Products Director), Plusnet

Plusnet figures show that web browsing is the most popular online activity (63.3%) with the busiest surfers located in the Solent area. File sharing is next popular (16.8%), with the highest percentage of file sharers living in the West of Scotland. Gaming, popular in the North of Scotland, accounts for 4.73% of online activity and streaming, most popular in South West London is 4.26%. The City of London sends the most e-mail and accounts for 2% of online activity.

Carphone Warehouse taking cautious outlook

Thursday 31 July 2008 15:23:53 by John Hunt

The first quarter results for Carphone Warehouse have also been released today, and they are announcing a cautious outlook, with expectations lower than originally anticipated. This quarter saw the TalkTalk brand gain a net 86,000 customers, but this fell to 41,000 when combined with AOL, leading to an expected growth of only 200,000 to 250,000 this year, down from original forecasts of 400,000. The AOL brand saw a drop of 45,000 customers, blamed on lack of customer recruitment whilst the migration from the AOL to TalkTalk platform takes place, and also due to 12,000 customers who were unable to migrate. Overall broadband customers are now at 2.8 million.

Carphone Warehouse have reported that customer churn is falling, and growth in broadband penetration is slowing, so they plan to increase focus on growing the average revenue per user (ARPU), which currently stands at £22.10 for broadband customers, up from £21.20 in 2007, by provision of value-added services. There has been a big change on the network side of things since 2007 when 966,000 of 2.4 million customers were unbundled. In 2008 this has grown to 1.9 million of the 2.7 million customers, a change from 40% to 70% of total customers being unbundled. The full details can be found on the Carphone Warehouse Group website.

BT hold 35% of UK broadband market

Thursday 31 July 2008 14:16:38 by John Hunt

BT's first quarter results for 2008/9 have been released today and show continued growth within the broadband and other markets. BT Retail added 103,000 broadband customers in the last quarter bringing their total end users up to 4.5 million at the end of June 2008, accounting for 35% of the market. The 103,000 account for 31% of the 338,000 net additions during the quarter. Combining the other sections of the company, BT have 13 million lines under their wing including LLU and wholesale connections.

BT Vision, the Freeview/Video On Demand package from BT has again increased numbers, with users reaching 282,000. BT Fon, the Wi-Fi option that lets you connect via other Fon users worldwide, has also had growth with now over 121,000 members. BT Openzone has around 3,000 hotspots and sees an average usage of 1.1 million minutes per week day.

Other news from BT this quarter saw the launch of WBC which gives users access to faster broadband using their new 21CN network. Currently, coverage is available to just over 5% of the UK market, expected to rise to 40% by April 2009. Earlier this month, BT also announced plans to invest £1.5bn in a fibre to the cabinet/home rollout, and to help fund this has suspended its share buyback programme. £1 billion of this investment is in addition to previous investment plans, with £100 million expected to be invested in each of 2008/9 and 2009/10 with the remaining £800 million over the following three years. They expect to cover 10 million homes by 2012.

Investment by BT in fibre access essential

Wednesday 30 July 2008 12:24:31 by Andrew Ferguson

Point Topic is perhaps better known for its statistics on the worldwide roll-out of the various DSL technologies. They have issued a press release relating to the recent £1.5 billion fibre project BT has offered to roll-out for 2012.

"I believe investment in NGA is essential for BT, and it should generate a good return for decades to come. On the other hand, if BT doesn’t renew its local loop infrastructure its existing copper network will be worth only scrap value within 10 years,...

Fibre in the local loop combined with BT’s 21CN [twenty-first century network] project allows BT to provide a complete IP [internet protocol]-based telecoms environment to the end user. Customers should get more flexibility for less cost and dreams like seamless fixed-mobile convergence will become reality."

Tim Johnson, Chief Analyst at Point Topic

To suggest that the current local loop has just ten years of life left seems radical, but consider how much things have changed in the last 10 years and it looks like a very sane statement to make. If BT delays then we may see cities going their own way on fibre roll-outs, with firms like H2O providing much of the infrastructure.

The problem with most other roll-outs and the cable networks via Virgin Media are a prime example, is that they stick to purely commercial priorities. Love or hate BT, it has at least bid for and participated in a number of projects that addressed issues like the digital divide. We are starting to see a resurgence of community led broadband projects with talk of people rolling out their own fibre, and it could be said that wireless programmes back in 2002 to 2004 formed part of the pressure on BT to enlarge its original ADSL footprint.

One reason the £1.5 billion project that BT has dropped onto the table, is as cheap as £150 per home (Point Topic calculated the £150 figure, down from £800 of previous estimates), is that FTTH (Fibre to the Home) is envisaged for areas like Ebbsfleet, the Olympic Village and other new build sites. Existing premises would be served by running fibre to the nearest street cabinet which significantly reduces the amount of copper cable making speeds of 50Mbps or more easily possible. With some 85,000 street cabinets around the UK, the work to get fibre to these will be less than full fibre to the home. The danger of a cabinet based approach is that this may only have a limited life span of ten to fifteen years.

At the end of the day BT is stuck with largely having to satisfy investors that the return on any investment will be reasonable and not too long in happening. In the past countries have spent money on large public projects during times of recession with the longer term in view. Perhaps a UK fibre roll-out should be approached from the public benefit viewpoint rather than whether it will return investors a handsome dividend alone.

BERR consults on file sharing

Monday 28 July 2008 19:31:20 by Andrew Ferguson

People often complain about never having a chance to make their voice heard, and that the massive corporations will be the only ones with a say. Following on from last weeks news of a Memorandum of Understanding that will see broadband providers sending out letters to people who are thought to be sharing material in violation of copyright rules, there is now a chance for broadband providers, rights holders and the public to have some input into the next step of the process.

The Department for Business Enterprise & Regulatory Reform has started a three month consultation period that will finish on 30th October 2008. The consultation period is designed to gather views on what sort of approach can be taken to address the issue of people exchanging copyrighted material without the permission of the rights holder. While the core area mentioned at present is music, areas like films, software and e-books all fall within the scope of any potential legislation.

Already there have been concerns raised on the reliability of the data used by the BPI to identify those uploading copyrighted material without permission and whether targeting peer-to-peer (p2p) systems will see legitimate users getting hold of game patches suffering as providers throttle p2p traffic. The BPI in 2004 and 2005 apparently settled a number of copyright cases out of court, but some did go to court with the courts finding in favour of the BPI, so it would seem they have tested their monitoring systems to a reasonable degree.

The scale of the problem is hard to judge as surveys have produced very varied results, one survey for the BPI suggests 25% of UK internet users have engaged in online music "piracy". A 2007 survey gave a figure of 43% and another suggested 14% has unlawfully copied music. A survey for British Music Rights suggests that among young people 63% have used unlicensed p2p networks, with an average of 53 music tracks downloaded per month (some admitted to downloading up to 5,000 tracks a month).

If this figure of 53 tracks a month is accurate, it looks unlikely that young people will spend £41.87 (53 x £0.79; a typical price of one track) a month on music even if it became impossible to obtain music online from any source other than official outlets. Who knows what the future of the music industry will be--Music festivals and merchandise are certainly big income generators for artists, and just as small independent labels in the past have rocked the music industries ocean liner, we may see a new label with a new model for the online generation emerge from the sidelines.

H2O fibre network getting closer in Bournemouth

Friday 25 July 2008 11:56:23 by Andrew Ferguson

Fibre connectivity has been in the news a lot lately and if H2O Networks have their way, we will be seeing consumers with Fibre To The Home (FTTH) a lot sooner than BT's 2012 date. The firm has started to contacting potential customers in the Bournemouth area as part of its build up to rolling out the service in the area.

Ofcom has started a consultation in relation to a proposal to give H2O Networks powers to carry out street works in relation to its fibre roll-out. These powers will make the work required for the roll-out easier for H2O networks by allowing them to co-ordinate work. One key point of the H2O fibre roll-out is that it is willing to share spare fibre capacity with other networks.

With Dundee planned as the second fibre city it will be interesting to see the reaction of other towns and cities across the UK. Hopefully local authorities will see the potential advantages of high speed links between their own premises and the advantages to local small businesses and residents that a fibre roll-out can have.

Be Broadband asserts its position over illegal file sharing

Thursday 24 July 2008 15:12:59 by Andrew Ferguson

A key part of the news of a memorandum of understanding between the BPI and the six largest UK broadband providers is that it covers such a large swathe of the UK broadband public. One of the smaller providers not signed up is Be Broadband who have been supplying ADSL2+ services since 2005.

"Be welcomes today’s announcement form the BPI that ISPs should engage in communicating the issue of illegal file-sharing to their customers. As Be grows its member base we are getting an increasing number of requests from 3rd parties for information about members who they believe have infringed their copyright or other intellectual property rights. Be has a policy of making it clear to our members of how Be* deals with these requests.

Where a content owner (like a record label or a games company) approaches Be and requests the details of a member because of an alleged copyright infringement we will not supply this information direct to the requester unless they have a Court Order. To keep members informed of what’s going on in most circumstances we will try to contact the member in question to make them aware that we have had a request from the rights holder.

Under circumstances when a Court Order is served on Be, which requires us to supply information about member activity, we will comply with the Order and pass the relevant contact information to the rights holder (and in accordance with our Privacy and cookie policy). In this case under most circumstance we will not inform the member that this has occurred as this may compromise the investigation related to the Court Order."

Oli White, Head of Marketing at Be Broadband

So while Be Broadband is not signed up to the memorandum, its customers will be notified of a third party requesting their information even if a court order is not in effect. The important point to note is that customer information will only be passed back to a third party when a Court Order is served on Be. Similar tactics of course may emerge from other providers who have not signed up to the memorandum.

Mine is bigger than yours - the battle commences

Thursday 24 July 2008 13:31:07 by Andrew Ferguson

Virgin Media is racking up the PR battle in response to the FTTC/FTTH news from the BT Group. The Chief Technology Office Howard Watson has been talking to Reuters and revealed plans to be offering 200Mbps connections by 2012.

200Mbps cable broadband is possible since the DOCSIS 3.0 specification, which is behind the forthcoming 50Mbps roll-out, is capable of speeds of 200Mbps when using 4 channels and up to 400Mbps if 8 channels are used.

If Virgin Media can produce an affordable 200Mbps product in under four years, that would ensure the UK does not fall further behind in the global broadband race. A concern of this announcement and other faster headline speed products is whether the back haul networks will be grown in size too. Without massive investment in the back haul networks, situations where the actual usage experience is not much better than now may prevail. Certainly the consumer experience in some countries with 100Mbps and 1Gbps products available now, is such that people do not see the maximum speed that often.

The interview trots out the usual reasons for consumers wanting high speed broadband which are high definition video, interactive gaming and teleconferencing in multiple rooms. Whether the public really wants these things is another matter, and even if we all do, what price are we willing to pay? To benefit from broadband even at speeds in excess of 20Mbps a great many people will need to upgrade their wireless networks, as 802.11g runs out of steam in the real world at around 15 to 20Mbps. For broadband connections running at 100Mbps and faster even the average Ethernet network will need new wiring and hardware, and lets not forget that for a computer to render a good quality HD video it needs to be pretty fast.

TalkTalk talks about the Memorandum of Understanding

Thursday 24 July 2008 13:00:24 by Andrew Ferguson

Carphone Warehouse has signed the recently announced Memorandum of Understanding with the The Department for Business, Enterprise & Regulatory Reform. Interestingly though TalkTalk has issued a press statement that it will strive to protect customers' rights to freedom of use of the Internet.

"It is not our job to tell customers what they should or shouldn’t be doing but we believe it is in their interests to warn them that they are being accused of wrongdoing. We will not divulge a customer’s details or disconnect them on the say so of the content industry, but we will work with rights holders to develop a sensible and legal approach founded on protecting consumer rights and privacy."

Charles Dunstone, CEO, The Carphone Warehouse Group

Protecting the rights of customers is important, but if it can be proven that a customer is carrying out illegal activity using a broadband connection any provider that defends a customer in that situation would probably find themselves in court too. Talk Talk seems to be asserting simply that it will respect customers privacy and not reveal identities to external parties without the normal legal processes. The new memorandum with the BPI means that the BPI does not find out exactly who has received the warning letter, as the ISP does not pass on any details, but simply cross references the data supplied against its own customer database.