BT announced yesterday that the UK could have 100% broadband coverage by 2005, “if industry and government pull together”.
At the same time, they announced the introduction of Trigger Levels for all telephone exchanges in the UK, bar six hundred of them. Trigger Levels are set by BT and are the number of people that they feel make it economic for them to equip the exchange for ADSL, will vary between 100 and 500 customers. They excluded six hundred exchanges that have fewer than three hundred customers each, including ten of them having fewer then ten customers. BT hopes that regional development agencies and local groups will help fund broadband in the excluded areas.
Earlier this month BT presented evidence to a House of Commons Select Committee, where they stated that broadband access in the UK is split 50/50 between ADSL and cable access. BT sell ADSL in two ways in the UK; retailing direct to customers and wholesale via 150 service providers, again split about 50/50. 25% of the retail market is well below BT original stated ambitions, but they presented this as positive items to the committee, in their own words “the highly competitive nature of the UK market is demonstrated by the fact that BT has the lowest share of the retail broadband market of any ex-incumbent.” The reality is, the total number of ADSL connections that they supply via retail and wholesale, equated to nearly all of the ADSL market and half of the UK broadband market.
In an effort to increase their share of the retail market, which has a higher margin that whole, they have announced that Gavin Patterson, previously Managing Director of Telewest’s consumer division, will be joining BT. He will not only look after retail ADSL, but is charged with “defending the company’s fixed-line business in an increasingly competitive marketplace”, quite a challenge when knowledge of Voice over IP (VoIP) and the cost savings it brings is just start to reach the consumer.
There are many advantages for BT if the number of broadband connections hits a critical mass. Clearly they would gain significant income from the wholesale and retail sides, but not least, that they would be able to offer content and services over these connections, including their long rumoured TV service.