Thursday, August 19, 2010

UK Broadband facts & figures: Ofcom's 2010 Communications Market Report

Some jaw-dropping figures from Ofcom's 2010 Communications Market Report published today (coverage from the BBC here):
  • UK data volumes grew by a compound annual growth rate (CAGR) of around 70% annually between 2005 and 2009, while revenues from internet access grew by less than 1% annually over same period;
  • total data volumes over the UK’s internet infrastructure increased by 68% during 2009, while data volumes over mobile networks increased by 240%;
  • Internet take-up has now reached 73%;
  • Facebook accounts for 45% of total time spent using the mobile internet.
Further analysis of UK traffic volumes from page 284:
"Cisco estimates that the total volume of internet traffic in the UK was around 600 petabytes a month by the end of 2009 (a petabyte is approximately one million gigabytes)...the majority of traffic (79%) was generated by fixed-broadband internet access while managed IP networks, such as VoIP and IPTV, accounted for 20%, and traffic carried over mobile networks represented about 1% of total monthly internet traffic. Consumer IP traffic represented 78% of the UK’s traffic, with business use accounting for the remainder. Only around 15% of this internet traffic was web data. File sharing (i.e. peer-to-peer sharing where internet users connect with each other and directly share files stored on their hard drives) accounted for around 30% of traffic and video (including cable and IPTV video on demand, but not including video exchanged through P2P file sharing) accounting for another 30%. In Section 4.3.2 of this report we detail the increasing use of video services on the internet, with 31% of adults in the UK watching catch-up TV on the internet in Q1 2010, while in April 2010 17.4 million people in the UK watched videos on YouTube."
And this extract from page 289 illustrates that while superfast broadband is increasingly available, takeup to date has been slow:
"There was little availability of super-fast services other than Virgin Media’s ‘up to 50Mbit/s’ at the end of 2009. However, in 2010 BT’s roll-out of its ‘up to 40Mbit/s’ Infinity service has accelerated; BT has announced that its fibre roll-out had reached over 1.5 million households by July 2010 and was passing 100,000 additional premises each week. BT’s super-fast services are set to be available to 40% of the UK population by the end of 2012 and to 66% of the UK population by 2015, although, despite growth in the availability of its super-fast services in 2010, Point Topic estimates that there were around 12,000 live BT fibre connections at the end of June 2010."
Price is suggested as the main factor influencing takeup - almost half of UK homes are now able to get super-fast broadband via cable, with Virgin's up to 50Mbps service costing almost twice as much as its up to 10Mbps offering, though the difference is less between BT's up to 20Mbps DSL service and its up to 40Mbps FTTC product. But Ofcom suggest another reason too:
"A second reason may be the perception that current speeds are sufficient for most internet applications; for example, the BBC recommends a minimum speed of just 500kbit/s to use its iPlayer and 3.2Mbit/s for the high-definition service. However, it may still be video streaming that provides the tipping point from current generation to super-fast broadband services. In 2010 the first generation of internet-ready televisions have been launched. Since the launch of flat-panel models the rate of television set sales has grown significantly, as prices have fallen and larger screen sizes have become available (according to GfK, annual UK TV set sales grew by 68% in the five years to 2009). Within a few years, as main sets are replaced and are moved around the home, we may find there is the need for several HD web content feeds per household, and therefore a requirement for the higher bandwidths that only super-fast broadband connections can provide."
Agreed. Concurrency will be the key driver I think, with TV being a major but not the only driver. The FCC's  recently published 2010 Broadband Performance Report illustrates this very nicely, particularly the importance of symmetric connections as well as how demand is likely to change over time:
“Taking different user needs as well as speed and performance demands together, there emerge distinct profiles of what different consumers demand from their network connection. Each use profile has a “basket of applications” that reflect typical uses of the Internet for that set of users. These follow the four primary user types...: basic utility, emerging multimedia, full media, and advanced. The basic utility user would require actual download speeds of approximately 500 kbps, while emerging multimedia and full media users would require actual download speeds of 1–4 Mbps, depending on the quality demands of particular applications they might use...80% of broadband users fall into these first three use cases. Advanced users accessing applications such as enhanced two-way videoconferencing and HD video streaming could require actual symmetric (i.e., upload and download) speeds of 5 Mbps or more and significant QOS (e.g., low latency) from the network...Users’ speed and performance demands may change over time as applications become more data-intensive and the “common basket” of applications in each use profile evolves...Analysts project sizeable additional growth of online video watching by consumers, which may considerably increase demands on broadband networks.”
Constant change is the only certainty it seems, making the need for a broadband infrastructure capable of scaling appropriately to keep pace with ever-rising demand increasingly apparent.

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