Feature: Building Broadband Britain

With the well documented financial troubles of the companies peddling broadband, it would be easy to assume that this was a new technology having trouble taking off. Telewest Broadband shed 1,500 jobs last week, NTL is filing for bankruptcy protection and Glasgow-based Omne Communications had to call in the administrators on Friday, blaming sector uncertainty. All three are or were forces in the “broadband revolution”, but despite the problems in finding a workable business model to distribute services, research suggests that the cause of converting Britain to broadband is not lost.

One of the causes of NTL and Telewest’s problems is thought to be that the heavy cost of establishing a broadband cable infrastructure has yet to be offset by revenue from the services. However, recent figures from regulator Oftel suggest that the consumer demand is there- data collected from UK network operators showed that broadband internet access is growing at a rate of 20,000 new connections a week and the recently achieved milestone of 500,000 connections shows growth since the start of the year of 54%. According to Oftel, the demand for high-speed internet access is greater than that for mobile phones and dial-up internet services when they were first introduced.

NetValue’s monthly enumeration survey also backs the idea that, as the Government’s E-commerce Minister, Douglas Alexander recently said: “the work of building broadband Britain is underway”. It has found that 6.5% of all households accessing the internet in March 2002 were doing so via broadband services, compared to 3.1% in December 2001. Having said that, a comparison with other European countries (see below) shows that there is still much to be achieved.

In the UK the two main ways for consumers to receive broadband services are cable, such as that offered by NTL and Telewest Broadband and ADSL, offered by BT. Those offering cable services, which uses a fibre-optic network, rather than the existing copper wire telephone network utilised by ADSL, argue that their services are faster. In addition ADSL only operates within approximately 5.5km of the local exchange.

Higher internet connection speeds and lowering prices currently form the basis of the vigorous promotion of services on all sides. NTL unveiled what it claims is the UK’s fastest ever broadband internet service during March, while last month BT announced plans for a lower cost, “no frills” broadband option. Telewest, meanwhile, has homed in on those unfortunate enough to subscribe to ITV Digital, offering them a discounted offer if they take up its broadband internet, cable TV and telephony package. Its not all good clean fun though, as Freeserve has called on Oftel to investigate BT, which it says is pursuing an “orchestrated campaign of anti-competitive behaviour”.

The increasing penetration of broadband is likely to be advantageous to advertisers, in particular if they use, or plan to use, online advertising. Faster connection times will mean that the use of complex graphics is more practical, as consumers are less likely to be irritated by long download times. This could give greater scope for creative and engaging treatments.

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