UK Lags Behind In Broadband Uptake, Finds FCC

The study was carried out by the US Federal Communications Commission (FCC) in order to review the broadband policy experiences of selected countries from the Organisation for Economic Cooperation and Development (OECD). It covered South Korea, Canada, Belgium, Denmark, Sweden, the United States, Switzerland, Japan, Germany and the UK.

The report shows that in terms of the number of broadband subscribers per 100 people, the UK is the least developed of the countries, whilst Korea and Canada lead the way, as shown the graph below.

Broadband Access Subscriber Trends, Per 100 People
	2000	2001	2002
South Korea	9.2	17.2	21.4
Canada	4.5	8.9	11.7
Belgium	1.4	4.4	8.5
Denmark	1.3	4.5	8.3
Sweden	1.9	5.3	8.1
US	2.3	4.7	6.9
Switzerland	0.4	2.2	6.3
Japan	0.5	2.2	6.1
Germany	0.3	2.4	4.0
UK	0.0	0.6	2.3
Source: FCC/OECD reports

By the end of 2002, there were 55 million broadband subscribers in all OECD countries. Within this, the US comprised the lion’s share, with 19.8 million, or 36% of the total, despite accounting for just 25% of the OECD population.

The dominant broadband platform – either cable or DSL – varies from country to country. The number of DSL subscribers exceeds the number of cable modem subscribers in South Korea, Belgium, Denmark, Sweden, Japan, and Germany. In the US, Canada, Switzerland and the UK, however, cable modem use is higher.

Cable modems accounted for 41% and DSL for 54% of the broadband access market in OECD countries by the end of 2002. However, the growth rate for DSL in 2002 was 83%, compared to just 53% for cable modems.

Broadband Subscribers In Selected OECD Countries, December 2002
	DSL	Cable	Other	Total	Subscribers Per 100
South Korea	6,386,646	3,701,708	39,959	10,128,313	21.4
Canada	1,642,554	2,008,566	–	3,651,120	11.7
Belgium	517,000	326,181	25,813	868,994	8.5
Denmark	307,055	133,003	5,784	445,842	8.3
Sweden	424,000	153,700	142,500	720,200	8.1
US	6,595,532	11,300,000	1,928,152	19,823,684	6.9
Switzerland	195,220	260,000	–	455,220	6.3
Japan	5,645,728	1,954,000	206,189	7,805,917	6.1
Germany	3,195,000	56,845	70,000	3,321,845	4.0
UK	590,000	779,319	2,000	1,371,319	2.3
All OECD countries	30,058,261	23,075,208	2,625,176	55,758,645	4.9
Source: FCC, October 2003

UK broadband development The FCC’s report notes that broadband access has developed slowly in the UK, despite the fact that cable operators and telecommunications carriers have had the longest experience with infrastructure competition of any OECD country. Cable operators focused more on offering telephony and digital television than cable modem services.

BT was even more tardy. Whilst cable operators NTL and Telewest began offering cable modem services in 1999 and 2000 respectively, BT did not introduce a DSL service until May 2001. As a result, the UK was among the last of the major developed countries to have DSL.

This pattern is typical of the overall trend in broadband development, where incumbent telecommunications companies like BT have lagged considerably behind cable operators in rolling out services.

This is true in markets such as Korea, Canada and Belgium, where cable networks are extensive and cable companies are historically separate from telecommunications companies. It is also the case in Japan, where only one-third of households are passed by cable and in Sweden, where only 40% of cable subscribers do not belong to the incumbent telco-owned cable operation.