Internet service providers (ISPs) will face new challenges in the coming years as consumer demand for broadband lines continues to slow, according to research undertaken by analyst company Point Topic.
Point Topic’s figures show user uptake of broadband lines decreasing over periods of six months. Whereas from December 2006 to June this year, the total number of broadband lines increased by 1.39m, broadband lines had increased by 1.50m from June 2006 to December 2006, and by 1.64m in the six month period prior to this.
This decrease in broadband uptake is not just a blip but indicates the future trend, said the Point Topic report.
Although it is estimated that there will be 21m broadband lines in the UK by 2013, there will have already been 15.61m lines installed this Christmas, according to Point Topic’s estimates. This means that whereas the analysts' research shows more than seven million broadband lines have been installed in the last two years, there will be less than six million lines installed in the next five years.
A reason for this slowdown in take-up is that most of the dial-up users ready to be converted to broadband have been already, said the report. The other dial-up users are tending to avoid switching to broadband after hearing reports of poor service such as difficulties in getting a connection up and running, and ISP’s not delivering the speeds they promise, the report added.
Oliver Johnson, chief executive of Point Topic, said those who do not even have a dial-up connection are even harder to persuade. “If they don’t want the internet now, they will never have it,” Johnson explained.
The analyst also predicts market penetration to increase slightly with people carrying their internet usage habits with them into older age groups. This will cause the number of non-user households to decrease by one percent each year, the report said.
Currently, broadband uptake in this market sector can be increased by ISPs concentrating more on marketing this sector, and the government’s efforts to tackle digital operators, the report said.
The report also notes a slight improvement in uptake made in the third quarter of 2007, during which 600,000 broadband lines were added. This was a better result than the figure predicted, and the increase was due to particularly good performance by Sky, BT Retail and Orange, the report added.
