Lyndsey Burton, Founder of price comparison site Choose.co.uk
UK broadband is becoming more competitive.
Compared to any previous point in recent history, it provides customers with more choice, greater value, and better services.
This, however, would appear to be something of a controversial opinion.
At least if the stringent criticism levelled at BT and Openreach by many of their rivals is a reliable guide.
For example, last year three of the UK’s biggest ISPs – Sky, Vodafone and TalkTalk – teamed up to launch Fix Britain’s Internet, a campaign aimed squarely at highlighting the supposedly lacklustre nature of the UK’s broadband.
Primarily, its goal was to create enough public pressure to convince Ofcom to completely (rather than legally) separate Openreach from BT.
Yet to do this it had to suggest that the UK was saddled with “failing broadband,” and that customers were “receiving poor speeds and even poorer service.”
Of course, such claims aren’t really true.
At best, they were an exaggeration, since in actual fact the UK’s broadband market had been and is still becoming increasingly open, despite claims that the supposed dominance of BT and Openreach is stifling competition.
This was made plain only a few days ago, when Ofcom published its latest Whole Broadband Access Market Review.
It revealed that BT’s significant market power (SMP) covers only two percent of the UK’s premises, and that 97.3 percent of the UK enjoys “effective competition.”
On its own, these percentages may not seem too significant, yet to put them in perspective it’s worth looking at past shares.
In 2010, for instance, BT had SMP in 21.7 percent of the market.
Even worse, it commanded the market for 45 percent of UK premises in 2007.
That such percentages have been whittled down to just two percent represents remarkable progress for the UK broadband industry, and testifies to just how open it has become.
A large part of this can be put down to Ofcom and their various interventions over the years.
In 2008, they forced Openreach to pay compensation proactively for late repairs and bad service, an action they’ve continued to build upon since, with this year seeing them propose that all ISPs pay automatic compensation for unacceptable service.
Similarly, in 2013 they acted to make switching between providers easier, thereby increasing competition as ISPs began working harder to retain customers.
And in much the same vein, they ruled in 2015 that customers can legally exit contracts prematurely in the event that the download speeds provided by their ISPs “fall below acceptable levels”.
As a result of such actions, the UK’s broadband market has undoubtedly become more competitive, with the fruits of this rise plainly visible in the increased value for money that customers receive.
As Ofcom noted in their 2017 Pricing Report, prices have remained remarkably generous.
More specifically, they found that despite a 67 percent "increase in data usage [in 2015], the average revenue per residential fixed broadband connection increased by just eight percent, to £19 per month in 2015, and was 36 percent lower than in 2005.”
Put more simply, customers are receiving much more from their broadband services for considerably less, and this is largely because BT doesn’t quite have the stranglehold on the market that its critics would suggest.
Its semi-monopoly is being gradually eaten away in the face of regulation and natural competition, and further evidence of this is also evident in how average broadband speeds have been consistently increasing.
In 2014, the average UK speed stood at 17.8MBps, which was already five times faster than it was five years previously.
Now, however, it stands 36.2MBps, which is just more than double what it was in 2014 and 25 percent faster than it was in 2016.
Given such progress, its clear that BT and Openreach’s recent detractors have been largely unfair.
Yes, the UK’s broadband may not be full-fibre and as fast as it possibly could be (assuming money were no object), yet this hasn’t stopped it from witnessing an increasing amount of competition, as well as an increasing amount of benefit for the customer.