Connected Research

Union policy research in the 21st century

UK broadband in international comparison

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Ofcom yesterday published a series of charts looking at international comparative data on communications (press release here; charts here). Somewhat oddly, there’s no commentary – just a series of charts – but this is because Ofcom publishes a full report every two years (with 2009 being the ‘off’ year). Nevertheless, it wants to ensure that stakeholders have access to the most recent data – and a very laudable aim that is, too. At the same time, it gives free rein to commentators to produce their own conclusions, albeit that the mass of data (on top of the different domestic situations applying in each country) does not really lend itself to daily blogging.

Rory Cellan-Jones’s BBC blog nevertheless makes a useful stab at doing just this, drawing attention to whether the UK can claim to be a digital champion based on the generally lower level of higher speed (above 8 Mbps) connections and the clearly slower roll out of fibre (which Cellan-Jones obtained separately from Ofcom).

It’s clear that the move to higher speed/fibre connections has indeed been slower in the UK than elsewhere – a situation which interestingly seems to have arisen in spite of the highly competitive nature of the UK market and, therefore, in the face of the usual claims to the benefits of competition. Some reasons why this is so might be:

– a generally slow approach to public consultation and establishing regulatory certainty – although I’m not aware that this has been particularly slower than elsewhere (at least, within Europe)

– BT’s own financial difficulties, providing a tough context for fibre roll-out given the other competing demands for network expenditure

– the more confused nature of the debate, with the UK having a lower level of DSL connections than major western European countries, a result of the higher level of cable broadband connections (where the UK shares more in common with north America) with the different technologies perhaps adding a level of investment uncertainty.

The generally cheap price of broadband is one criticism that this blog has made of the effects of competition in the UK in the past – although it is interesting to note that broadband revenues per head in the UK are on a par with other countries, while the compound annual growth rate between 2003 and 2008 has actually been highest in the UK of all the other 11 countries with which comparisons are made other than Poland (chart 4.42).

Chart 4.49 contains one particularly useful possible further explanation, however:

This chart states that the dominance of the market by the largest three providers is much lower in the UK than in most other countries included in the comparison (including in Germany, where there has been a very sharp fall, in contrast to the signs of consolidation which are the case in the large majority of other countries, including the UK). From this, it might also therefore be true that the more dispersed nature of broadband revenues in the UK has delivered a more scarce basis for network investment funds amongst those in a position to invest.

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Written by Calvin

18/12/2009 at 3:21 pm

Posted in Communications policy

Tagged with ,

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