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Giants carve up broadband punters

The UK's ISP oligopoly

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Rapid consolidation in the UK broadband market means it's now dominated by just six operators, who divvy up 94 per cent of home internet users between them.

Analyst house Point Topic's superleague comprises BT, Virgin Media, Carphone Warehouse, Tiscali, Orange, and Sky.

Ofcom's attempt to increase competition with the creation of BT Openreach for unbundled ISPs has been a double-edged sword. Prices have dropped, but so have margins. It's meant achieving big customer numbers through acquisition has been the only strategy to build a viable retail operation. Ultimately consumer choice has suffered.

The last two years has seen the end of Pipex, AOL, Easynet, and Plusnet as independent operators. The launch of O2's broadband offering last week should bring one more big name to the carve-up, however.

Point Topic reckons the growth period for broadband is probably over, and firms are now competing for the same pool of customers. Chief analyst Tim Johnson said: "With lower than expected customer numbers just released by Carphone Warehouse for Q3 it will be interesting to see what the other ISPs report for this quarter."

Carphone Warehouse released its numbers on Wednesday. It's expected to suffer again next time because the first wave of sign-ups to its "free" offer began to come out of their 18-month lock-in period this week. ®

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