Feeds

BT and Virgin Media to report broadband slowdown

Investment or cuts? Whaddya reckon?

Top three mobile application threats

Analysis Newspaper and City knives are being sharpened for the UK's two biggest internet providers this week. Our major infrastructure owners, BT and Virgin Media, are set to release disappointing results at a watershed moment for broadband.

Virgin will be put in the stocks first, on Wednesday. It's expected to reveal more customer losses after net 70,000 headed for the exit across its quad-play business last results round. Analysts are predicting a Q3 exodus of more than 30,000.

However, the firm has been laying the groundwork so that it can claim a turnaround. New boss Neil Berkett has been trailing the obvious idea that Virgin should put broadband at the front and centre of its product range, having lost the battle over premium TV with Sky.

In Q2, broadband was Virgin's bright spot, bagging about 46,000 new punters. Market watchers Point Topic predict this time will see more new additions. Thanks to Berkett's recent repositioning of the firm as primarily a premium ISP... hey presto! It's a turnaround.

Virgin's new broadband cohort will be the smallest since early 2003, however - when broadband take-up was accelerating rapidly.

Unlike Virgin, BT's other businesses have been consistently successful for a while. What'll put the kibosh on its run of form is a radical shake-up across the business that is expected to cost thousands of workers' jobs. The restructure, aimed at making BT better able to exploit its technology in its global and enterprise markets, was announced in April, but will now begin to bite.

BT is also expected to report a similar slowdown to Virgin's in broadband. The days when ISPs could rely on converts from dial-up to keep their customer counter ticking up are over.

Point Topic chief analyst Tim Johnson said: "The reason for the sudden drop is largely the shrinking size of the remaining pool of dial-up users. Not only are there fewer of them but the ones that are left are also more resistant to change.

"On top of that, the industry has been failing to bring enough new homes on line."

It means that the rabid competition in broadband - which has seen smaller players lacking the investment muscle knocked out and bought up - is set to become even more fierce.

Hard times in ISP land mean the Government and Ofcom's upcoming discussions with industry over who'll pay for better internet infrastructure in the UK will take on a spicier flavour.

Almost 40 per cent of British households lack internet access. As more and more of the economy and society is run online, pressure on politicos to force investment will only grow.

Point Topic commented: "While growth is slowing throughout Western Europe it is likely that France will once again overtake the UK as the fifth largest broadband country in the world."

Mon dieu! Interesting times ahead. ®

Combat fraud and increase customer satisfaction

More from The Register

next story
Virgin Media so, so SORRY for turning spam fire-hose on its punters
Hundreds of emails flood inboxes thanks to gaffe
AT&T dangles gigabit broadband plans over 100 US cities
So soon after a mulled Google Fiber expansion, fancy that
AT&T threatens to pull out of FCC wireless auctions over purchase limits
Company wants ability to buy more spectrum space in auction
EE & Vodafone will let you BONK on the TUBE – with Boris' blessing
Transport for London: You can pay, but don't touch
NBN Co plans fibre-to-the-basement blitz to beat cherry-pickers
Heading off at the pass operation given same priority as blackspot fixing
NBN Co in 'broadband kit we tested worked' STUNNER
Announcement of VDSL trial is not proof of concept for fibre-to-the-node
Google eyes business service in latest Fiber trials
Lucky Kansas City buggers to host yet another pilot program
Huawei exec: 'Word of mouth' will beat Apple and Samsung in Europe
World Mobile Telephone Factory No.3 won't fling the big bucks around just yet
Brazilian president signs internet civil rights law
Marco Civil bill enshines 'net neutrality', 'privacy' as law
prev story

Whitepapers

Securing web applications made simple and scalable
In this whitepaper learn how automated security testing can provide a simple and scalable way to protect your web applications.
3 Big data security analytics techniques
Applying these Big Data security analytics techniques can help you make your business safer by detecting attacks early, before significant damage is done.
The benefits of software based PBX
Why you should break free from your proprietary PBX and how to leverage your existing server hardware.
Mainstay ROI - Does application security pay?
In this whitepaper learn how you and your enterprise might benefit from better software security.
Combat fraud and increase customer satisfaction
Based on their experience using HP ArcSight Enterprise Security Manager for IT security operations, Finansbank moved to HP ArcSight ESM for fraud management.