| MP72095 |
| MAPS : Internet Service Providers: March 2005 |
|
Our price £799 plus VAT |
CLICK
 TO BUY |
This report covers: Internet Service Providers
TABLE OF CONTENTS
| Executive Summary |
| 1. Introduction |
| BACKGROUND |
| RESEARCH |
| DEFINITION |
| The Office of Communications |
| 2. Strategic Overview |
| MARKET BACKGROUND |
| Internet Audience |
| Adoption of Internet Packages by Residential Users |
| Table 1: UK Adults with Internet Access at Home (%), August 2002-February 2004 |
| Adoption of Internet Packages by SMEs |
| Table 2: Internet Take-Up Among UK SMEs (%), August 2002-February 2004 |
| Adoption of Broadband |
| Narrowband |
| Cable Modem |
| DSL |
| Table 3: Rollout of DSL to Exchanges Across the UK (number and %), September 2000-March 2004 |
| Wi-Fi |
| Satellite |
| MARKET DYNAMICS |
| Summary |
| Faster Exchanges |
| Industry in Rebellion |
| Means of Access |
| Market Size |
| Table 4: Subscriptions for Dial-Up and Broadband Internet Connections (%), September 2003-September 2004 |
| DISTRIBUTION |
| Table 5: Ratio of Adults Who Use the Internet† by Region (%), April 2001-February 2004 |
| COMPETITIVE STRUCTURE |
| Table 6: Top Ten ISPs in the UK by Number of Subscribers, February 2005 |
| ADVERTISING |
| THE CONSUMER |
| Table 7: UK Households with Home Access to the Internet (%), 1998-2004 |
| MARKET FORECASTS |
| 3. Market Analysis |
| WHAT DOES AN ISP DO? |
| Technical Information |
| EVOLUTION OF THE UK MARKET |
| The Freeserve Boom |
| Flooded Market |
| Downward Spiral |
| OFTEL/OFCOM AND FRIACO |
| THE BROADBAND INDUSTRY GROUP BATTLES BT'S PRICES |
| ISPA — Proposal to BT |
| ISP PRICING |
| CHANGES IN REGULATORY REQUIREMENTS FOR ISPs |
| Licence from Regulator No Longer Required |
| Payment of Administrative Fees |
| Requirement to Negotiate Interconnection |
| Requirement to Comply with General Conditions Proposed by Oftel Relating to Consumer Protection Issues |
| Requirement to Offer Contracts |
| Requirement to Comply with Codes of Practice |
| Requirement to Offer Itemised Billing |
| Ability to Keep and Use Information About Subscribers |
| Ofcom Regulation of Content Available Over the Internet |
| ADVERTISING AND PROMOTION |
| Table 8: Main Media Advertising Expenditure by ISPs (£000), Years Ending June 2002-2004 |
| WHICH? ONLINE ANNUAL INTERNET SURVEY |
| Payment Methods |
| Table 9: Payment Methods for Internet Access (%), 2002 |
| Most Frequently Visited Sites |
| Table 10: Most Frequently Visited Websites (% of users), 2002 |
| Improvements to the Internet |
| Table 11: Improvements to the Internet (% of users), 2002 |
| Shopping Online |
| Table 12: Shopping Online (% of users), 2002 |
| General Attitudes |
| Table 13: The Internet Should Be Regulated (% of respondents), 2002 |
| 4. Key Industry Issues |
| BROADBAND |
| Different Types of Broadband |
| ADSL |
| Cable Modem |
| Powerline |
| Satellite |
| Wireless |
| The Broadband Market |
| Consumer Uptake of Broadband Internet in the UK |
| Table 14: Reasons for Changing to Broadband (%), 2003 |
| SPAM |
| MAINTAINING ISP CUSTOMER LOYALTY |
| INTERACTIVE TELEVISION AND OTHER ACCESS MEDIA |
| VIDEO |
| SECURITY |
| 5. An International Perspective |
| INTERNET USAGE |
| Table 15: Comparison of Residential Broadband Prices (£ per month), 2003 |
| France |
| DSL |
| Cable Modem |
| Germany |
| DSL |
| Cable Modem |
| Sweden |
| DSL |
| Cable Modem |
| Other |
| The UK |
| DSL |
| Cable Modem |
| The US |
| DSL |
| Cable Modem |
| BROADBAND MARKET |
| WIRELESS BROADBAND |
| Hotspots |
| 3G |
| 6. PEST Analysis |
| POLITICAL FACTORS |
| ECONOMIC FACTORS |
| SOCIAL FACTORS |
| TECHNOLOGICAL FACTORS |
| 7. Consumer Dynamics |
| OVERVIEW |
| Table 16: Summary of Results (% of respondents), 2004 |
| THOSE NOT USING THE INTERNET/LACK OF KNOWLEDGE ABOUT ISPS, AND THOSE HAPPY WITH THEIR ISP |
| "I Do Not Use The Internet, Or Am Not Sure What An ISP Is" |
| "I Already Have An ISP And Am Happy With The Service I Receive" |
| Table 17: Non-Users of the Internet/Lack of Knowledge About ISPs, and Happiness with the ISP Currently in Use (% of respondents), 2004 |
| ISPS SHOULD ALLOW SPEEDY INTERNET ACCESS AND BE USER FRIENDLY |
| "It Is Important To Me That An ISP Allows Speedy Internet Access" |
| "It Is Important To Me That An ISP Is User Friendly" |
| Table 18: Importance of ISPs Having Speedy Internet Access and Being User Friendly (% of respondents), 2004 |
| ISPS SHOULD ALLOW COMPLETELY FREE INTERNET ACCESS AND OFFER FULL TECHNICAL SUPPORT |
| "It Is Important To Me That An ISP Allows Completely Free Internet Access" |
| "It Is Important To Me That An ISP Offers Full Technical Support" |
| Table 19: Importance of ISPs Allowing Completely Free Internet Access, and Offering Full Technical Support (% of respondents), 2004 |
| IMPORTANCE OF ISPS OFFERING UNMETERED TELEPHONE CHARGES, AND THOSE NOT WILLING TO PAY TO SUBSCRIBE TO AN ISP |
| "It Is Important To Me That An ISP Allows Unmetered Phone Charges" |
| "I Would Not Pay To Subscribe To An ISP, As There Are So Many `Free' ISPs Available" |
| Table 20: Importance of ISPs Allowing Unmetered Telephone Charges and Refusal to Pay to Subscribe to an ISP (% of respondents), 2004 |
| PENETRATION OF BROADBAND AND ISPS LOADED FROM A FREE CD |
| "I Use Broadband for Internet Access Via My ISP" |
| "I Currently Have An ISP Which I Loaded From A Free CD" |
| Table 21: Penetration of Broadband and Using an ISP Loaded from a Free CD (% of respondents), 2004 |
| PREFERENCE FOR A UK-BASED ISP AND ALL `FREE' ISPS OFFER A SIMILAR SERVICE |
| "I Would Prefer A UK-Based ISP To A US-Based ISP" |
| "All `Free' ISPs Offer Very Similar Services" |
| Table 22: Preference for UK-Based ISPs, and Perception that `Free' ISPs Offer Very Similar Services (% of respondents), 2004 |
| ISPS OFFERING INTERNET ACCESS VIA A MOBILE DEVICE AND ISPS SHOULD ALLOW MORE THAN ONE E-MAIL ADDRESS |
| "It Would Be Useful To Me For An ISP To Offer Access Via A Mobile Device" |
| "It Is Important To Me That An ISP Allows More Than One E-Mail Address" |
| Table 23: Internet Access Via a Mobile Device and ISPs Should Allow More Than One E-Mail Address (% of respondents), 2004 |
| CHANGING ISP IN THE PAST 6 MONTHS OR STILL WITH THE SAME ISP |
| "I Have Changed My ISP Within The Last 6 Months" |
| "I Am Still With The Same ISP Which Was Included When I Bought My PC" |
| Table 24: Changing ISP/Remaining with the Same ISP (% of respondents), 2004 |
| 8. Supplier Profiles |
| INTRODUCTION |
| BT YAHOO! |
| Corporate Strategy |
| Internet Services |
| Recent Developments |
| Advertising |
| Profitability |
| Table 25: Financial Results for BT Group PLC (£000), Years Ending 31st March 2002-2004 |
| WANADOO |
| Corporate Strategy |
| Internet Services |
| Recent Developments |
| Advertising |
| Profitability |
| Table 26: Financial Results for Wanadoo UK PLC (£000), Years Ending 31st December 2001-2003 |
| AOL UK |
| Corporate Strategy |
| Internet Services |
| Recent Developments |
| Advertising |
| Profitability |
| Table 27: Financial Results for AOL (UK) Ltd (£000), Years Ending 31st December 2001-2003 |
| TISCALI UK |
| Corporate Strategy |
| Internet Services |
| Recent Developments |
| Advertising |
| Profitability |
| ntl |
| Corporate Strategy |
| Internet Services |
| Recent Developments |
| Advertising |
| Profitability |
| Table 28: Financial Results for ntl Inc (£m), Quarter Ending 30th September 2003 and 2004 |
| TELEWEST BLUEYONDER |
| Corporate Strategy |
| Internet Services |
| Recent Developments |
| Advertising |
| Profitability |
| Table 29: Financial Results for Telewest Communications PLC (£000), Years Ending 31st December 2001-2003 |
| BREATHE |
| Corporate Strategy |
| Internet Services |
| Advertising |
| Profitability |
| VIRGIN.NET |
| Corporate Strategy |
| Internet Services |
| Recent Developments |
| Advertising |
| Profitability |
| Table 30: Financial Results for Virgin Net Ltd (£000), Years Ending 31st December 2001-2003 |
| CLARANET |
| Corporate Strategy |
| Internet Services |
| Recent Developments |
| Advertising |
| Profitability |
| Table 31: Financial Results for Claranet Ltd (£000), Years Ending 30th June 2001-2003 |
| BRIGHTVIEW |
| Corporate Strategy |
| Internet Services |
| Advertising |
| Profitability |
| 9. The Future |
| FORECASTS 2005 TO 2009 |
| Table 32: Forecast UK Homes with Internet Connection (million), 2005-2009 |
| Table 33: Forecast Narrowband and Broadband Connections (%), 2005-2009 |
| 10. Glossary |
| 11. Further Sources |
| Associations |
| Publications |
| Government Publications |
| Other Sources |
| Bonnier Information Sources |
EXECUTIVE SUMMARY
| The Internet service provider (ISP) market has changed radically since 2001. There has been a dramatic shake-out in the top ten, with some names (e.g. Tiny, 08002Go and World Online) disappearing, and the brands Claranet, Virgin.net and Telewest blueyonder emerging. Even Freeserve has been rebranded as Wanadoo. The potential user base has also undergone major changes. Consumers are now more willing to change ISPs, and most find it easy to do so. Smaller ISPs, such as waitrose.com, are scoring higher among users for satisfaction than traditional suppliers such as AOL. Retaining customer loyalty has become a prime concern among ISP executives. |
| Internet connections in the UK have burgeoned. National Statistics reported that, in the second quarter of 2004, 52% of households in the UK could access the Internet from home, compared with just 9% in the same quarter of 1998. The surge in broadband looks set to outpace the growth in the number of PC Internet connections in the home, and is the main recent development in the ISP world. |
| The UK also leads the Group of Seven (G7) countries in terms of availability, with 97% broadband coverage. This is expected to exceed 99% by summer 2005. Much of that is concentrated in urban areas. Cable broadband offered by companies such as ntl and Telewest covers around 40% of the population. The ratio of broadband to narrowband connections is on the increase. On the other hand, the index of narrowband (dial-up) connections, after a peak in February 2002, continues to decrease. However, dial-up still dominates the overall number of subscriptions. |
| The UK is the second-largest broadband market in Europe, and a report carried out by the Office of Telecommunications (Oftel) in 2003 showed that UK prices are cheaper than many other countries for broadband, encouraging faster uptake. (Oftel has since been replaced by the Office of Communications [Ofcom].) The UK also had the fastest-growing broadband market in Europe. However, research generally shows that the pace of growth in Internet users has begun to slow somewhat. Competition among ISPs has heightened. |
| The PC remains the prime medium for Internet access in the UK and looks set to remain so. Only a small minority of Internet users show any desire to access it via a mobile telephone, but this is likely to grow as multimedia messaging services expand. Interactive television has potential as the medium offering the Internet to the masses, with the penetration of digital television likely to reach 100% in the UK, once analogue broadcasting is switched off by 2010. |
| Key Note believes there is scope for continued growth in Internet user numbers. Some of the factors influencing market growth include slowing take-up rates but faster access speeds. Broadband will prevail and, with monthly charges falling, will also help to attract more users, with easier video and music downloading. The number of users accessing via broadband will outstrip narrowband users in 2006. Mobile and wireless access will increase, as a growing number of users access the Internet on the move, e.g. from wireless fidelity (Wi-Fi) hotspots. Technology options are widening, with features such as Voice over Internet Protocol (VoIP) appearing, which allows ISP users to make free telephone calls to friends. |
Text © 2005 Key Note
| Can't find what you
need? Try our "Research on Request" market report service and define your own report research! Fixed prices - £150, £450 and £1,250 - and fixed delivery of 4, 5 and 14 days |
| Click here for full details |
Ariadne - working together with our customers
to enhance productivity and increase knowledge
© 2005
www.the-list.co.uk Ariadne
Last updated by Amanda Porteous September
2005
