BT loses majority share of fixed-line market

Incumbent telco sees its share of the traditional fixed-line call market drop below 50 percent for the first time, although new lines of business are growing

BT's share of fixed-line call volumes fell below 50 percent for the first time last year, an annual report by Ofcom has revealed.

This year's edition of The UK Communications Market, the regulator's annual survey of the nation's media consumption, shows that BT's share of the fixed-line market stood at only 48 percent in 2006, compared with 52 percent in 2005.

Taking into account mobile as well as fixed-line calls, BT's market share was only 23 percent in 2006, compared with 26 percent in 2005.

Mobile operators all saw their market share remain flat or increase from 2005 to 2006, with the big winners being virtual operators such as Virgin Mobile, who resell other networks' connectivity rather than having their own infrastructure. The virtual operators' share of the market stood at 10 percent in 2006, up from nine percent the year before.

The report also surveyed the business market, where in 2006 BT had a smaller market share of fixed-line calls at just 38 percent — a drop of one percent from 2005.

Meanwhile, mobile data revenues in the business market increased by a hefty 60 percent between 2005 and 2006, up from £500m to £800m. Ofcom attributes the rise largely to the increasing prevalence of smartphones with PDA functionality, which are able to access emails and web services. Mobile voice revenues in the business sector also rose, up 12 percent from £4.6bn to £5.1bn.

A spokesperson for BT told on Thursday that "the calls and lines business is increasingly less what BT's business is about. We have certainly seen a reduction in retail customers, but that's a result of competition". The spokesperson added that BT's new lines of business — particularly in IT, content and global network services — were booming. BT's retail broadband revenue grew by 19 percent in the last quarter, while the company's internet telephony business grew by 23 percent in the same period.

During 2006, O2 overtook Vodafone for the first time as the mobile network achieving the highest revenue. O2, which is now owned by Spanish telco Telefonica, gained the largest number of subscribers in 2003 but it is only now that revenues have caught up.

There are now two mobile subscriptions in the UK for every fixed-line subscription. However, while the number of fixed-line connections continues to decline, it is now doing so at a slowing rate — possibly reflecting the requirement to have a fixed-line subscription in order to have a broadband connection.