UK near bottom of broadband league

A report by the OECD (Organisation for Economic Co-operation and Development), has put the UK near the bottom of the league table for broadband penetration. The report is the most serious challenge yet to government assertions that the UK will be the broadband capital of the industrialised world by 2005.

At the same time, questions are still being asked about why BT is not issuing figures for how many subscribers it will have by the end of the year and why it is yet to employ self-install ADSL modems.

The figures -- part of a wider study looking at the growth of the information society -- challenge the government's assertion that the UK is well on course for being the best industrialised nation for high-speed Internet services by 2005. According to the OECD, the UK comes 21st out of 30, with France, the Czech Republic, Portugal, Norway, Spain, Germany, Austria and the Nordic nations all ahead of it.

In an interview with ZDNet News, the e-Minister Patricia Hewitt rejected recent surveys from NetValue and JupiterMMXI which cast considerable doubts on the UK's ability to lead the broadband revolution. She referred instead to more optimistic figures from research firm DataMonitor. However, there is doubt over the accuracy of DataMonitor figures. It claims the UK now has 131,000 cable modem customers but according to Oftel and the cable firms themselves subscribers do not exceed 34,000.

Hewitt also claimed the NetValue figures were "misleading" and inaccurate because they looked at the percentage of online homes rather than taking an overall picture.

The OECD figures do look at the overall picture and still find the UK lagging behind. Its statistics are based on how many broadband connections are available per 100 inhabitants. Korea is well ahead with nearly 10 connections per 100. In second place is Canada with 3.9, the US comes third with 2.25 and Austria is in fourth place with 2.25. Germany has 0.38, France 0.31 and the UK lags with just 0.08 lines per 100 citizens.

OECD analyst Sam Paltridge believes one of the reasons the UK is behind is that BT started to roll out services late. "Like a lot of incumbents it was interested in getting a return on its ISDN business. Also the cable companies were not pushing cable modems until the start of the year," he said. "There was not a lot of competition to drive BT to offer services any earlier."

Paltridge predicts that one of the biggest boosts to UK ADSL penetration will be the introduction of plug and play self-install modems, which remove the need for an engineer to come to a customer's house and in turn reducing the connection fee by around a third -- currently users pay BT a £150 installation fee. The self-install method is easy for consumers, he claimed. "It is no more difficult to install than setting up an ISP service," said Paltridge. Users receive a modem, two discs and a telephone adapter.

BT Ignite says it is currently testing self-install modems and hopes to have a commercial release later in the year. It claims it has been waiting for an international standard to be agreed.

The other biggest factor in boosting UK broadband takeup will be price. Paltridge is confident BT will drop its £49.99 monthly price tag soon. "Telco's launch a service at a certain price and once it thinks it can meet demand the price comes down," he said. Traditionally prices have fallen within a year of the ADSL service being launched and with BT's product a year old this summer Paltridge thinks the price cut is "not far away".

On whether the government's figures for the UK to have the greatest penetration of broadband services by 2005, Paltridge is more reticent. "I don't know because BT hasn't made a projection for how many subscribers it will have by the end of this year," he pointed out.

This contrasted with its rivals on the continent. Deutsche Telekom hopes to have around 2.6 million subscribers by the end of the year, France Telecom wants 600,000, Telecom Italia is also predicting 600,000 and Dutch operator KPNQwest is looking to have 300,000 installations by that time.

BT Ignite claims it cannot offer figures because, unlike the incumbents on the continent, it is a wholesaler rather than a retailer. BTopenworld currently has 26,000 customers but has not set a target for end of year. Recently the ISP shifted its focus away from consumers towards businesses.

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