Local Broadband News

The Technology Debate: The Broadband Marketplace

6th March 2015

 

As the Lincolnshire Broadband Programme approaches a significant milestone where we have successfully enabled 50% of the target figure, it is worth reflecting on the considerable activity within the broadband market.

The Internet Service Providers are embroiled in a major price war at this time, with the increasingly competitive environment seeing prices sliding down lower and lower. All good news for the consumer I hear you say, but why are we now seeing such cut-throat competition in this area?

The answer may well be that the major players such as BT, Sky, Virgin Media and TalkTalk are all striving to push a bundled-up suite of services to their existing and potential new customers. Faster broadband connections are an essential tool in achieving this objective. The movement by BT into the TV Sport arena was always a precursor to an aggressive attempt to wrestle customers away from Sky. With revenue from telephone voice calls diminishing to 'Give Away' status, there has long been a need to seek out further revenue streams.

Added to this, their recent acquisition of Everything Everywhere (EE) is yet another advance in the battle to bundle customer's needs into one package from a single supplier. Recently we saw the battle for 'Triple Play' where operators were looking to entice customers with bundles that included voice, data and TV. Now we move towards 'Quad Play' where operators are seeking to add mobile phone services to the available package.

Enter Virgin Media with recent statements that they intend to extend their infrastructure to cover a further 4 million homes and businesses, supported by a second statement that they are working with Arqiva to extend 4G coverage in major cities and we see the heat being turned up by them in an increasingly hot battle to capture more customers.

Then we add in to the mix recent announcements by both Sky and TalkTalk that they intend to offer 'Free' broadband packages and we head towards a boiling point.

It still looks and sounds like great news for the consumer, but are there potential dark clouds on the horizon. The recent announcements by Sky and TalkTalk regarding 'Free' broadband offers, has been heavily criticised by Virgin Media who feel that such aggressive marketing is likely to damage the case for future investment in upgrades. Is it possible that the ensuing battle results in all sides being forced to drive prices down to such a level that their ability to provide a high quality, customer centric product is put at risk? Do we also see a position where future investment in emerging technologies and services are limited by the amount of cash these operators have available to invest and worst of all, do we see reduced competition as smaller providers are forced out of the game?

Interesting times ahead, but it's still looking good at the moment for the consumer who is seeking a really competitive deal.

We would welcome your comments and observations on all or part of the above article via the onlincolnshire forum at http://www.onlincolnshire.org/forum/login