BT and BSkyB lead broadband battle

Two firms leave rivals behind in race to sign up most broadband internet customers The race to connect UK households to the broadband network is being won by just two operators, leaving a swathe of competitors behind. BT Group and BSkyB are surging ahead of rivals, according to a series of updates this week from the major broadband suppliers. The former national monopoly capitalised on its large telephone customer base to pull in an extra 141,000 broadband subscribers in the last three months. The increase saw BT take 60% of all new customers in the quarter, consolidating its share of the 20m UK broadband homes at 29%. Sky, which reports tomorrow, is forecast to show an increase of 154,000 homes, having converted more of its 10m TV customers, and thanks to a new strategy of chasing broadband-only subscribers. However Virgin Media, the second-largest supplier with 21.5% of the UK’s 20m broadband-connected households, lost 18,600 customers after a swathe of students switched off their service for the summer. TalkTalk, which was created in 2009 when Carphone Warehouse merged its internet business with Tiscali and now controls 21% of the market, lost 27,000 customers in the quarter. The company has been concentrating on improving loyalty through better customer service rather than chasing new business. Of the mobile companies with the largest broadband followings, Orange has lost around 80,000 customers since last year, and O2 remains flat. “Obviously for Sky and BT, having an existing customer base, a captive audience, is a huge competitive advantage in terms of selling in other products,” said Chris Williams, of price comparer Simplifydigital. TalkTalk’s share price rose 3p to 141p as it announced half-year results, after investors saw progress in improving customer experience and a promised £40m in cost savings from the merger. Calls to its helplines have almost halved in a year, and three-quarters of new customers are connected within 20 days, compared with half six months earlier. “BT has benefited from the turmoil at TalkTalk,” said Mark James at broker Liberum Capital. But he cautioned: “As the market continues to grow, Sky will take share off BT and Virgin Media. And as TalkTalk gets its act together, we will see people making their decision based on price and BT’s copper is pretty expensive.” BT reported a revenue dip of 5% and a 20% increase in profits before tax during the three months to 30 June. Its Global Services division, which services corporate clients, won £1.6bn of business in the quarter, including its largest-ever contract with the Brazilian post office. BT Carphone Warehouse Technology sector Broadband Internet BSkyB Virgin Media Media business guardian.co.uk

Posted by on July 28, 2011. Filed under News, Politics, World News. You can follow any responses to this entry through the RSS 2.0. You can skip to the end and leave a response. Pinging is currently not allowed.