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Thursday, November 26, 2009

UK ISP landscape changing

Ofcom's latest market research (yes, 3 months ago! I'm slowly catching up) shows that the SMS texting market is almost as big as the fixed-mobile broadband market. That's really quite stunning, but shows where margins can be made - on 160 character texts. Fixed and wholesale revenues, and fixed lines, continue to decline, as does cable market share, and mobile voice is finally ceasing its growth.
So what happens next? Figure 4.6 shows TalkTalk has 25% market share, BT 26%, Orange (formerly mighty Freeserve) only 5% and cable 22% (down by half in the five years of mergers). Sky has taken its market share of about 13% mainly from cable and the TalkTalk partners.
Well, that means that infrastructure players control over 60% of the retail market - Sky with its satellite infrastructure has plenty of incentive to stop free video jacking up its BT backhaul costs. There is only really one competitive player in the UK: TalkTalk.
Notice who has been the most vocal consumer rights champion in the 'Three Strikes' debate? Yes, that single big  competitive player, the only game in town against the throttlers? But why should TalkTalk be such a consumer advocate - does it make sense? Only if that keeps regulatory costs down, otherwise it might as well throw its lot in with the oligopoly.
This is not an attractive market structure for net neutrality. Competition solves all problems, claims Ofcom...

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