Point Topic publishes optimistic forecasts for superfast broadband

Leading broadband analyst firm, Point Topic, predicts there will be over 10.5 million superfast broadband lines in Britain within the next five years. With another 4.6 million cable broadband connections this means that almost 60% of broadband customers – and more than half of all homes and businesses – will be using superfast speeds of 30 megabits or more by the end of 2016.
Figure 1: Broadband forecast over the next five years
Figure 1: Broadband forecast over the next five years

“It’s still a risky and controversial forecast,” says Tim Johnson, Chief Analyst at Point Topic.  “It is always difficult to predict something which is expected to grow so fast. If the forecast is correct, the number of superfast lines will grow 50 times over between mid-2011 and the end of 2016.”

The forecast is also controversial because of uncertainty about both the technology and the market. BT is a late starter in this area. Its superfast technology will be mainly Fibre To The Cabinet (FTTC), which means laying new optical FTTC, then providing short-range but high-speed digital technology over ordinary telephone lines for the last few hundred metres. Telcos in Europe and America have been working with FTTC for years and most have found it hard to roll out and hard to connect customers economically.

“Even more fundamentally, the strength of demand is not there yet,” Johnson points out.  “Users are not exactly crawling over each other to get superfast broadband today.

“But we do believe that the demand for bandwidth will continue rising steadily just as it has done for the past 15 years,” Johnson says. By 2016, 30 megabits will be regarded as a good standard connection and 100 megabits by 2021 he predicts.

As far as the technology issues are concerned, BT is already running slightly ahead of Point Topic’s forecasts for this year. Its announcement yesterday that it will bring forward its FTTC rollout by a full year is an encouraging vote of confidence. The company is already rolling out on a much bigger scale than most of its peers in other countries. “BT is doing better than we expected a few months ago,” says Johnson. “Speeding up the rollout shows they are getting on top of the problems.”

BT’s revised plan aims to ensure that at least two-thirds of homes and businesses in the UK will have superfast broadband available by the end of 2014. Point Topic’s forecast projects that not only will superfast be widely available, it will also be taken up by users in commercially attractive numbers.

Another factor in favour of the forecast proving at least roughly correct is Point Topic’s past record. Four years ago, in October 2007, it forecast there would be 20 million broadband lines in the UK by mid-2011. The actual total was 20.16m, an error of less than 0.8%.
 
“We’re unlikely to be quite so accurate with superfast broadband over the next few years,” admits Johnson. “It’s going to be a much more dynamic market.”

Meanwhile many people, including BT and other telcos, broadband users and anyone who cares about the British economy will be hoping Point Topic is broadly right. Billions of pounds of investment and millions of demanding users will be depending on the delivery of a successful superfast broadband network.