ISPs are seeing growing demand for ultrafast broadband

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Virgin Media in particular saw encouraging growth, with the proportion of their customers subscribing to ultrafast services growing from 51% to 64% in a single year.

BT, for their part, revealed that their combined G.fast and fibre-to-the-premises (FTTP) network grow from 326,000 homes passed in 2016 to 771,000 in 2017, with 130,000 customers actually subscribing to an ultrafast service.

And while this is still a relatively low number in absolute terms, it indicates that amid all the Government pressure for ultrafast broadband, demand for the fastest possible connections is steadily growing.

Growth

As can be expected from quarterly financial results, Virgin Media and BT's reports divulged some fairly standard growth figures.

Virgin Media now have approximately 5.45 million broadband subscribers, having added 57,000 in the three months to September. By comparison, BT added just under 22,000 new broadband customers to their total base of around 9.3 million, continuing the pattern of lacklustre growth reported in previous quarters.

Yet as unremarkable as such figures are, there were more interesting disclosures in both sets of results regarding the take up of ultrafast services.

As mentioned above, 64% of Virgin's broadband subscribers - about 3.5 million customers - are connected to an ultrafast service, meaning they receive speeds of at least 100Mb.

To be fair, of the four broadband packages offered by Virgin (50Mb, 100Mb, 200Mb and 300Mb) only one isn't ultrafast, yet nonetheless the fact that this proportion was 51% only a year ago is impressive.

Similarly, BT expanded their ultrafast network by 136.5% between 2016 and 2017, with their 771,000 connections meaning that it's more extensive that Hyperoptic's 500,000-strong network, for example.

This growth has arisen largely from G.fast pilots in 46 different locations, with BT expecting to reach one million premises with G.fast by the end of the 2017/18 financial year, and with their CEO, Gavin Patterson, declaring, "We are committed to delivering ultrafast speeds to 12 million premises by the end of 2020".

Yet added to this, a portion of the 771,000 ultrafast connections are pure fibre (FTTP) rather than G.fast, arising partly from how Openreach began connecting new build developments to their nascent FTTP network last year.

And according to an Openreach spokesperson, the total take up within this 771,000 is currently 130,000, or 16.9%.

A spur to further growth

This may not be much, but it's worth remembering that take up was virtually zero last year, when BT began trials with the first of their G.fast pilots.

On top of this, the 16.9% figure looks much better in light of how FTTP networks currently cover only 3% of the UK population, suggesting that demand outstrips availability.

Taken with Virgin Media's encouraging performance, it offers an indication of how there is a growing potential market for ultrafast and FTTP broadband, despite the industry tending to assume otherwise.

For instance, in the consultation Openreach published at the beginning of this week, it was proposed that there should be a forced switchover to FTTP, since it wasn't clear that demand was strong enough on its own to make investment worthwhile.

However, such a switchover would be paid for by all customers taking their broadband from Openreach, regardless of whether they'd be on the FTTP network or not. Clearly, this wouldn't be especially fair, especially on those customers who would never need or want an FTTP connection, even when one was within reach.

As such, the news of increasing demand for ultrafast services undermines any argument that there should be a forced switchover to FTTP.

Yet at least as importantly, increasing demand can act as a spur to other providers and networks beyond BT and Openreach. Besides a few notable dalliances, many of these have been reluctant to venture into FTTP investment.

Recently, however, there have been signs that Vodafone, for instance, want to co-invest in Openreach, a motivation that may receive greater impetus in light of the increasing demand for ultrafast broadband.

And if demand continues to grow in following quarters, then it won't only be Vodafone considering an investment in FTTP, but other providers as well. And as a result, the UK may soon find the quality of its broadband network rising exponentially.