UK Broadband Growth Takes a Hit

Only about 200,000 households signed up for broadband subscriptions in the last quarter of 2008 in the U.K., showing that growth in the sector is not immune to current economic woes, according to estimates from market research company Point Topic.

The growth is less than half what it forecast before the third-quarter financial sector crisis. Numbers were expected to be down compared to the 620,000 households signing up for broadband during the fourth quarter one year earlier, but not by that much, according to Tim Johnson, chief analyst at Point Topic.

BT Wholesale and its resellers together lost about 300,000 household broadband subscribers. ISPs (Internet service providers) using local loop unbundling to provide broadband services, including Carphone Warehouse, Sky, Tiscali and Orange, did a bit better and added nearly 430,000 households among them, according to Point Topic.

Broadband will continue to slowly grow, but increasing overall Internet penetration will be a bigger challenge. Currently, broadband growth mostly comes from households moving from dial-up Internet connections. Overall Internet growth has come to a halt, however, and 9 million homes are still without access.

Bringing the Internet to homes and businesses that are completely without access would be a good choice, if the U.K. government wants to spend money to stimulate economic growth, Johnson said.