Growing subscriber numbers will propel the industry's expansion
London, United Kingdom (PRWEB) April 25, 2013
The UK Internet Service Providers industry includes operators that provide internet access via fixed lines, to businesses, households and government. Providers may also offer a range of related services to businesses and large corporations. The industry has displayed only modest growth over the past five years, but this is a relatively strong performance against the background of the wider telecommunications sector. This reflects the growing importance and influence that the internet has on the day-to-day lives of consumers and businesses. According to IBISWorld industry analyst Andrew Johnson, “businesses and households alike are using the internet daily, as entrenched services such as general browsing, communications and social networking make the internet a necessity." Value-added services are also allowing the industry to outperform the sector. Industry revenue is expected to rise at a compound annual rate of 2.6% over the five years through 2013-14.
The ability for internet service providers to unbundle their service from an incumbent's local exchange has provided for some aggressive pricing strategies in internet services. Local loop unbundling is also a means of uncoupling internet provision from traditional fixed-line services, which are losing out to the mobile alternative. This is boosting usage by facilitating access to various data-intensive applications such as online gaming, online commerce, video streaming and content downloads. In 2013-14, the industry is expected to generate £5.4 billion in revenue, a 2.8% increase from the previous year.
In the five years through 2018-19, the industry is projected to grow at a stronger rate. Larger gains made by the industry will result in a short-term influx of new operators trying for a quick market grab. Johnson adds, “market share will be made available with the roll-out of the fibre-optic network and the expanding number of service offerings that come with it”. However, as experienced in the past five years, economies of scale rule this game and will again shake out smaller operators that cannot find a niche market. Industry profitability will be supported by the growing subscriber base. However, continued investment in network infrastructure and fierce competition between operators will likely limit average margins.
The UK Internet Service Providers industry has a high level of market share concentration with the top four providers accounting for an estimated 82.7% of industry revenue. Major companies include BT, Virgin Media, TalkTalk and BskyB.
For more information on the Internet Service Providers industry, including latest industry trends, statistics, analysis and market share information, purchase the full report from IBISWorld, the nation’s largest publisher of industry research.
IBISWorld industry Report Key Topics
Companies in this industry provide internet access via fixed lines to businesses, households and government. Internet services are provided via dial-up and fixed broadband connections. Internet service providers (ISPs) may also offer support services including web page hosting, web development, domain services, intranets development and administration, and e-commerce based services.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalisation & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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