Broadband market (internet services) in u.k Essay

Broadband market (internet services) in u.k - Essay Example It was in 2000 that significant migration to broadband started to occur; initially domestic internet dialup was commonly used in the UK. Business users at that time relied on expensive high speed internet connections through dedicated leased lines. This was traditionally the domain of the large business which never minded setting aside colossal sums of money on connectivity. Since the late nineties, broadband options were around but only very few cable operators availed the service to customers at cost effective rates. Homes and Small businesses at this time had very limited options with only sporadic availability of high speed connections. Broadband connection was more of a lottery of location. Throughout the United Kingdom, demand for high internet connection continues to increase on yearly basis. This increase in demand also sees the increase in number of broadband service providers. The business is known to be highly lucrative with its demand base continuously and significantly expanding to reach businesses and homes. With the burgeoning of DSL supply the service has become commonplace in the buyers’ market. Further, the code of practice makes it very easy for consumers to migrate from one provider to another if they feel dissatisfied with the service of the existing provider. In effect this makes the broadband market highly competitive as witnessed in continuously dropping prices whose effect is the reduction in providers’ profit margins. Several internet service providers exist in the UK among which includes BT (currently having a leading market share of 35%), NTL, Orange, Virgin, Tiscali, Be Broadband and AOL. Broadband services offered include satellite, cable and ADSL. According to a survey conducted in the first quarter of 2005, BT had a market share of 25%, NTL 20%, AOL 12% and Tiscali 7%. The competition has necessitated the provision of free re-grades to higher speed services and offering of free incentives by providers