The UK broadband market is showing signs of a gradual recovery after experiencing the lowest quarterly growth rate ever in Q2 2006. All in all, the country's DSL base grew by 8% in Q3 2006, compared to 6.5% at the end of June. The figures come from a new report from Point Topic, published this week.

"After earlier hiccups, consumer confidence has returned to the UK broadband market. The overall growth rate has improved quite significantly over the last quarter. It signals a full recovery in growth terms and promises a captivating last quarter of 2006", says Katja Mueller, Chief Analyst at Point Topic.

Point Topic estimates that the total number of BT DSL lines increased from 8.07 to 8.49mn by the end of September 2006. With some 410,000 lines added in this quarter, BT's net additions were up slightly compared to 311,004 in Q2 2006. The number of DSL lines in the UK now totals 9.4mn, up from 8.7mn in the last quarter.

While some UK regions excelled, others disappointed. Northern Ireland has the highest DSL growth rate between Q4 2005 and Q3 2006, 44.12%, followed by Wales and Scotland, with 33.16% and 31.51% respectively. But the North East, West Midlands and North West performed weakly. In particular, the populous North West has - with 18.3% - one of the lowest growth rates in the entire set. Only London scored lower - a region in which BT is losing market share to LLU ISPs.

Dr. Mueller points out that with an almost complete BT broadband coverage, the basic provision of broadband in the UK is no longer a pressing issue. Regions with worryingly low penetration rates are also catching up fast. But the UK is now heading for a new digital divide, that of choice in broadband services.

"With a patchy advance in LLU, many UK regions are left out when it comes to new broadband bundles which have LLU at their core and are offered by providers other than BT", she says.
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