Should ofcom intervene and force BT to sell Plusnet?

[m419]

Plusnet the so called independent and award winning ISP for best value is in fact owned by BT, one of the UK's monopolies.

Should they be forced to offload Plusnet?

Would you put up with just one mobile network?

[Hugh]

Depends on your definition of a "monopoly" - according to thinkbroadband (and this was in 2007, before Be and Sky started driving up their numbers), the market is divided up as follows:-

BT Retail inc. Plusnet 3,194,000 24.6%
Virgin Media, ntl:Telewest, Virgin 3,193,000 24.6%
Carphone Warehouse, AOL and Talk Talk 1,932,000 14.9%
Tiscali inc. HomeChoice1 ,336,000 10.3%
Orange 986,000 7.6%

Doesn't look like much of a monopoly to me.

[m419]

In about 60% of the country, you need a BT line which means you are a BT customer, Virgin Media only covers about 40% of the population, which means its a virtual monopoly.

The figures you give from 2007 have changed dramitcally, mass migration to Virgin Broadband,O2 Broadband and some migration to Sky branded broadband products occured in 2008 and 2009 because of the poor offering and poor quality service offered by Bulldog,Orange,Tiscali and TalkTalk. TalkTalk has retained its 2 milion figure by buying out struggling or underperforming rivals such as Tiscali,Tele-2,One Tel/British Gas. Tiscali also makes up of Toucan,Pipex and Bulldog.

As for the mobile phone industry, its begining to shrink, its likely that we will loose T-Mobile and some of these virtual network operators, its likely to look like this:

1998:

Vodafone Analogue
Cellnet Analogue
Vodafone 2G
Cellnet 2G
One2One 2G
Orange 2G
Hutchison Paging
Page One (Formerly Mercury Paging)
BT Paging
Vodafone Paging

Late 2002:

O2 2G (Formerly BT Cellnet)
Vodafone 2G
Hutchison 3G
T-Mobile 2G (Formerly One2One)
Orange 2G
O2 Paging (Formerly BT Paging)
Page One
Vodafone Paging

2007:

Much the same as 2008


2008:

O2 2G
O2 3G
Vodafone 2G
Vodafone 3G
Orange 2G
Orange 3G
Hutchison 3G
T-Mobile 2G
T-Mobile 3G
Page One (paging)
Vodafone Paging

2012:

O2 2G
O2-Vodafone merge 3G network
Vodafone 2G
Orange 2G
Hutchison 2G (Former T-Mobile 2G network)
Hutchison and Orange 3G merged network
Page One (Paging)

2020:

O2-Vodafone merged 3G network
Hutchison and Orange merged 3G network

As you can see it just gets smaller and smaller and monopolies and duopolies form.

By 2020 Page one and vodafone would have closed its paging services.

It is likely that Orange (UK France Telecom) will disappear in time, high competition in the mobile phone industry will force them out, Orange Home/Business broadband formerly Freeserve and Wanadoo is apparently loosing around 188,000 customers a quarter and gaining very few in return.

Demon is likely to disappear and be swallowed up, now that Cable and Wireless own Thus, Cable and Wireless is very unlikely to keep on residential and small business customers, the most likely to take over Demon would be Virgin Media National or O2.

Sky has probably reached its limit and probably won't grow any further due to slow speeds and high competition. Sky use there broadband service to keep its TV subscribers sweet however with Virgin Media and O2 offering speeds as high as 20MB and 50MB, Sky can't compete, well not for a long time.

Plusnet is one off those stagnant ones where they do well for the first few months of advertising and suddenly come to a standstill and then next hear that they are up for sale.

So the ISP successors will be:

BT
Virgin Media
Cable and Wireless
Verizon
TalkTalk
Colt

For residential customers, there are only 3 providers to choose from in the above list, so as you can see,its becoming a monopoly. The others provide access and resell under brands such as Tesco Broadband and Post Office broadband.

It is highly unlikely that Verizon and Colt will start selling directly to residential customers.

As for businesses, the market has gotten smaller too, Cable and Wireless over the last few years has swallowed up, Bulldog Communications,Energis,Thus/Your Communications.

[Ignitionnet]

There are dozens of other operators delivering services via the same BT Wholesale DSL platform that Plusnet use. Plusnet are a retail DSL operator, along with many others, so BT owning them is in no way a monopoly.

There are many other things Ofcom should get involved with relating to BT, Plusnet are the least of their concerns.

EDIT: Just out of interest, why don't you think that Sky can keep up with O2 given that both purchase the same BT Openreach products to deliver their services? Much as I appreciate your passion here I think it's a tad misplaced and I'm not sure I get what you are trying to say or how accurate some of your assertions about 'the future' are. The only reason Sky don't match O2/Be right now for speed is that they choose not to. Sky actually have a far higher bandwidth core network than O2/Be in the UK right now. As far as Sky's slow growth goes the figures disagree with you on that one, they are the fastest growing ISP in the country.

Regarding the mobile company arrangements, these are not relevant to retail services they are network share agreements to try and reduce CapEx and OpEx costs through reduction of duplicated infrastructure. Just because 3 and Orange may share some infrastructure doesn't mean that either is simply going to give the other their retail operations, and I am of course ignoring there that it's actually 3 and T-Mobile that are sharing networks, not 3 and Orange / France Telecom.

[Stuart]

Originally Posted by m419

In about 60% of the country, you need a BT line which means you are a BT customer,

You only need pay BT Line Rental. OK, they do get some money from most ISPs (Virgin Cable being the exception), but you do have a large choice of ISPs.

The market is not a monopoly. While BT may provide the last mile, if you have access to LLU, your ISP carries the data once it gets past your exchange.

What you want would require that BT's network be split, with BT owning some lines and other telcos owning other lines. Ignoring the fact that any fault with one of the lines could cause logistical problems if the engineer fixing it is not allowed to touch the other lines near it (which he may not be : Virgin are not allowed to touch BT lines), what would be likely to happen is that the other companies would subcontract one or two companies for maintenance of the phone lines. Essentially what happens now to some extent with BT.

The other option (and one that would actually avoid the problems I point out above, but would bring a whole load more) is for companies to build their own phone network from scratch, essentially what the cable companies did. This would cost a lot of money (in the order of £10s of millions even for individual towns), so, in today's economic climate, is unlikely to happen. Add in the problems of planning permission and the fact that building a new phone network would cause a lot of disruption for a town's population.

And, of course, even if BT did sell off PlusNet, you'd still need a BT line to use them.

---------- Post added at 01:28 ---------- Previous post was at 01:12 ----------

Originally Posted by m419

For residential customers, there are only 3 providers to choose from in the above list, so as you can see,its becoming a monopoly. The others provide access and resell under brands such as Tesco Broadband and Post Office broadband.

It is highly unlikely that Verizon and Colt will start selling directly to residential customers.

As for businesses, the market has gotten smaller too, Cable and Wireless over the last few years has swallowed up, Bulldog Communications,Energis,Thus/Your Communications.

You appear to be misunderstanding something. The carriers you mention are wholesalers. In most markets (including physical goods) there are only a few wholesalers. Look at newspapers. If you buy a newspaper but not from a supermarket, the chances are that the paper you have bought has come from one of two wholesalers: John Menzies or W.H.Smiths. Together, they distribute to nearly all of the shops in the UK that sell Newspapers and Magazines. In fact, IIRC, W.H.Smith also distributes Newspapers and Mags to Sainsburys.

I have to admit, I personally think a market is more healthy if there are more competitors, so I don't think a shrinking market is ultimately a good thing. Unfortunately, it is the ultimate goal of capitalism (most companies will seek to control a market given half the chance, but IMO it isn't in the economy's best interest to have one company given too much control).

[webcrawler2050]

Simple answer. No

Sick of regulator this and regulator that, ruining business chances.