Page 3: Competition and growth
The figures below show the forecast growth of broadband and associated factors in the UK gaming market:
It is clear from the chart that there will be a substantial growth in the use of online consoles (1,300%), and this will attract many competitors to the market. The UK is the most competitive broadband market in the world. There are more than 150 ADSL providers - and cable companies have about a 40% market share. ADSL providers purchase access to the broadband network from BT Wholesale - the business-to-business division of BT. The other division is BT Retail which sells Broadband from BT, competing against the other ISPs, to consumers. Both are part of BT Group plc.
This provides BT Group with a tremendous opportunity to grow its business. Currently, voice calls using landlines is a mature market - it has reached a plateau. In order to maintain profitability BT needed to consider another area of growth.
For BT Wholesale, broadband is an opportunity to grow its market based on the existing copper wire network (an infrastructure originally created in the 1960s). Upgrading an exchange to handle ADSL technology is cheaper than building a completely new network but it still involves considerable investment. The upgrade route was chosen because it used existing infrastructure, and was less risky and quicker to bring to market. This was important for BT to find a solution to compete with the demands of innovative technologies such as cable.
For BT Retail the opportunity is to expand its presence in the growing broadband market. This is intensely competitive. The key to success therefore lies in providing a better product supported by better communication i.e. the most appropriate marketing mix.