Vital statistics: This month

With broadband uptake increasing in the UK, Emma Rigby finds out why the figures are set to rise further

Some 15 per cent of UK homes - that's almost four million - have broadband and the figure is rising, according to Ofcom.

There has been a 25 per cent growth in connections in the last quarter and the industry predicts that, by the end of the year, five million homes will have high-speed access.

To put this in context, 64 per cent of UK homes have a PC and 54 per cent have web access.

Gavin Wheeler, managing director of direct response agency WDMP, says the major driving force is price discounting from providers like AOL, Tiscali and Wanadoo after BT dropped its wholesale prices. Starting at £19.99, the price is competitive compared with narrowband and saves the cost of a second line.

More providers have entered the market since BT dropped its wholesale prices in May 2004 - from £35 per user to £11 - to switch from one BT IPStream provider to another. NTL is the market leader with more than one million subscribers and 26 per cent of the market. BT Retail has 928,000 subscribers and 23 per cent of the market, according to Jupiter Research.

Wheeler says: "Names like Freeserve (now Wanadoo) were still pushing narrowband a year ago when NTL and Freeserve were pushing broadband. Now, BT Retail has dropped its retail price, Wanadoo has been able to offer aggressive pricing - £17.99 for a 512kbps limited download service," he adds.

Wheeler says growth isn't down to content: "There hasn't been consumer-friendly content on broadband. Services such as iTunes had to wait for a critical mass of broadband users before it could roll out its services in the UK. It's all down to simple access and cost."

He suggests future content will act as a key motivator for users signing up to broadband. In addition, 29 per cent of users are attracted by simultaneous voice and data. A faster download speed is a motivator for 64 per cent of users, according to 2003 figures from Oftel, with 45 per cent of narrowband users frustrated by lack of speed.

Wheeler says new players are likely to add to the competition after Tesco's announcement that it will launch a sub-£20, 512kbps service. To compete, established players are reacting to protect their base. NTL and Telewest have raised the speed of standard 512kbps services to 750kbps while AOL is advertising 'no limits' to its service.

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