Ofcom's second full analysis  
of the UK's communications infrastructure 

 
Publication date: 
8 December 2014 
 

## About This Document

Every three years, Ofcom is required by the Communications Act 2003 to prepare a report for the Secretary of State for Culture, Media and Sport on the status of electronic communications networks and services in the UK. We are then required to publish the report.1  
The UK's communications infrastructure is a vital enabler, supporting a vast amount of economic and social activity, by both consumers and businesses. This report provides an overview of the state of that infrastructure: its coverage, capacity and reliability. We consider these at a national level and the variation across the UK.  
The report looks at: 

- 
the coverage, performance and capacity of networks and services;  
- 
use of spectrum;  
- 
infrastructure sharing; and  
- 
security and resilience.  
The main networks considered are the fixed broadband and telephony networks; mobile voice and data networks; Wi-Fi; and broadcast and radio networks. The report includes detailed analysis of operators' data, external research and an assessment of the main strategic and policy implications. 

The first Infrastructure Report was published in November 2011. Since then we have issued annual updates, focusing on the areas of the most rapid change such as the coverage and capacity of fixed, mobile and broadcast networks. This second full report will be of interest to those looking to understand the nature, performance and reach of the UK's communications infrastructure. It will be of direct relevance to policymakers and industry stakeholders and, we hope, will make interesting reading for anyone who wants to explore how our infrastructure is evolving. Alongside this document, we are publishing data from the report in an interactive form on our website, at http://infrastructure.ofcom.org.uk. We are also publishing a number of research reports that we commissioned alongside this document. These are detailed in Annex 4.  

## Contents

 
Section 
 
Page 
1 
Executive summary 
1 
2 
Introduction and background to the report 
15 
3 
Fixed broadband networks 
18 
4 
SME connectivity 
57 
5 
Mobile networks and Wi-Fi 
67 
6 
Broadcast networks 
108 
7 
Security and resilience 
124 
8 
Convergence and seamless connectivity 
146 
9 
Internet networks 
153 
 
Annex 
 
Page 
1 
Methodology 
176 
2 
Glossary 
180 
3 
Mobile coverage scenarios 
185 
4 
Research reports 
188 
 

## Section 1 1 Executive Summary Overview

 
Communications services are critical to the UK's economic success and social 
1.1
cohesion. They are used by the average UK adult for over half of their waking hours. The coverage, capacity and reliability of the digital infrastructure over which these services are provided are of fundamental importance to both consumers and businesses. 
 
The majority of the investment to build and maintain communications networks is 
1.2
delivered by commercial providers, competing to deliver services to consumers and 
businesses. Ofcom is responsible for the regulatory framework that ensures effective competition. It is our role to help create the conditions that will foster efficient investment and innovation, leading to a wide range of high quality communications services throughout the UK. 
 
However, the economics of networks means there are parts of the UK that will not be 
1.3
fully served by the market. There are also some services which may not be provided to all by the market. In these circumstances, Ofcom or the Government may intervene to further consumer and citizen interests. 
 
Who takes action, and how, depends on the levers available. For example, Ofcom 
1.4
has moved to improve mobile coverage by attaching coverage obligations to mobile licences. The Government has intervened to improve the coverage of mobile networks and superfast broadband through public funding to subsidise wider roll-out. 
 
The challenge when designing any intervention is to ensure that it is precisely 
1.5
targeted, so that it is an efficient means of achieving the policy goal, and at the same time minimises the risk of knock-on effects that could reduce competition or private 
sector investment. Such targeting requires an accurate and up to date understanding of the state of the UK's infrastructure. 
 
This report is designed to provide this information. It follows the inaugural report in 
1.6
2011 and a series of smaller annual updates. It considers how networks are adapting to increases in demand and highlights challenges for the future. 
 
We have also created an online map and visualisation tool for much of the report's 
1.7
data. This allows users to assess the coverage and performance of the infrastructure in their area and compare it to others. The tool is available at 
http://infrastructure.ofcom.org.uk. 

## Fixed Broadband Services Availability And Take-Up Of Broadband Services

 
Fixed broadband technology is almost universally available and the average 
1.8
download speed for the entire UK is currently 23Mbit/s. However, broadband speeds available to consumers vary considerably and it is more useful to consider the availability of broadband services in several tiers: 
- 
Basic broadband - greater than 2Mbit/s. The Government's Universal Service 
Commitment aims for universal availability of at least 2Mbit/s broadband. We 
estimate that only 3% of UK premises fall below this availability threshold. Although this percentage is small, the lack of even a basic broadband service 
poses considerable problems for those affected. 
- 
Standard broadband - greater than 10Mbit/s. There is emerging evidence 
that a typical household requires a download speed of around 10Mbit/s. Below 
this level, demand is likely to be constrained. We estimate that 15% of UK 
households cannot currently receive 10Mbit/s.  
- 
Superfast broadband - greater than 30Mbit/s. The deployment of superfast 
broadband, delivering download speeds of 30Mbit/s and above, started in 2009. 
Coverage and take-up have increased rapidly: superfast broadband is now 
available to 75% of premises in the UK, with take-up of 21%.  
 
Superfast broadband is being delivered through a combination of commercial roll-out 
1.9
and a publicly-funded programme targeting those areas of the country which 
commercial providers are unlikely to reach. The Government's aim is to deliver 
superfast broadband to 95% of UK premises by 2017. This is an aggressive target and publicly-funded roll-out is currently reaching up to 40,000 new premises a week.  
 
Finally, we note that 27% of households still do not take a fixed broadband 
1.10
connection of any kind. Some of these will be using mobile data services, such as 3G and 4G connections on their smartphones or tablets. However, around 18% of households have no home access to the internet, fixed or mobile.  

## Challenges For Broadband Roll-Out

 
Although the overall availability of broadband services is improving, specific 
1.11
challenges remain for some consumers and businesses. And for those who are affected by poor performance, it is no consolation that the national average is improving.  
 
We identify four specific sets of concerns: rural availability, city not-spots, the 
1.12
availability of superfast broadband to small and medium sized enterprises (SMEs) 
and the need for a roadmap from superfast to 'ultrafast' broadband. 
 
Rural roll-out.  Reaching the most rural premises in the UK is always a challenge, 
1.13
as it is more expensive to deploy networks in areas of low population density. The Government is looking at the range of technological options which might be used to provide superfast broadband to the 'final 5%'. 
 
One specific challenge is that the Fibre to the Cabinet technology commonly used by 
1.14
BT to deliver Next Generation Access (NGA) does not always deliver superfast broadband speeds. This happens when the length of the connection from a customer to a cabinet is too long to support a speed of 30Mbit/s. It is a particular issue in Northern Ireland, where 17% of premises have access to an NGA service which does not deliver superfast speeds. In the UK as a whole the equivalent figure is 3%.   
 
City not-spots. Availability concerns are not restricted to rural areas. For example, 
1.15
central London also has areas of poor superfast broadband coverage. Such urban 
not-spots are generally caused when there is no street cabinet to upgrade, because a customer has a direct connection to the local exchange.2  

 
Work is underway considering how best to take fibre closer to the customer where 
1.16
there is no cabinet. Alternative commercial solutions are already available in a number of urban areas, including wireless solutions from a variety of competing providers.  
 
Availability of NGA technology for SMEs. Small and medium sized enterprises 
1.17
(SMEs) make a substantial contribution to the UK economy. It is therefore particularly important that they have high quality connectivity.  Their needs vary and some use 
widely available business-grade infrastructure and services such as traditional leased 
lines.  
 
However, the improved performance of superfast broadband services compared to 
1.18
previous generations of broadband, coupled with its relatively low price compared to leased line services, means that SMEs will increasingly look to superfast broadband as a primary source of connectivity.  
 
The current availability of superfast broadband based on BT and Virgin Media NGA 
1.19
technology is lower for SMEs than for residential premises.3 At a national level, 56% 
of SMEs have access to NGA-based superfast broadband, compared to 75% for UK 
premises overall. Note however that some SMEs - especially larger ones - will have 
the option of other high speed connectivity services. We will be investigating the 
scale of the residual concern, and potential solutions, in the work we have recently 
announced on the availability and choice of communications services for SMEs.4 

| UK overall    | Micro (excl. sole    | Small   |
|---------------|----------------------|---------|
|               |                      |         |
| Medium        |                      |         |
|               |                      |         |
| Total SMEs    |                      |         |
| traders)      |                      |         |
|               |                      |         |
| 1-9           | 10-49                | 50-249  |
| employees     |                      |         |
|               |                      |         |
| employees     |                      |         |
|               |                      |         |
| employees     |                      |         |
|               |                      |         |
| employees     |                      |         |
|               |                      |         |
|               |                      |         |
| UK            |                      |         |
| 75%           |                      |         |
| 58%           | 51%                  | 47%     |
| Urban         | 83%                  | 70%     |
| Rural         | 22%                  | 15%     |

Source: Ofcom analysis of operator data 

## The Development Of Ultrafast Broadband

 
Looking further ahead, industry and policy-makers are now considering the phase of 
1.20
broadband evolution beyond superfast broadband. Since the technologies being used to deliver superfast broadband are capable of delivering speeds of around 100Mbit/s, the forward-looking debate tends to focus on developing a roadmap to speeds of a gigabit per second (1Gbit/s), commonly referred to as 'ultrafast broadband'.  
 
This is a debate which is taking place internationally. A number of countries are 
1.21
considering how to move beyond current infrastructure to offer the highest possible broadband speeds in order to improve their international competitiveness. We are seeing some early deployments of ultrafast broadband in the UK and we need to 
consider how to build on this.  A range of options are available, some evolutionary, 
others more revolutionary. 

## Evolutionary Upgrade Options

 
One route to ultrafast broadband is a further round of investment to upgrade the 
1.22
existing hybrid copper-fibre access networks. There are two main technology options for this:  
- 
'G.Fast' is a new means of carrying broadband services over copper. It can 
deliver very high speeds over short lengths of copper. 800Mbit/s has been 
achieved in trials, but speeds above 1Gbit/s are practically feasible. A typical 
installation involves placing new equipment at distribution points close to the customer's premises, for example on street telephone poles. The distribution point is then connected by fibre to the core network.  
- 
Cable networks also have an evolutionary path, through the adoption of 
DOCSIS3.15 and physical network rearrangement. This could also deliver peak 
headline speeds in excess of 1Gbit/s. 

## More Revolutionary Upgrade Options

 
The evolutionary options described deliver benefits in their own right. They should 
1.23
also be seen as incremental steps in a longer term evolution which takes fibre to 
every home and every business. There are a variety of technology options for 
achieving this, generically referred to as Fibre to the Premises (FTTP).  
 
The deployment of FTTP is not simple, with a range of technology uncertainties 
1.24
remaining. For traditional telecommunications networks, such as those operated by 
BT, there are two main technology options: passive optical networks (PON) and 
point-to-point fibre.  
- 
PONs remove the need for active electronics in the access network reducing operational complexity and power consumption. However, they are fundamentally 'shared' amongst a number of end users, meaning maximum 
speeds may be limited.  
- 
Point-to-point network architectures offer dedicated connections and potentially 
higher speeds as a result. However, they require active electronics in the 
access network and more fibre, increasing the overall cost.  
 
Today we are seeing deployments of both types of network internationally. FTTP 
1.25
deployment in the UK has been limited so far. BT is offering 'fibre on demand' 
alongside its FTTC network, but has seen very limited take-up so far. We have seen 
smaller scale commercial FTTP developments in specific areas. For example, CityFibre is investing in all-fibre networks in various UK cities, with a trial deployment 
in progress in York.  KCOM is rolling out its largely FTTP 'Lightstream' broadband in 
the Hull area, marketed with speeds up to 100Mbit/s. 
 
For cable networks such as that operated by Virgin Media, cable-specific fibre 
1.26
technologies such as Radio Frequencies over Glass (RFOG) and DOCSIS over Ethernet Passive Optical Networks (DPoE) can be used to deliver ultrafast 
broadband by exploiting the inherently greater bandwidth available in direct fibre 
connections to users. 
 
In addition to providing potentially improved mobile performance, 5G technology may 
1.27
also open up new options for providing ultrafast broadband connectivity to homes and business, as an alternative to fibre-based access solutions. 

## Beyond Broadband Speed

 
As broadband speeds and superfast broadband availability increase over time, 
1.28
factors other than download speed may become more important in determining the consumer experience.  

## Upload Speed

 
Firstly, it is important not to overlook upload speed, which can be crucially important 
1.29
for some services.  High quality video calling, for example, requires both fast 
download and fast upload speeds. The average upload speed in the UK is currently 3Mbit/s, compared to the 23Mbit/s average download speed. For those premises with 
superfast broadband connections, the average upload speed is 8Mbit/s compared to the 56Mbit/s average download speed. 

## New Evidence On Drivers Of Broadband Quality Of Experience

 
This report includes new analysis on the broadband quality of experience and its link 
1.30
to broadband speed. This suggests that for broadband speeds above 10Mbit/s, there are a variety of factors beyond speed which can have a greater on affect the consumer experience. These other factors include the performance of in-home 
equipment and wiring, backhaul capacity, and the means by which communications networks interconnect with content and service providers. Next year we will build on the work presented here, by quantifying these factors more accurately and considering how they can best be communicated to consumers.  

## Traffic Management

 
The way that fixed and mobile providers use traffic management has a direct effect 
1.31
on network performance delivered to users. Operators use traffic management to minimise the effects of network congestion. Whilst the effect is often invisible to 
consumers, the issue has become high profile due to the ongoing 'Net Neutrality' debate.  
 
Having reviewed the operators' summaries of broadband and mobile traffic 
1.32
management practices, we believe they are now being more transparent with consumers over this issue. The most significant development is that all UK mobile 
operators have now discontinued packages which block access to VoIP services. On 
top of this, EE, Vodafone and Virgin Media have signed up to the Broadband Stakeholder Group (BSG) Open Internet Code of Practice.  This means that all major consumer internet providers are committed to the self-regulatory approach, a key 
part of the Government's policy on Net Neutrality. We will continue to monitor the 
market closely to ensure that transparency continues to improve. 

## Resilience And Security

 
As the UK increases its dependence on communications infrastructure, the need for 
1.33
resilience and security grows. This report provides a detailed analysis of major 
network outages. We show, for example, that last year's severe flooding did not have a significant impact on the availability of communications services although it did prolong incident resolution times. We also report on the nature of cyber-attack 
incidents and our work with the Government to improve network security. 

## Fixed Voice

 
Fixed ('landline') voice is near universally available across the UK. However use of 
1.34
traditional landlines for voice calls has been declining for several years and traditional voice networks are aging. Alongside this we see an increasing use of alternatives, including voice services delivered over broadband connections and mobile voice 
services.  
 
Communications providers are therefore starting to consider the long term evolution 
1.35
of their traditional voice networks. This is likely to include greater use of voice delivered over broadband and may ultimately lead to the switching off of the traditional landline network (the 'PSTN' network).  
 
This evolution has a number of implications for services built on PSTN functionality, 
1.36
including for example the level of service guaranteed for calls to the emergency services. We will be carrying out further work on this next year, to ensure that the long term evolution of voice networks is not disruptive for consumers and businesses.  

## Mobile Network Coverage And Usage

 
Mobile services, both voice and data, are increasingly considered vital by consumers 
1.37
and businesses. Some 95% of households in the UK have mobile phones, and 16% are mobile-only: they have no voice landline. Mobile is important in business too: 
79% of SMEs use mobile phones.  
 
The consumer experience of mobile services depends very substantially on the 
1.38
quality of mobile coverage. There are however two practical issues which complicate measurement of mobile coverage: 
- 
The maps of mobile coverage produced by operators are based on theoretical models, calibrated using measurements of actual performance that are broadly accurate overall but can never be absolutely accurate in predicting coverage at a specific location. We will continue to carry out work in this area. 
- 
Consumers use mobile phones in many different situations - indoors, outdoors, 
on the move, in cars, as pedestrians along roads in built-up areas and in wide open spaces. No single measure of coverage can capture all these use cases. 
For this report, we have assessed mobile coverage against a range of different measures in order to gauge the overall consumer experience. 
 
No theoretical model is perfect and there will always be some variance between 
1.39
predicted and actual coverage. We have carried out our own measurement 
programme for this report, as well as gathering data from operators. 

## Mobile Voice Coverage

 
The most commonly quoted measure of mobile coverage is the percentage of UK 
1.40
premises where a customer standing outdoors can make a call. Based on this 
measure, mobile voice coverage in the UK is generally good, with only 0.3% of premises having no coverage by any major network operator, sometimes referred to as 'complete not-spots'. The picture is somewhat less good for indoor coverage, with 
2% of premises not covered by any operator. In-car coverage is similar, with 9% of A 
and B roads not covered by any operator. 
 
Of greater concern are areas where at least one operator has a signal, but not all. 
1.41
These are referred to as 'partial not-spots'. From a consumer perspective, what 
matters most is whether their operator provides a service in their current location. We estimate that 3% of UK premises are in partial not-spots for outdoor coverage, rising 
to 16% for indoor coverage, and that 33% of A and B roads are in partial not-spots 
for in-car usage.  The scale of partial not-spots in the UK means they are more likely to have a practical impact on the consumer experience than total not-spots (of which there are fewer). This is a priority for the Government and we are working closely 
with it and industry to improve coverage to address partial not-spots in particular. 

| Complete not-          | MNO 2G coverage    |
|------------------------|--------------------|
| predictions            |                    |
| 6                      |                    |
| - UK level             |                    |
|                        |                    |
| spots                  |                    |
|                        |                    |
| (no MNO has            |                    |
| signal)                |                    |
|                        |                    |
| Premises (outdoors)    | 0.3%               |
| Premises (indoors)     | 2%                 |
| In car (A and B roads) | 9%                 |
| Geographic (land area) | 11%                |

 
 
2G networks are operated by EE, O2 and Vodafone. They provide similar total levels 
1.42
of coverage of the UK, but the network footprints do not perfectly overlap (leading to 
partial not-spots). 

| O2                     |     | Vodafone   |     |
|------------------------|-----|------------|-----|
| predictions            |     |            |     |
| 7                      |     |            |     |
| - by operator          |     |            |     |
| Premises (outdoors)    | 99% | 99%        | 98% |
| Premises (indoors)     | 94% | 92%        | 90% |
| Geographic coverage    | 78% | 82%        | 78% |
| In car (A and B roads) | 74% | 78%        | 78% |
Partial not-spots 
Served by all 
(at least one 
MNOs 
MNO signal, but 
not all) 

## Mobile Broadband Coverage

 
The availability of **mobile broadband services based on 3G** is lower than the 
1.43
availability of voice services. We estimate that 16% of UK premises are in either 
partial or complete not-spots based on outdoor coverage, rising to 29% for indoor coverage. 55% of A and B roads are in either partial or complete not-spots for in-car use.  
 
4G roll-out has begun relatively recently, but the latest statistics show that good 
1.44
progress has been made, with some operators making significant increases in coverage over the period June to October 2014. We expect that 4G coverage will 
fairly quickly overtake 3G coverage and provide a substantial improvement in the availability of mobile broadband. This is partly because of the coverage obligation we have attached to one of the licences, and partly because some of the spectrum being used is intrinsically better at providing wide area coverage. O2's licence requires it to 
provide indoor 4G coverage to at least 98% of the population by the end of 2017, with at least 95% in Scotland, Wales and Northern Ireland. The other operators have indicated publicly that they will match these coverage levels. 
 
4G services are currently available to 72% of premises, although only 35% are 
1.45
served by Vodafone, O2 and EE.  

Fully served9 
MNO coverage predictions8 
- UK aggregate 
 
Complete not-spots 
Partial notspots 
Premises (outdoors) 
3G 
1% 
15% 
84% 
4G 
28% 
37% 
35% 
Premises (indoors) 
3G 
3% 
26% 
71% 
4G 
37% 
34% 
30% 
In car (A and B roads) 
3G 
17% 
54% 
30% 
4G 
71% 
20% 
9% 
Geographic (land area) 
3G 
22% 
52% 
26% 
4G 
77% 
17% 
5% 

 
All four mobile network providers operate 3G and 4G networks. The most widely 
1.46
available 4G service is EE's, with 68% coverage of premises outdoors. There is more variation between the operators' 3G and 4G coverage than between their 2G coverage. For example, EE and Three have significantly greater 3G geographic 
coverage than O2 and Vodafone. 

|                        | O2    | Vodafone    | EE    |  Three    | MNO coverage    |
|------------------------|-------|-------------|-------|-----------|-----------------|
| predictions            |       |             |       |           |                 |
| 10                     |       |             |       |           |                 |
| - by operator          |       |             |       |           |                 |
| Premises (outdoors)    | 3G    | 91%         | 87%   | 98%       | 98%             |
| 4G                     | 43%   | 37%         | 68%   | -         |                 |
| Premises (indoors)     | 3G    | 84%         | 76%   | 93%       | 93%             |
| 4G                     | 38%   | 32%         | 59%   | -         |                 |
| In-car (A and B roads) | 3G    | 44%         | 37%   | 78%       | 73%             |
| 4G                     | 14%   | 10%         | 26%   | -         |                 |
| Geographic (land area) | 3G    | 44%         | 33%   | 74%       | 68%             |
| 4G                     | 9%    | 7%          | 19%   | -         |                 |

## Mobile Data Use

 
Mobile data use continues to grow, linked to the increasing take-up of smartphones 
1.47
and tablets. Data use grew 53% between 2013 and 2014, similar to the rate of growth in the previous year. Web browsing accounts for 42% of traffic, video streaming for 39%. 
 
Although the percentage growth in mobile data is large, absolute levels of use are 
1.48
still much lower than for fixed broadband. Mobile users are now using an average of 
0.5GB of data per month, compared to an average of 58GB over fixed broadband connections. This suggests that there is substantial scope for further growth in mobile broadband as consumers increase the range of services they access over mobile networks.  

## The Future Development Of Mobile Networks And Services

 
Like fixed networks, mobile networks are continuing to develop and improve, 
1.49
supported by both competition and public policy. For example, Ofcom is seeking to improve both indoor and outdoor coverage by making more low frequency spectrum 
(sub-1 GHz) available. Low frequency spectrum is targeted because it has good 
propagation characteristics. The last significant release of low frequency spectrum was the 800 MHz band, sold in the 4G auction following digital television switchover. 
We recognise that demand for mobile broadband continues to grow, meaning more spectrum is needed for both coverage and capacity reasons. Hence we are looking at further spectrum releases: for example, we will make the 700 MHz band, currently 
used for DTT, available for mobile broadband use from 2022.11 
 
MNOs are currently working to improve mobile broadband download speeds by 
1.50
deploying "LTE Advanced" 4G technology. This can significantly improve on the original 4G, meaning peak download speeds of 150 Mbit/s and beyond. Looking further forward, industry is also starting to develop new "5G" technologies. These are in early stages of development but will ultimately improve the capabilities of networks and offer a more seamless and responsive user experience. 
 
We also expect to see significant progress in the coming years on the deployment of 
1.51
"Internet of Things" (IoT) applications and services. This means applications and devices communicating with each other without human involvement. Existing examples include home management sensors, smart meters, vehicle traffic 
management and wearable technologies such as fitness bands. While connectivity demands for bandwidth will generally be low, reliability, privacy, ubiquity and other performance needs may not be met by existing access technologies and networks. It is possible that the IoT will ultimately require dedicated networks. We are in the 
process of consulting on the issue.12  

## Broadcast Infrastructure

 
There have been developments in the capacity of both traditional and the new 
1.52
broadcast infrastructure this year.  
- 
Traditional **linear** broadcasting. Two additional multiplexes have been made 
available on the digital terrestrial TV platform. As a result we have several new high definition (HD) channels (BBC News, BBC Four and CBeebies, 4Seven, Channel 4+1, Al Jazeera and Community) as well as others in standard definition. 
 
Despite the growth in online services, linear broadcasting remains the preferred way 
1.53
for most viewers to watch TV. There is a continuing shift towards higher definition 
formats, including '4K' as well as HD TV formats. These demand more capacity, though advances in digital video compression (such as the recently completed HEVC standard) will at least partially offset this. 
- 
New forms of broadcasting. The growth in IPTV is providing additional capacity 
for the delivery of on-demand and linear (i.e. scheduled) broadcast-quality streamed TV. For example, more than one in ten UK households now subscribe to Netflix. The growth in broadband data consumption, primarily driven by video, underlines the need for continued investment in new network capacity even as new compression techniques are introduced. 
 
For radio listeners, DAB services are available to more than nine in ten households. 
1.54
The BBC is set to expand its national DAB coverage to around 97% of UK households by March 2017.   

## Summary Of Key Policy Implications

 
The findings of this report raise a number of challenges which policy-makers will 
1.55
need to consider.  The key ones are set out in the table below. 

Ensuring 
inclusion 
through 
universal 
availability 
The current **Universal Service Commitment for broadband** was set 
by the Government in 2009. It is that every household should have 
access to a broadband speed of at least 2Mbit/s. The publicly funded deployment of superfast broadband roll-out might mean that speeds of above 30Mbit/s are eventually available universally, or near universally. If not, the evidence in this report suggests that more detailed work may be required on whether the basic commitment should be increased.  

Extending mobile coverage beyond current levels may require continued public policy intervention. The Government is currently investing £150m in new infrastructure to bring **mobile coverage** to unserved households. It is also considering other policy measures to increase coverage and address partial not-spots, with options including national roaming, passive infrastructure sharing and a multioperator MVNO. This is a matter of high priority for the Government and Ofcom is working closely with it and industry to improve coverage and to address partial not-spots in particular.  

Deployment of 
new 
technologies to 
the mass market  
To address the challenges of **superfast broadband roll-out**, various 
technological solutions already exist or are in development. At the 
same time, mobile operators are deploying 4G services, with one required to meet a coverage required of 98% of premises indoors. 
Others are planning to match this requirement. This will ultimately 
improve both voice and mobile broadband coverage. 
However, further deployment may require continued public intervention (for example, to get superfast broadband to the 'final 5%' 
and to improve SME coverage) or regulatory policy amendments (for 
example, changes to the Electronic Communication Code and planning rules). 
Understanding 
options and 
defining an 
ambition for 
future 
infrastructure 
investment  
Looking further ahead, there are numerous technological developments in progress that should help operators and the 
Government to extend, maintain and significantly improve fixed and mobile broadband speeds over time. These options should be 
considered thoroughly and quickly in order to understand the likely timescales of demand and supply, as well as the delivery models which will best deliver value for money. Many of these upgrades can 
be led by the market, building incrementally on investments already made in response to demand.  

## It Is Important For Policy To Consider All Drivers Of Quality Of Experience

 
When considering these challenges across all three stages of infrastructure policy, it 
1.56
is increasingly important to consider a range of factors beyond just speeds. Our 
analysis of **broadband quality of experience** suggests that broadband performance 
is influenced by a much wider set of issues than simply the speed of the access network. We will continue to support the development of new measurement approaches that better reflect the broadband consumer experience and the range of issues that affect it. 
 
To address the **consumer experience of mobile voice use**, Ofcom is carrying out 
1.57
further research to quantify the extent to which network capacity is affecting consumers. We will also consider whether more work is required to understand the 
quality of experience of the mobile internet, to complement our similar exercise 
on mobile voice calling.13  

## Availability Of Infrastructure For Both Consumer And Business Users Should Be Considered When Setting Policy

 
Further work is needed to understand the drivers and barriers of connectivity for 
1.58
SMEs. We will develop the specific analysis in this report to estimate the number of 
SMEs without superfast broadband coverage and with no other relatively low cost and high bandwidth options. Ofcom will consider the broader issues further as part of a SME publication alongside the Business Connectivity Market Review in spring 
2015.14  

## Fast Facts

Figures relate to June 2014. 

Fixed broadband 
Coverage of any broadband 
Near universal 
Take-up of broadband 
73% of premises 
Coverage of superfast broadband  
75% of premises  
Take-up of superfast broadband  
21% of premises 
Average broadband speed 
23Mbit/s 
Average monthly data throughput 
58GB per residential connection 
 
 
Mobile  
Mobile (2G) 
Premises (outdoor) covered by all operators 
97% of premises 
Premises (outdoor) not covered by any operator 
<1% of premises 
Geographic area covered by all operators 
68% of land area 
Geographic area not covered by any operator 
11% of land area 
Coverage of A and B roads by all operators 
84% of roads 
A and B roads not served by any operator 
3% of roads 
Mobile (3G) 
Premises (outdoor) covered by all operators 
84% of premises 
Premises (outdoor) not covered by any operator 
1% of premises 
Geographic area covered by all operators 
26% of land area 
Geographic area not covered by any operator 
22% of land area 
Coverage of A and B roads by all operators 
45% of roads 
A and B roads not served by any operator 
9% of roads 
Mobile (4G) 
Premises (outdoor) covered by Vodafone, O2 and EE 
35% of premises 
Premises (outdoor) not covered by any operator 
28% of premises 
Geographic area covered by Vodafone, O2 and EE 
5% of land area 
Geographic area not covered by any operator 
77% of land area 
Coverage of A and B roads by Vodafone, O2 and EE 
12% of roads 
A and B roads not served by any operator 
63% of roads 
Mobile (data use) 
 
Total number of active mobile connections 
83.2 million 
Total mobile data throughput 
44,300,000GB 
Average monthly data throughput 
0.53GB per SIM  

## Broadcast

Digital terrestrial television 
99% 
Households served by three multiplexes (public service broadcasting channels) 
90% 
Households served by six multiplexes (additional digital terrestrial television channels) 
76% 
Households served by seven multiplexes (all digital terrestrial television channels, including interim multiplex) 
Digital radio 
Households served by BBC national multiplex 
95% of households 
Households served by the national commercial multiplex 
90% of households 
 
 
Wi-Fi 
Number of public Wi-Fi hotspots 
41,798 
Total data uploaded/downloaded 
2,260,000GB in June 2014 
Average data throughput  
54GB per hotspot in June 2014 

## Section 2 2 Introduction And Background To The Report

 
This is Ofcom's second full Infrastructure Report, following our first report which was 
2.1
published in 2011.  
 
Under Section 134A of the Communications Act 2003 ('the Act') Ofcom is required to 
2.2
submit a report to the Secretary of State every three years, describing the state of the 
electronic communications networks and services in the UK. 
 
The Act sets out specific areas on which Ofcom must report. These are:  
2.3
- 
the coverage of networks and services, by geography and population;  
- 
the degree of infrastructure sharing and wholesale access on the networks;  
- 
the capacity of the networks and their availability; and  
- 
plans for resilience in relation to both networks and services.  
 
We are also required to report on the use of spectrum for wireless telegraphy in the 
2.4
UK and to compare the standard of UK networks and services with those in other 
countries. 
 
The report considers services provided to residential consumers and to businesses. 
2.5
We don't present statistics for large businesses, since the leased line infrastructure upon which they typically rely is widely available and services tend to be bespoke. We do present analysis for Small and Medium sized Enterprises (SMEs).  
 
Since the first Infrastructure Report, we have published update reports in 2012 and 
2.6
2013. These focused on the areas seeing the most rapid change, including the coverage of fixed, mobile and broadcast networks and the capacity of fixed and mobile broadband networks.  
 
This new report provides the first update for other topics, such as passive 
2.7
infrastructure sharing, wholesale network access, the use of spectrum and the capacity of fixed and mobile voice networks.  
 
We have excluded some information from the published version of the report, where 
2.8
we believe there would be grounds to refuse to disclose it in response to a request under the Freedom of Information Act 2000. Where we have redacted information from the report, we indicate it with this symbol: []. 

## Approach And Context

 
This report uses new data gathered from the largest operators in each sector, as well 
2.9
as information already held by Ofcom. Where possible we have reused data already provided to Ofcom, in order to minimise the burden on stakeholders.  
 
We have also used other reliable data sources, such as direct consumer research 
2.10
findings. Data sources and analysis methodologies are summarised in Annex 1. Where new information has been collected, it dates from June 2014. 
 
In the main, we have gathered data from the communications providers who make up 
2.11
a significant proportion of the residential consumer and small business market. This 
relates to fixed networks, mobile networks, public Wi-Fi and the main broadcast technologies: digital terrestrial television (DTT) and digital radio (DAB).  
 
For fixed networks, we present data from five networks making up over 80% of the 
2.12
market. For mobile networks and digital terrestrial broadcast networks, we gathered 
data from all the network operators.  

Name of provider 
Types of networks or service 
Arqiva 
Public Wi-Fi, national DTT and national DAB 
BBC 
National DTT and national DAB 
BT 
Fixed networks: voice and broadband, public Wi-Fi 
D3 and 4 
National DTT 
EE 
Mobile networks: voice and broadband, public Wi-Fi 
KCOM 
Fixed networks: voice and broadband, public Wi-Fi (Hull only) 
O2 Telefonica 
Mobile networks: voice and broadband, public Wi-Fi 
SDN 
National DTT 
Sky 
Fixed networks: voice and broadband, public Wi-Fi 
TalkTalk 
Fixed networks: voice and broadband 
Three 
Mobile networks: voice and broadband 
Virgin Media 
Fixed networks: voice and broadband, public Wi-Fi 
Vodafone 
Mobile networks: voice and broadband 

 
 
We also gathered data from a number of other smaller network and service providers 
2.13
for different aspects of the report. 

## Publication Of Data

 
Much of the data underlying this year's report is available for download at: 
2.14
http://infrastructure.ofcom.org.uk 
 
We have also created an online map and visualisation tool. This allows users to 
2.15
assess the coverage and performance of the infrastructure in their area and compare it to other areas.  
 
The tool is available at http://infrastructure.ofcom.org.uk.  
2.16

## Outline Of This Report

 
The remainder of the report is structured as follows: 
2.17
- 
Section 3: fixed broadband networks  
- 
Section 4: SME connectivity 
- 
Section 5: mobile networks and Wi-Fi 
- 
Section 6: broadcast networks 
- 
Section 7: security and resilience 
- 
Section 8: convergence and seamless connectivity 
- 
Section 9: internet networks  
 
We don't cover international comparisons in any detail because they are the subject 
2.18
of a separate piece of work:  Ofcom's *International Communications Market Report*. The latest edition is available at 
http://stakeholders.ofcom.org.uk/binaries/research/cmr/cmr13/icmr/ICMR_2013_final. pdf and the 2014 report will be published shortly. 

## 3 Fixed Broadband Networks Overview

 
In the space of just a few years, the availability of fixed broadband technology has 
3.1
transformed the way we use the internet. From playing a niche role in the early 2000s, broadband is now regarded as one of life's essentials by the vast majority of consumers and small businesses. At home, there are more ways than ever to access it; from laptops and desktops to smartphones and tablets over in-home Wi-Fi.    
- 
Increasing take-up of superfast broadband has driven an increase in average 
speeds (3.67 to 3.69). Household take-up of fixed broadband now stands at 73%, up 
from 72% last year. Take-up of superfast broadband is 22%. The increasing 
availability and take-up of superfast broadband has driven up the average broadband 
speed, which is now 23Mbit/s, up from 18Mbit/s last year. Speeds vary considerably from household to household, driven partly by availability and partly by the number of 
households that have decided to upgrade to superfast broadband.  
- 
The quality of broadband services varies significantly across the UK (3.70 to 
3.73). Although fixed broadband is now available to almost all UK premises, the 
technology and speeds available vary considerably. 97% of premises are able to 
access a basic broadband service, with download speeds of more than 2Mbit/s; 85% 
can access a standard service, with speeds of 10Mbit/s or more; and 75% can 
access superfast speeds of 30Mbit/s or more, due to the roll-out of fibre, and cable 
upgrades.  
- 
Superfast broadband coverage is significantly lower in rural areas, and there 
are also gaps in superfast coverage within cities (3.24 to 3.36). Only 22% of rural 
premises across the UK can access superfast broadband. However there are also 
gaps in some urban centres; this is due in part to technical challenges that require a different approach to superfast upgrades. The effect of these availability issues may 
have a disproportionate impact on SME customers and this is further analysed in 
section 4. Some gaps are being filled by providers other than the traditional networks, 
such as community broadband groups formed to provide coverage in a specific area. 
The aim of the Government's ongoing broadband roll-out intervention programme is 
to push broadband with speeds over 24Mbit/s15 to 95% of premises by 2017. It is 
also testing options to extend faster broadband coverage to 'the final 5%'.  
- 
Roadmaps are in place for future development, including 'ultrafast' broadband 
networks (3.42 to 3.65). There are several active technological developments which 
may extend coverage of superfast broadband, or maintain capacity when take-up 
increases, or increase the maximum speeds available, potentially far beyond current 
superfast levels. These fixed and wireless technologies provide an evolutionary path 
towards meeting future demand for 'ultrafast' broadband. More revolutionary options are also possible. 

- 
It may be time to review public policy around universal service (3.65 to 3.66). 
The current universal service commitment, set by the Government in 2009, specified 
that every household should have broadband access of at least 2Mbit/s.16  It may 
now be time to review that policy, as consumer expectations of broadband rise along 
with the availability and take-up of faster broadband. There is evidence that 
broadband of at least 10Mbit/s is required to support typical consumers' use. Below that speed, overall broadband performance is generally impaired. Indeed, use may 
be constrained for broadband below this threshold, because some applications will 
not work properly, if at all.  
- 
Upload speeds are also an important consideration (3.85 to 3.86). This is 
especially the case for services such as high quality video calling. The average 
upload speed in the UK is currently 3Mbit/s. 
- 
Access speed is not the only determinant of broadband performance (3.101 to 
3.115). The quality of the broadband experience is not solely dependent on the 
access speed as supplied; factors such as in-home wiring and peering arrangements 
between internet service providers can also be important. Indeed for connections 
with a download speed greater than 10Mbit/s, access speed appears to become less significant than these other factors. We are therefore developing new measurement 
approaches to take account of all the factors that can affect broadband performance.  
- 
Data use is increasing steadily (3.87 to 3.95). The UK is now using far more data, 
as users migrate to faster connections and access data-hungry applications such video streaming. All operators have seen an increase in the amount of data downloaded, with some variation between them. On average, there has been a 93% 
increase in the amount of data downloaded over the last year. 

## Coverage Of Broadband Services

 
This section considers fixed broadband networks that serve households and small 
3.2
commercial premises.17 Voice services provided over fixed networks (i.e. landlines) 
are covered in section 8. 
 
BT Openreach and Virgin Media are the two main operators in the UK, with Kingston 
3.3
Communications (KCOM) operating a network in Hull and surrounding areas. Openreach and KCOM together cover virtually the whole of the UK. Virgin Media has a separate cable network covering 44% of UK premises.  Broadband is therefore available to almost all UK premises.  
 
For residential and small commercial buildings, there are four main types of fixed 
3.4
network technology:   
- 
Asymmetric digital subscriber lines (ADSL) and ADSL2+. The most 
common way broadband is delivered in the UK is over copper telephone lines. These provide download speeds of up to 24Mbit/s, depending on the distance to the exchange and the capability of the equipment. 
- 
Hybrid fibre-coaxial (HFC) cable using DOCSIS standards. Broadband is 
also provided over networks originally deployed for cable television. A fibre-optic 
cable links the telephone exchange to the street cabinet. Coaxial cable connects 
the cabinet to the home. These networks deliver download speeds of up to 152Mbit/s, depending on the amount of cable capacity allocated to broadband (rather than TV) and the number of consumers using the shared link at the 
same time. 
- 
Fibre to the cabinet (FTTC). This is where fibre is laid between the exchange 
and the cabinet, where very high bit rate digital subscriber line (VDSL) systems 
are deployed. The maximum download speed at the moment is 76Mbit/s. 
However, this depends on the distance to the cabinet, since the cabinet-tohome connection still relies on the copper network.18 
- 
Fibre to the premises (FTTP). These networks rely entirely on fibre to connect 
the home or premises to the exchange, delivering very high speeds of up to 
1Gbit/s. 
 
Cable, FTTC and FTTP are collectively known as 'next generation access' (NGA) 
3.5
networks. The roll-out of NGA technologies has increased the availability of superfast 
broadband (SFBB), which is defined as having download speeds of at least 
30Mbit/s.19 Most, but not all, NGA lines provide superfast broadband. 

## Coverage Of Broadband Faster Than 2Mbit/S Has Reached 97%, And Coverage Of Broadband Faster Than 10Mbit/S Has Reached 85%

 
We estimate that 97% of UK premises can now receive a broadband connection of 
3.6
2Mbit/s or more - the target speed set in the Government's universal service 
commitment (USC). We also estimate that around 85% of premises can access 10Mbit/s or more. We discuss later in this section how 10Mbit/s is increasingly 
appearing to be the 'base standard' that a typical household needs.  

## Superfast Broadband Coverage Has Reached 75%

 
Superfast broadband is now available to 75% of UK premises, enabling these 
3.7
households to subscribe to services of at least 30Mbit/s. This coverage is also 
increasing, primarily due to the ongoing roll-out of BT Openreach's FTTC network. 
Coverage of the underlying NGA networks by the main network operators has now reached 78% of the UK in total.  
 
Figure 3 shows the degree of overlap between the NGA coverage of the Openreach 
3.8
and Virgin Media networks, with 35% of premises covered by both. 9% of premises can only access NGA services from Virgin Media, and 34% are only served by BT 
Openreach. Some smaller providers have also deployed NGA in specific areas, as 
described at 3.16. 
Source: Ofcom analysis of operator data 

 
Figure 3 shows the NGA and superfast broadband coverage services available in the 
3.9
different nations, from networks provided by Openreach, KCOM and Virgin Media. 
Northern Ireland still has the highest availability of NGA networks, having been first to 
begin significant roll-out in 2011 following early public-sector intervention. Scotland 
and Wales continue to have the lowest coverage, although they have seen the 
largest increases since last year.  

 
2014 SFBB 
2014 NGA 
2013 NGA 
UK 
75% 
78% 
73% 
England 
77% 
80% 
76% 
Scotland 
61% 
63% 
52% 
Wales 
55% 
58% 
48% 
NI 
77% 
94% 
96% 

 
Figure 4 shows that NGA technology does not deliver superfast speeds for all 
3.10
premises. This is primarily due to geography: Northern Ireland has a relatively large 
number of dispersed rural premises. Lines running between cabinets and premises 
are often long enough to impair performance, sometimes significantly. We discuss 
the issue of long lines on p.16. On average there is a 3% gap between NGA and 
superfast coverage. The difference is greatest in Northern Ireland. 
 
Note on methodology. We have refined the methodology for data collection and analysis, meaning that the NGA coverage we report here is not directly comparable with previous reports. There are two significant differences in our approach this year: 

a) Under our previous methodology, where we identified the presence of an NGA network in a 
postcode, we modelled that postcode as being fully covered. This year, we have collected more detailed information about the percentage of premises in each postcode with NGA 
access. This allows us to provide a more accurate estimate of NGA coverage across the UK. We estimate that last year's coverage figure would have been approximately 2% lower under our refined methodology. 
b) We make a clear distinction between NGA coverage and coverage of superfast broadband 
services. This is because some premises have been upgraded to FTTC (and are therefore within the NGA coverage footprint) but cannot receive superfast speeds. This is typically due to the distance between the cabinet and the premises. This is discussed further at 
below.  

## The Government Expects 95% Of The Uk To Have Access To Broadband Speeds Over 24Mbit/S By 2017

 
The Government has set a target that 95% of the UK should have access to speeds 
3.11
of over 24Mbit/s by 2017. The increase in superfast coverage has so far been largely 
driven by commercial roll-out, exceeding the original estimate that it would cover two 
thirds of premises. Commercial roll-out is continuing to some degree. At the same 
time, public funding has extended coverage to areas where commercial roll-out will 
not reach. We set out below a summary of the Government's programme of work, 
administered by Broadband Delivery UK (BDUK) on behalf of the Department for Culture, Media and Sport (DCMS). 

| Approach/target             | Status                     |
|-----------------------------|----------------------------|
|                             |                            |
| BDUK funding                |                            |
| (£m)                        |                            |
| 530                         | 90% coverage by early      |
| 2016                        |                            |
| Phase 1                     |                            |
| Rural Broadband             |                            |
| Programme                   |                            |
|                             |                            |
| 250                         | 95% coverage by 2017       |
| in South Yorkshire.         |                            |
| Phase 2                     |                            |
| Superfast                   |                            |
| Extension                   |                            |
| Programme                   |                            |
|                             |                            |
| Phase 3                     |                            |
| Competitive Fund            |                            |
|                             |                            |
| 10                          | Fund for pilot projects to |
| identify possible solutions |                            |
| to the 'final 5%'           |                            |
| Superconnected              |                            |
| Cities                      |                            |
|                             |                            |
| 150                         | Vouchers of up to £3000    |
| to help businesses with     |                            |
| cost of installing high-    |                            |
| speed broadband in 22       |                            |
| cities until March 2015     |                            |

 
In addition, £150m has also been allocated to improve the quality and coverage of 
3.12
mobile phone and basic data network services. Further detail is provided in section 5. 
 
Phases 1 and 2 of the scheme are based on a model in which the state pays the 
3.13
provider the difference between the commercial investment and the actual cost. BDUK funding is supplemented by local authorities and, in some cases, European 
funding. 
 
The roll-out part-funded by the BDUK programme is underway. Up to June 2014 - 
3.14
the month in which we collected data for this report - almost 900,000 premises had a superfast broadband service made available as a result of BDUK-supported projects. This represents around 9% of superfast broadband premises in the UK, and around 
3% of all UK broadband lines.20  Since then, roll-out has accelerated. In November 
2014 DCMS announced that more than 1.5 million premises could access superfast 
broadband as a result of BDUK-supported projects, and that it was reaching 40,000 
homes and businesses a week.21   
 
The devolved administrations in Northern Ireland, Scotland and Wales are 
3.15
responsible for national projects that use funding both from BDUK and other sources: 
                                               

November 2014: 1.5 million premises passed. All contracts awarded.  
Pilots under way. September 2014: around 3000 businesses have received grants.  

- 
In Northern Ireland, the Department of Enterprise, Trade and Investment (DETI) led the Next Generation Broadband project, which invested more than £52m in 
FTTC across the country. It was completed in 2011. DETI is now implementing the Broadband Improvement Project (BIP) to further extend basic and highspeed broadband services to around 45,000 premises across Northern Ireland (see 3.40). 
- 
In Wales, the Superfast Cymru project is a partnership between the Welsh 
Government and BT. It aims to achieve 96% coverage of fast fibre broadband in Wales by 2016. The majority of premises will be able to access broadband speeds in excess of 30Mbit/s, in some areas more than 100Mbit/s. The total 
investment in fibre broadband in Wales, including the Superfast Cymru programme and BT's commercial roll-out, is around £425m. More than 275,000 
premises can now access superfast broadband as a result.22   
- 
In Scotland, the Digital Scotland superfast broadband initiative comprises two 
projects: one for the Highlands and Islands area and the other for the rest of Scotland. Its aim is for 95% of premises in Scotland (750,000 homes and businesses) to be covered by fibre broadband infrastructure by the end of 2017. Its funding partners include the Scottish Government, Highlands and Islands Enterprise, the UK Government through BDUK, local authorities, the European Development Fund and BT. The Digital Scotland roll-out has now reached more than 150,000 homes and businesses across the country, including 30,000 in the 
Highlands and Islands.23 By October 2014, ten of the programme's 20 sub-sea 
fibre optic cables had been laid, connecting island communities.  

## Smaller Providers Are Also Offering Nga Services

 
Openreach, Virgin Media and KCOM are not the only providers of NGA infrastructure 
3.16
in the UK. A number of other networks providers are also rolling out their own networks to provide broadband or superfast broadband services with smaller network footprints, usually where Openreach and Virgin Media's NGA networks are not 
present. 
 
Figure 7 below gives examples of these types of deployment.  
3.17

## Type Of Deployment Examples (Not Exhaustive)

Commercial NGA networks 
Cityfibre: wholesale provider of fibre infrastructure including joint venture announced with Sky and TalkTalk to roll out FTTP in York. See case study below. Hyperoptic: FTTB (fibre to the building) to blocks of flats in cities including London, Cardiff, Reading, Bristol, Manchester, Liverpool and Leeds. 
Gigaclear: FTTP to rural villages. 
Commercial satellite 
networks 
Satellite broadband: commercial satellite service providing 
up to 20Mbit/s broadband. 
Commercial wireless 
networks 
Call Flow: Call Flow offers radio links delivering bandwidth 
from 2Mbit/s to 100Mbit/s+, in addition to ADSL and fibre options. 
Community NGA networks 
Cybermoor and fibre broadband in Alston Moor, Cumbria. B4RN: FTTP in the rural north west 
Shetland Telecom: wireless broadband around Lerwick. 

## Network Technologies Used By Non-Major Nga Providers

 
Fixed access technologies such as FTTP are generally used where premises are 
3.18
sufficiently close together, such as new-build apartments or a cluster of houses in a 
small community. They provide networks that are capable of delivering reliable 
superfast broadband speeds of up to 1Gbit/s depending on the network technology used.  
 
Wireless or satellite solutions can also be used to provide connectivity to premises 
3.19
which are further apart. Customers on these networks will share the available bandwidth. This means that they are less likely to achieve superfast speeds.  
 
As these wireless networks do not require a fixed connection at the premises, it is 
3.20
harder to form a definitive understanding of the coverage of these networks. Satellite 
broadband provides coverage to almost all of the UK as it can serve any premises 
within the satellite footprint. In reality, satellite broadband would have capacity constraints if demand became extremely high. The latency of the connection to the 
satellite means a fast response time isn't possible, and for many this means satellite 
broadband is most suitable where there are no other networks available.  

## Coverage And Take-Up Of Services

 
Recognising the important role played by non-major network providers, Ofcom 
3.21
commissioned Prism Business Consulting to review the market for non-major NGA 
broadband.24  Prism estimated that non-major networks, in aggregate, provide 
coverage to around 1% of UK households.25 The report indicated that 70% of these 
schemes are in rural areas (mainly rural remote), while 30% are in urban areas.  
 
Prism reported that community schemes tended to have relatively high levels of take-
3.22
up. This is not surprising, for several reasons. Some schemes offer incentives to 
community groups to support roll-out. For example, Broadband for the Rural North 
(B4RN) offers shares to volunteers who help to build the network.26 This also raises 
awareness of the network among the local community. Prism reported that 
community-led schemes are usually motivated by existing poor connectivity; the 
users therefore have an even greater incentive to take up these schemes' services. Some non-major commercial providers also reported high take-up. These are mainly providers supplying fibre broadband to new-build developments, where no other fixed-line providers are available.  

## Case Study: Cityfibre

CityFibre plans to become the largest independent provider of fibre-optic infrastructure to mid-sized cities and major towns. It owns and operates urban fibre-optic networks, using a shared passive infrastructure model. As a wholesale operator, CityFibre does not provide services in its downstream market. So far, the company has launched four 'Gigabit City' projects: in York, Peterborough, Coventry and Aberdeen. CityFibre is actively engaged with many cities that seek better digital infrastructure, and aims to cover around 25 Gigabit Cities; a footprint that it says would address around 15% of the UK urban population.  

## York

Based on its initial commitment to connect 105 local authority sites to its passive infrastructure, CityFibre invested in 95 km of new network construction. Since the completion of the initial build, CityFibre reports that it has more than doubled the number of sites connected to the network, covering public sector, businesses, CCTV and wireless applications. The York network now stands at around 120 km, with further expansion planned. CityFibre is using this fibre infrastructure to deploy widespread FTTH that will extend the fibre network to the residential market. This is being undertaken by a joint venture between CityFibre, Sky and TalkTalk. The first phase of construction is currently under way, and CityFibre reports that it will connect tens of thousands of homes and businesses. The first customers benefiting from 1Gbit/s ultrafast broadband are expected to be connected in summer 2015. 

## Other 'Gigabit Cities'

CityFibre is also deploying Gigabit City projects in Peterborough, Coventry and Aberdeen. It will expand its private-investment 'anchor tenant' methods to include demand aggregation from business ISPs (in Aberdeen) or via network acquisition (in Coventry). In all its Gigabit City projects, CityFibre engages with the business community through its 'Gig-Up' campaigns. It reports that in six months, 'Gig-Up Peterborough' attracted around 25% of local businesses, which registered their intent to connect to CityFibre's infrastructure, thereby helping to accelerate network roll-out.  

## There Are Challenges To Overcome In Order To Move Towards Nearuniversal Coverage Of Superfast Broadband

 
A range of infrastructure providers will play in part in extending superfast broadband 
3.23
to reach near-universal coverage. In general, the most effective and efficient way to 
provide superfast broadband on the BT Openreach network is to upgrade existing 
cabinets to fibre. This is feasible for most of the 95% of UK premises that are 
covered under the existing BDUK programme. 
 
However, there are still challenges facing the government, Ofcom and industry if 
3.24
near-universal coverage is to be achieved. The three main challenges, and the potential solutions, either existing or under development, are described below. 

## 1. Extending Infrastructure Capable Of Delivering Superfast Speeds To  The Most Rural Areas

 
This challenge relates to premises that are not covered in current roll-out plans - 
3.25
referred to as the 'final 5%' beyond the 95% Government target. They are mostly in 
very rural areas, and there is probably a limit to what can be achieved by conventional large-scale network infrastructure such as fibre networks. In these rural 
areas, premises are further apart and the costs of roll-out are shared between fewer 
users. Therefore, more efficient and cost-effective solutions are needed.  
 
In June 2014, the Government announced eight pilot trials to test alternative 
3.26
approaches, backed by a £10m fund.27  These are discussed at 3.42. The pilots will 
test a variety of technologies, which fall into two main categories: 
- 
Satellite. The latest solutions (using Ka-band VSAT) appear to offer superfast 
speeds of over 30Mbit/s downstream. However, overall capacity and latency constraints mean that this may only be suitable to serve a subset of the 'final 5%'. 
- 
Fixed wireless access. Fixed wireless has the advantages of low cost-of-entry 
and flexibility. Options range from conventional Wi-Fi and WIMAX28, based on 
sub-licensed spectrum (e.g. UK Broadband), to LTE and white space 
approaches.   
 
The Welsh Government is seeking bids to extend access to premises not covered by 
3.27
either the private sector commercial roll-out or the Superfast Cymru project. 
Procurement for this infill project is under way. In parallel, the Access Broadband Cymru scheme provides grants of up to £900 to the occupants of premises unable to receive broadband services of 2Mbit/s and above. The money can be used to fund up to 90% of the cost of installing alternative technology; for example, wireless and 
satellite, on the condition that it will deliver speeds of at least 24Mbit/s.  
 
Some rural areas will receive fibre coverage from non-BDUK projects such as the 
3.28
community broadband schemes described above. 

## 2. Closing Gaps In Coverage In Urban Centres

 
Coverage of high-speed broadband is generally high in urban areas. However, there 
3.29
are some parts of cities that are not yet covered. We published a report on the availability of communications services in UK cities ('the Cities Report') in June 2014. 
It showed that there were significant gaps and variations in the availability of 
superfast broadband services in a selection of 11 UK cities in 2013.29 Figure 8 shows 
the 2014 coverage of NGA in these cities.   
 
Figure 8 shows that NGA coverage has increased in most of the cities since 2013, 
3.30
with particular progress in Glasgow and Inverness. This shows the impact of the extension of the BT Openreach network in these cities. Inverness benefited from investment in broadband across the Scottish Highlands and Islands, led by the Highlands and Islands Enterprise (HIE).  
 
However, some urban gaps remain. This may be due to a range of factors. Technical 
3.31
difficulties in deploying FTTC may be significant in some locations. Some inner city areas have a high number of 'exchange-only lines' (EOLs) where there is no cabinet 
between the premises and the exchange. Premises served by EOLs cannot be upgraded to FTTC because of the absence of cabinets to upgrade to fibre, and 
because VDSL equipment cannot be co-located with ADSL equipment. Openreach is 
therefore exploring two main options to upgrade these lines. First, inserting a cabinet 
between the premises and the exchange, and second, developing new technology 
deployment options such as fibre to the remote node (FTTRN) - see below. 
 
Overall, 64% of EOLs are in urban areas. The availability of NGA in postcodes with 
3.32
EOLs is 48%; significantly lower than the average 85% in urban areas. Figure 9 
shows that NGA coverage is particularly low in four inner-London boroughs: the City 
of London, Westminster, Tower Hamlets and Southwark. Low coverage relates to the high number of EOLs in these boroughs and limited cable roll-out. The problem is pronounced in the City of London, due to the lack of street cabinets. The City of 
London Corporation is therefore exploring options to extend coverage, including trials with BT and mobile broadband solutions.  

% postcodes with at least one 
2014 NGA coverage 
EOL 
 
City of London 
0.4% 
91% 
Westminster 
47% 
31% 
Tower Hamlets 
59% 
31% 
Southwark 
74% 
40% 
 

 
Other cities are also affected by EOLs. For example, 23% of postcodes in Glasgow 
3.33
and 17% of postcodes in Inverness have EOLs. In line with the pattern we see in London, EOLs are often particularly concentrated in the areas affected, resulting in marked variations in superfast coverage within cities.  
 
However, the absence of FTTC does not necessarily mean that consumers are 
3.34
unable to access superfast broadband. Some consumers who are served by EOLs 
from Openreach can already access superfast services from alternative providers with different technical solutions. These include cable, and services delivered using 
4G or fixed-wireless broadband. 
 
Virgin has announced that it is extending its cable network. This will deliver up to 
3.35
152Mbit/s connections in east London (100,000 homes), Glasgow (5000 homes) and Teesside (5000 homes in Hartlepool, Darlington, Sunderland and Stockton-on-
Tees).30 
more-glasgow-homes 

## 3. Ensuring Premises At The End Of Long Lines Can Achieve Superfast Speeds

 
This challenge relates to premises that cannot get download speeds of 30Mbit/s or 
3.36
above, even though they are served by cabinets that have been upgraded to fibre. 
VDSL speeds degrade over the copper lines between the cabinet and the premises. When lines are very long, speeds can drop below superfast levels. However, this does not happen over the hybrid fibre-coaxial cable used by Virgin Media. 
 
The distance between a premises and the cabinet for FTTC connections has a large 
3.37
impact on the speeds available. For example, BT sets its download speed caps for its two Infinity products at 38Mbit/s and 76Mbit/s respectively. Up to 500m away from the cabinet, these speeds can be achieved, but when premises are between 500m 
and 1km from the cabinet, speeds decrease significantly. Beyond 1km, it is unlikely 
that superfast speeds will be achieved with an FTTC connection using the current BT VDSL implementation.  
 
This is mainly a problem in rural rather than urban areas. Although 33% of premises 
3.38
in rural areas are covered by NGA, only 22% are covered by superfast broadband. This is because distances between premises and cabinets are often greater in these areas. By contrast, 85% of premises in urban areas are covered by NGA, and 83% are covered by superfast broadband. 
 
The difference between NGA coverage and SFBB coverage is currently greatest in 
3.39
rural parts of Northern Ireland, as illustrated by Figure 11. Fifty per cent of Northern 
Ireland's 246,000 rural premises (123,000) have access to NGA technology but cannot receive superfast broadband from it. A further 225,000 rural premises across England, Scotland and Wales also suffer from this problem. The difference between 
NGA and SFBB coverage may increase for the other nations, as NGA extends into 
the most rural areas, where the problem of long lines is more common.  
 
The Broadband Improvement Project (BIP) in Northern Ireland will install new 
3.40
cabinets in rural areas. This will reduce the length of copper lines to premises, 
enabling more premises to benefit from superfast speeds. The £23.7m project is 
being delivered by BT Ireland in eight phases, using a planning model taking account 
of local demographics, geography, planning requirements, existing infrastructure and 
the availability of suitable technologies.31 The technology will be deployed on a 
value-for-money basis, to deliver best coverage to the maximum number of 
beneficiaries. BIP is scheduled to conclude by December 2015, by which point DETI estimates that 96% of premises in Northern Ireland will be able to access basic fixedline broadband of at least 2Mbit/s, and 85% of premises will be served by at least 
24Mbit/s.32 

## Road-Maps For Future Broadband Developments

 
We have outlined above that there are three main challenges in broadband roll-out: 
3.41
gaps in rural coverage; gaps in urban coverage; and providing superfast speeds to premises where normal FTTC roll-out is ineffective (typically because of long lines to premises). Looking further ahead, there may come a time when most consumers 
look for speeds greater than superfast. We have already seen commercial moves towards deploying fibre that is capable of delivering gigabit speeds to household 
premises. As the market develops, the government and industry will want to monitor 
technological options for moving to these 'ultrafast' broadband speeds.  

## Technical Developments To Address Gaps In Rural And Urban Superfast Broadband Coverage

 
BDUK will pilot satellite and fixed-wireless solutions in the most rural areas. In June 
3.42
2014, the Government announced eight pilot trials which will test alternative approaches to deploying superfast services to the most rural areas, supported by a 
£10m fund.33  This will involve further development of the satellite and fixed-wireless 
solutions currently being trialled in the BDUK 'final 5%' pilots. Figure 12 summarises these pilots. 

| Approach                              | Operator    |
|---------------------------------------|-------------|
|                                       |             |
| Pilot area                            |             |
|                                       |             |
| Solution                              |             |
|                                       |             |
| Wireless                              | AB Internet |
|                                       |             |
| Wales                                 |             |
|                                       |             |
| Hybrid fixed line/wireless network to |             |
| deliver speeds up to 50Mbit/s         |             |
|                                       |             |
| Wireless                              | Airwave     |
|                                       |             |
| North Yorkshire                       |             |
|                                       |             |
| Deployment of multiple wireless       |             |
| solutions: Wi-Fi at 2.4GHz, point-to- |             |
| multipoint broadband fixed wireless   |             |
| at 2.4GHz or 5.8GHz, LTE small        |             |
| cells and TV white space              |             |
|                                       |             |
| Wireless                              | Quickline   |
|                                       |             |
| North                                 |             |
| Lincolnshire                          |             |
|                                       |             |
| Satellite                             | Avanti      |
|                                       |             |
| Northern                              |             |
| Ireland and                           |             |
| Scotland                              |             |
|                                       |             |
| Satellite                             | Satellite   |
| Internet                              |             |
|                                       |             |
| Devon and                             |             |
| Somerset                              |             |
|                                       |             |
| Call Flow                             |             |
|                                       |             |
| Hampshire                             |             |
|                                       |             |
| Range of access technologies          |             |
|                                       |             |
| Fibre,                                |             |
| Fixed                                 |             |
| Wireless,                             |             |
| SLU                                   |             |
| Financial                             |             |
| Model                                 |             |
| Cybermoor                             |             |
|                                       |             |
| Northumberland                        |             |
|                                       |             |
| Social investment for FTTP and        |             |
| wireless network roll-out             |             |
|                                       |             |
| Operating                             |             |
| Model                                 |             |
| MLL                                   |             |
|                                       |             |
| Kent                                  |             |
|                                       |             |
| Creating a wholesale OSS/BSS          |             |
| platform to aggregate rural wireless  |             |
| networks.                             |             |
|                                       |             |

  
 
Solutions such as these are already available for consumers to buy on the open 
3.43
market, but the cost can be prohibitive. It is possible that some form of public subsidy will be required, and joint public-private funding models are being considered. Timelines for roll-out are not yet known. 

                                               
Line of sight, near-line of sight and non-line of sight technologies, with a BDUK voucher scheme to 
encourage take-up 
Superfast satellite broadband using 
Ka-band satellite to deliver 30Mbit/s 
Using Ka-band satellite as backhaul 
to local wireless networks 

 
Fibre to the remote node (FTTRN)34. FTTRN is a deployment approach which 
3.44
brings the fibre network closer to the premises. The fibre line is deployed to a manhole or telegraph pole - i.e. a 'remote node' - nearer to the premises. This 
reduces the length of copper between the premises and the fibre network. It can 
provide superfast broadband to premises that are too far from existing cabinets, and to those connected directly to an exchange. FTTRN could use conventional VDSL technologies (which are currently used for FTTC deployments) or new 'G.Fast' 
technology (which we discuss further below). FTTRN deployments should help to extend the roll-out of superfast broadband services in both rural and urban areas.  
 
BT is trialling FTTRN in a range of locations including North Yorkshire, and 
3.45
Shoreditch and Rotherhithe in London.35 One of the challenges in rolling it out is 
providing sufficient power to this equipment. In BT's current trials, power is provided through separate cables. However, in the future spare copper pairs from the exchange could be used. 'Reverse powering' should also be possible, where the 
power is drawn from the premises it serves.    

## Technical Improvements To Maintain The Capabilities Of Networks As Take-Up Increases

 
Superfast broadband networks are built to deliver high speeds while assuming a 
3.46
certain level of take-up. As take-up increases, new technologies should help to 
maintain the capabilities of existing networks so that consumers do not experience degraded quality and speeds.  
 
Vectoring. This is a technique used to reduce 'noise' on a line and thereby improve 
3.47
speeds. It will help to ensure that customers who currently have superfast broadband through FTTC maintain superfast speeds as take-up increases. Without vectoring, 
increasing cross-talk between adjacent copper lines could cause interference and, in some cases, reduce speeds by more than 50%. Openreach has been trialling 
vectoring technology in Braintree and Barnet since 2013.36  
 
However, vectoring will not increase the speed of broadband for those premises that 
3.48
cannot currently access superfast speeds. Nor will it be suitable for all areas; this is 
because all copper lines from a cabinet need to be controlled and vectored by the 
same system to achieve the greatest improvement in speeds.  
 
If only some of the lines are managed, the presence of the unmanaged lines 
3.49
(sometimes called 'alien' lines) can degrade performance. Therefore, vectoring may not be suitable where there is more than one provider at a cabinet - as happens 
when an alternative broadband operator is using sub-loop unbundling (SLU)37 to 
control its customers' lines.  
 
In its *Fixed Access Market Review*38 (FAMR) Ofcom said that BT and the SLU 
3.50
operators should co-operate where either, or both, providers wished to roll out 
vectoring at a shared cabinet. This should be done so that vectoring by one or both parties can be implemented in the best possible way. However, as we note in our 
FAMR, there has been limited adoption of SLU in the UK to date. 
 
Cable technologies. There are various developments which may increase Virgin 
3.51
Media's cable broadband speeds. Cable networks use a hybrid fibre-coaxial link, 
which means that line length is not an issue, unlike in the Openreach network. However, the architecture of cable networks means that a number of premises share the same access connection. A customer could find the available bandwidth limited by the data usage of others on the same access network.  
 
Virgin Media has good control of the downstream and upstream speeds available to 
3.52
an end-user, which is mostly limited by the bandwidth it reserves for data services. 
Alongside broadband services, the connection is also used to carry cable television services.  
 
However, as demand grows for download speeds and data, the cable network 
3.53
infrastructure will need upgrades to maintain sufficient capacity. Recognising this, 
Ofcom commissioned a report on likely developments 39: 
- 
Node splitting. This reduces the number of premises connected to a node, in 
order to increase the proportion of shared bandwidth to each home.  
- 
Improved spectrum use. This involves bonding multiple frequency channels to 
increase the bandwidth available for downstream capacity, increasing the range of spectrum allocated for broadband and reallocating spectrum currently reserved for other uses.  
- 
Other technology developments.  Virgin Media currently uses DOCSIS 3.0, 
but a new standard, DOCSIS 3.1, was agreed in October 2013. This introduces better modulation technologies that could boost efficiency by up to 40%.  
 
We expect these improvements to take place gradually, both in terms of upgrading 
3.54
the equipment in the network as well as redesigning the network architecture. 
DOCSIS 3.1 is backwards-compatible with DOCSIS 3.0, so these upgrades can take place wherever additional capacity is required in the network.  

## Technologies To Achieve Higher Speeds

 
At some point, users may start to demand broadband speeds that NGA technologies 
3.55
typically can't deliver. There are a number of technical possibilities:  
 
Cable upgrades. Within the cable network, it may be possible to extend the use of 
3.56
fibre technology closer to premises, and further increase the bandwidth available to end-users. New transmission techniques such as radio frequency over glass (RFoG) 
could then be used to exploit the increased bandwidth available. This would transform the speeds available to consumers, moving them well into the ultrafast range. 
 
G.Fast. G.Fast is a broadband transmission standard that further increases the 
3.57
access speeds possible on copper lines. It increases the range of frequencies used to support broadband services, and download speeds of 800Mbit/s can be achieved. 
However, G.Fast has the limitation of only functioning over short lengths of copper 
line. It is typically deployed alongside FTTRN, which often reduces copper line 
lengths to within the usable range. BT has recently announced plans to test G.Fast.40 
 
Fibre to the premises (FTTP). FTTP deploys fibre from the local exchange directly 
3.58
to the home. Fibre can support much higher bandwidths than copper-based 
technologies, and it is not limited by distance41, so the speeds offered by this 
technology are appreciably higher.  
 
The deployment of FTTP is not simple, with a range of technology uncertainties 
3.59
remaining. In relation to traditional telecommunications networks, such as those operated in the UK by BT and Kingston Communications, there are two main 
technology options: passive optical networks (PON) and point-to-point fibre: 
- 
PONs remove the need for active electronics in the access network, thereby reducing operational complexity and power consumption. However, they are 
fundamentally 'shared' among a number of end-users, so maximum speeds may be limited.  
- 
Point-to-point network architectures offer dedicated connections and potentially 
higher speeds as a result. However, they require active electronics in the access network and more fibre, increasing the overall cost.  
 
These technologies are being developed and standardised, which could lead to 
3.60
further bandwidth increases. For example, using separate wavelengths (colours) of light over an existing PON to address a small number of, or even individual, endusers could offer very high bandwidths.42 This type of innovation, although potentially 
some years away, could open up the possibility of more differentiated competition over a fibre-optic network. 
 
Although BT's initial ambition for FTTP was that it would constitute up to 25% of NGA 
3.61
deployments43, this has not occurred in practice. This is likely to be due to the lower 
costs and faster installation associated with FTTC deployments. Openreach 
deployments of FTTP can provide download speeds of up to 330Mbit/s and upload 
speeds of up to 30Mbit/s, based on using a PON technology known as G.PON44. In 
November 2014, BT reported that FTTP was available to 160,000 homes and 
businesses.45  By contrast, 90% of KCOM's network uses FTTP, also based on 
G.PON technology offering download speeds of 100Mbit/s and upload speeds of 
15Mbit/s.46 Cityfibre and other smaller providers are also deploying FTTP to deliver 
very high speeds of around one Gigabit, based on either G.PON or the more 'fibre rich' Point to Point approach. 

 
5G In addition to providing potentially improved mobile performance, 5G technology 
3.62
may also open up new wireless access network solutions for providing ultrafast broadband connectivity to homes and business as an alternative to FTTRN or fibre to 
the premises solutions. The aims of the initial research now underway include the capability of completely supplanting any final fixed connection to user devices for even ultrafast requirements, with very high densities of small cells and much higher spectral efficiency. 

## Backhaul Technologies

 
Advances in access technologies generally lead to increases in headline connection 
3.63
speeds between the end-user and the local exchange (or cable head-end). However, 
in order to exploit fully the higher bandwidths available, other parts of the network 
may need to be upgraded. One of the most important parts is the backhaul section, 
which links the local exchange to an ISP's core network. 
 
The advances in optical fibre transmission now allow transmission speeds over a 
3.64
single fibre to exceed thousands of Gbit/s: Tbit/s (Terabits per second).47 These 
advances should allow the backhaul and core networks to keep pace with the bandwidth demands anticipated, due to the increased consumption of video content over the internet. 

## Universal Service Commitment In Broadband There May Be A Case To Review The Current Universal Service Commitment, Set By The Government In 2009

 
The current universal service commitment is that every household should have 
3.65
access to broadband speeds of at least 2Mbit/s. This was set in 2009 and may now 
be insufficient. The current superfast broadband roll-out may result in speeds of 
above 30Mbit/s becoming available universally, or near-universally. If this does not 
happen, evidence in this report suggests that we may need a more detailed study on 
whether the basic USC should be increased. This includes evidence that: 
- 
simultaneous, multi-person use of common applications will often require a 
speed well above 2Mbit/s - see Figure 30; 
- 
consumers with a lower broadband connection speed, particularly those with below 2Mbit/s, generally have a lower quality of experience than users with higher speeds - see Figure 32; and  
- 
there is suppressed demand at speeds below 10Mbit/s - see Figure 28.  
 
There is international precedent of reviewing universal service arrangements over 
3.66
time. In the US, for example, the Federal Communications Committee has proposed changing the broadband performance standard from 4Mbit/s to 10Mbit/s for operators receiving Universal Service funding. 

## Broadband Take-Up And Speeds Take-Up Has Increased

 
Take-up of fixed broadband has increased in the UK as a whole. In 2014, 73% of 
3.67
residential premises have a fixed broadband connection, compared to 72% in 2013. 
Scotland and Wales, in particular, have seen significant increases in broadband takeup. 

 
2014 
 
UK 
73% 
72% 
England 
73% 
73% 
Scotland 
73% 
67% 
Wales 
69% 
63% 
Northern Ireland 
70% 
71% 

Source: Ofcom, Communications Market Report 2013 and 2014 

 
There has been a more substantial increase in the number of premises taking 
3.68
superfast broadband, with penetration of 21% of UK premises (2013: 16%). 
Increases in take-up have been seen across the country, with Wales accounting for the greatest rise. 

 
2014 
 
UK 
21% 
16% 
England 
22% 
16% 
Scotland 
16% 
13% 
Wales 
13% 
9% 
Northern Ireland 
22% 
19% 

Source: Ofcom analysis of operator data 

## Average Broadband Speeds Have Increased

 
Average download speeds have increased by 36% across the UK over the past year, 
3.69
driven by the increased take-up of superfast broadband. In England and Scotland 
average speeds increased from below 20Mbit/s, to 23.9Mbit/s and 21.1Mbit/s 
respectively. Average speeds in Wales continue to improve, reaching 18.0Mbit/s this year. In Northern Ireland, despite a smaller increase in superfast broadband take-up this year, average speeds still increased by over 4Mbit/s. 

 
2013 
 
 
2013 
 
2014 
 
 
UK 
23.4 
17.6 
12.7 
 
England 
23.9 
18.0 
12.9 
 
Scotland 
21.1 
15.8 
12.1 
 
Wales 
18.0 
13.2 
9.9 
 
Northern Ireland 
24.8 
20.4 
14.4 
 

Source: Ofcom analysis of operator data 

## Measuring Broadband Connection Speeds

Ofcom currently uses two approaches for measuring broadband connection speeds. Both are useful in different contexts: 
1) Sync speed of consumers' broadband modems. This is the maximum connection speed achievable between the consumer's ISP's access network and the premises. The sync speed measurements provide the best overall picture of access network performance. 2) Line speed of the connection. This is the usable broadband connection speed provided by an ISP at different times of the day. Line speed measurements are made using a method developed by SamKnows. Here, dedicated measurement equipment is provided to a relatively small, but representative, sample of UK households. Test data are sent between this equipment and a dedicated server connected to the ISP's core network. The speed at which the test data can be sent is used to measure the household's broadband connection speed. The measured speeds typically vary throughout the day depending on the level of congestion in the ISP's network. Line speed measurements are typically a few Mbit/s lower than sync speed measurements. The measurements provide the best current measure of end-to-end performance from a consumer perspective. Actual Experience's report on broadband performance evaluation provides more information on how we are now developing new ways of measuring broadband quality.48 

## Increasing Average Broadband Speeds Mask Significant Variations

 
Figure 16 shows take-up of broadband by groups of speeds. It shows that there is 
3.70
considerable variation in the speeds received by consumers.  

| 2013    |
|---------|
|         |

 
A significant minority of broadband connections are achieving speeds of less than 
3.71
10Mbit/s, with 4% of households in the UK on connections of less than 2Mbit/s. We 
discuss these thresholds on page 42 below. 
 
This speed distribution is driven partly by coverage and partly by take-up.  About two 
3.72
thirds of those premises with speeds of less than 10Mbit/s could choose to upgrade 
to superfast broadband; there is coverage in their areas. However, 27% of UK 
premises do not yet have superfast broadband coverage. 

## The Number Of Connections Receiving Less Than 2Mbit/S Continues To Fall

 
Percentage of premises 
receiving less than 2Mbit/s 
 
June 2014 
June 2013 
UK 
4% 
6% 
England 
4% 
5% 
Scotland 
4% 
5% 
Wales 
6% 
7% 
NI 
7% 
9% 

Source: Ofcom analysis of operator data 

 
Figure 17 shows that the proportion of connections receiving less than 2Mbit/s is 
3.73
gradually falling. As discussed above, around half of those currently on less than 
2Mbit/s could choose to upgrade to superfast broadband.  

## On Average, Rural Areas Have Lower Speeds

 
Rural areas typically have lower broadband speeds, and this is true across the UK, 
3.74
as Figure 18 below shows. Broadband connections in rural areas of Northern Ireland 
are fastest, at 16Mbit/s on average. This is more than twice the average speed in rural Wales and rural Scotland. This is due to higher NGA coverage and take-up, 
discussed at 3.39 above. 
 
This difference between urban and rural broadband speeds can also be seen in the 
3.75
figure below, which shows the distribution of broadband speeds for each category of population density. 
 
Only 20% of rural connections are faster than 10Mbit/s on average. This compares 
3.76
with 70% of urban connections, 65% of semi-urban connections and 60% of the UK 
as a whole. 
 
Rural speeds are more likely to be slower, on average, than urban connections on 
3.77
average because:  
- 
there is less superfast broadband in rural areas. We expect this to change as 
BDUK's rural broadband programme progresses; and 
- 
rural premises are more likely than urban connections to be further away from 
cabinets, with long copper lines, leading to slower performance.  

## Broadband Speeds Are Restricted By The Limits Of The Technology Used

Source: Ofcom analysis of operator data  

 
The chart above shows the distribution of all connections by technology in June 
3.78
2014. 
 
Average broadband speeds are restricted by the limits of the technology used. Figure 
3.79
20 above shows that ADSL 2 connections can achieve up to 24Mbit/s, while ADSL connections reach a maximum of 8Mbit/s. 
 
Cable provides connections with no variability in the delivered modem sync speeds. 
3.80
The large differences in the distribution of speeds are due to the different cable 
packages in use by customers, including legacy packages. Over 80% of cable 
connections are superfast, with 18% delivering over 80Mbit/s, and some customers 
have download speeds of up to 152Mbit/s.50 
 
12% of FTTC connections are not superfast. Figure 21 shows the speed distribution 
3.81
for the FTTC lines that do not deliver superfast speeds. Around 4% of these lines do 
not provide 2Mbit/s speeds and 15% of these lines deliver speeds under 10Mbit/s.  
 
BT's FTTC service has two possible headline speeds depending on choice of 
3.82
package: 38Mbit/s (using VDSL technology) and 76Mbit/s (using VDSL 2 technology).  Approximately 39% of connections don't achieve these headline speeds in reality. Figure 22 below shows the distribution of FTTC connections. Those with speeds of less than 38Mbit/s (20% of connections) and those with speeds of between 40 and 76Mbit/s (19% of connections) will have been affected by some level of speed degradation. The remaining 61% of connections are more likely to be 
achieving their advertised headline speed.51 

| Average modem sync speed,    |
|------------------------------|
| Mbit/s                       |
|                              |
| connections                  |
|                              |
20% 19% 

                                               
 
51 The 47% of connections with speeds between 38 and 40Mbit/s may include some connections with 

## Despite Growth In Superfast, Most Uk Broadband Connections Are Still 'Currentgeneration'

 
The figure below shows that the majority (59%) of connections in the UK are ADSL2 
3.83
or ADSL2+, despite NGA coverage of 78% nationally. Seven per cent of UK 
broadband connections are still operating on the most basic ADSL technology; 22% 
are on Virgin Media DOCSIS, 12% on FTTC and 0.1% on FTTP. 

## Nga Technologies Deliver Greater Line Speed Stability

 
Figure 24  shows that those who have migrated onto newer technologies experience 
3.84
a higher level of line stability. This is because the fibre infrastructure supports more 
consistent delivery of speeds than the copper used for first-generation connections. 

## Upload Speeds

 
Upload speed can be crucially important for some services. High-quality video 
3.85
calling, for example, requires equally fast download and upload speeds. The average upload speed in the UK is currently 3Mbit/s, compared to the 23Mbit/s average download speed. For those premises with superfast broadband connections, the average upload speed is 8Mbit/s compared to the 56Mbit/s average download speed. 
 
Figure 25 below shows that the distribution of upload speeds is skewed towards the 
3.86
lower end, with 80% of connections having an upload speed of less than 2Mbit/s. 

## Data Use The Amount Of Data Used By Consumers Is Growing Rapidly

 
Overall data use has increased significantly. This is consistent with users migrating to 
3.87
faster connections, and because data-heavy services such as video streaming are 
becoming more popular. 
 
UK households and small businesses are, on average, downloading 51GB per month 
3.88
and uploading 7GB per month. This is a 93% increase on last year, with all operators 
seeing an increase in the amount of data downloaded. This corresponds with 
generally increased broadband speeds.  
 
[] 
3.89
 
The increases in data use may be due to the use of bundled TV content provided by 
3.90
these operators. For example, Virgin Media and Sky both offer bundled TV, 
broadband and phone services. Both offer video-on-demand services, but use 
different connections to deliver content. BT and TalkTalk also offer bundled 
broadband and IPTV. 
 
Data use varies according to broadband technology. As expected, data use is 
3.91
relatively low for first-generation ADSL connections and for the most commonly-used 
technology, ADSL2.  
 
FTTC and FTTP connections, however, appear to lead to a doubling in downloading 
3.92
and uploading activity over ADSL technologies, with average downloads of 74.7 to 
76.5GB, and average uploads of between 14.7 and 16.2GB per connection per 
month. To some extent, this may be a function of self-selection: those households 
who were heavy data users on previous technologies would be more likely to upgrade to NGA. 
 
Cable users, however, have not downloaded as much as those using FTTC and 
3.93
FTTP. This is despite their having a higher average speed than FTTC connections overall.  
 
When observing the relationship between speeds and data use for all technology, the 
3.94
drop in data use by cable users becomes more apparent, as shown in Figure 28 
below. 
Source: Ofcom analysis of operator data  

 
There are a few points to note from the figure above: 
3.95
i) There is a rapid increase in data use as speeds increase between 0 and 
10Mbit/s.  
ii) The majority of superfast broadband users appear to be using on average around 
100GB per month. 
iii) Virgin Media users can be identified at the drops in average data use at its 
various points of package entry, i.e. at 20, 30, 50 and 60Mbit/s.52  This suggests a 
lower-than-average data use through its primary broadband connections, in line 
with the overall technology averages shown in Figure 27.53 
 

## Changing Broadband Performance Demands

 
Demands on broadband services have been changing, driven largely by availability 
3.96
and by the way we use new online services. If we take a hypothetical four -person 
household, this is how its typical data use might look at peak time:  
 
The increasing technical quality of content (high definition and ultra-high definition) 
3.97
will increase bandwidth requirements over time. But this effect may be offset by 
improved compression standards, so less bandwidth will be required to transmit the same amount of data.  
 
The figure above highlights how a household's bandwidth requirements are 
3.98
increased both by the number of users and by their multi-tasking behaviour. We 
discussed the popularity of media multi-tasking in Ofcom's 2014 Communications Market Report. Ninety-nine per cent of adults undertake some form of media multitasking during any given week, made possible by the increase in media devices in the home.  

 
In December 2013 Ofcom part-funded a report for the Broadband Stakeholder Group 
3.99
(BSG) on estimated future demand for bandwidth. It isn't possible to accurately 
predict future demand and the factors playing into it are diverse. Therefore the research developed a scenario-based approach which considered how the different drivers could play out for different kinds of households. Some scenarios suggested 
that four adult households could require 20-30Mbit/s in 2023, with 4K video 
streaming, HD content downloads and continued web browsing, among other activities. The median household scenario had an estimated demand of 19Mbit/s in 
2023.54 
 Today, 44% of adults own a tablet (in 2011 this device was found in only 2% of 
3.100
households). Smartphone ownership has risen from 27% in 2011 to 60% in 2014. Smart TVs are also growing in popularity, although any significant growth is likely to be linked to the TV replacement cycle. Overall, these devices are expected to drive further demand for broadband bandwidth in the home. We discuss the implications of this further below. 

## Broadband Quality Of Experience Line Speeds Provide Only A Partial Picture Of Broadband Quality Of Experience

 Connection speeds are an important factor in the consumer's broadband experience, 
3.101
and especially when accessing data-heavy services such as video. To date, 
measurements of the speed of *last mile* broadband access network connections have been used to provide an indication of broadband performance. 
 However, in practice the speed of the access network is only one of a number of 
3.102
factors that can be equally important to the overall experience. For example, the upstream inter-connection arrangements between ISPs and online services, and the 
performance of in-home networking solutions such as Wi-Fi can have a significant 
impact. 
 Factors such as these, in the wider parts of the end-to-end broadband chain, are 
3.103
becoming more significant with the wider roll-out of higher-speed NGA technologies. 
This is because they are making the last mile access network connections a less significant constraint, putting greater emphasis on other potential bottlenecks in the 
delivery chain. 
 With this in mind, we describe below the results of our recent research into a new 
3.104
measurement approach. This looks beyond the access network and evaluates the 
effect of the full end-to-end connection chain. 

## All Parts Of The Broadband Connection Can Affect Consumers' Experience Of Using The Internet

 The broadband connection chain between a consumer and an online service provider 
3.105
can be separated into four main parts: 
- 
The in-home network. This includes home routers as well as Ethernet, powerline and Wi-Fi connections to broadband equipment in the home. 
- 
The broadband access network. This is the last-mile connection between the 
ISP and the consumer's premises. It can be provided using cable, DSL, wireless or fibre technology.  
- 
The ISP's backhaul and core network. This includes the IP-based networks 
operated by the ISP, which connect the consumer broadband access network to the wider internet and/or content hosts. 
- 
'**Upstream' core internet.** This includes the networks that are not directly 
owned by an ISP and constitute the wider internet, including the servers of online websites and services (e.g. video services). 
 

 All four parts of the connection chain can have an effect on the consumer 
3.106
experience. Broadband sync and line speed measurements (described above) only provide a partial view of this, because they do not measure the performance of either 
the upstream core internet or the home network parts of the connection chain.  

## End-To-End Connection Performance Has Different Effects On Different Types Of Service

 Different types of online services have different levels of sensitivity to the 
3.107
performance of the end-to-end connection chain. For example, high capacity live 
video streaming services are generally less tolerant of poor end-to-end connection 
performance than are lower capacity, non-real-time services such as email. 

## A New End-To-End, Quality Of Experience Measurement Approach

 Over the past year, Ofcom has commissioned independent research, by Actual 
3.108
Experience, into a new broadband measurement approach.55 This new approach is 
capable of: 
- 
evaluating the performance of the complete end-to-end connection chain 
between an online service provider and the consumer; and 
- 
identifying the parts of the chain that have the greatest effect on the consumer 
experience, for different types of online services. 
 The approach uses software installed on a home computer that sends and receives 
3.109
small amounts of data through the network, between the home and online content 
providers. By analysing the delays and losses that these information flows experience over time, the software is able to estimate the user's likely online experience. 
 The research conducted to date has been primarily a proof-of-concept exercise. The 
3.110
initial results, illustrated in the chart below, suggest that consumers with a lower broadband connection speed generally have a lower quality of experience than those with higher connection speeds. At connection speeds above the range of 5-10Mbit/s, the relationship breaks down and broadband connection speed is no longer an important determinant of performance. 
 The graph also shows that other parts of the connection chain, as well as the access 
3.111
network, are contributing to the reduction in performance at lower broadband 
connection speeds. For example, the increased contribution of the in-home network might result from poor Wi-Fi modem performance and/or an incorrectly configured 
home router.  
 The new measurement approach was also used to investigate how different 
3.112
applications perform over the same broadband network. The results of these 
evaluations are shown in the figure below. 
 This chart shows that the experience of using broadband for low-capacity voice calls 
3.113
is generally better than for web browsing and accessing video streaming services.  
 Although the results of this new measurement approach are only indicative at this 
3.114
stage, they illustrate its potential to provide useful input for consumers and ISPs:  
- 
consumers can access better information about the experience they are likely to 
have when accessing different online services; and 
- 
ISPs can gain better insight, helping them to identify how and where performance degradations are arising in the broadband delivery chain. 

## We Plan To Carry Out Further Research To Develop Our Approach To Evaluating The Performance Of The End-To-End Broadband Connection Chain

 In particular, we intend to conduct further tests to assess the correlation between the 
3.115
reported consumer experience of different broadband connections, and those 
predicted by end-to-end measurement approaches. This work will help us develop 
our approach to evaluating fixed broadband performance in the future. 

## Network Sharing And Wholesale Services

 Ofcom is required, under the legislation which underpins this report, to report on the 
3.116
extent to which providers allow other communications providers to use their 
networks. This can broadly be done in two ways: by network sharing and through wholesale services. 

## There Has Been Little Sharing Of Passive Infrastructure Between Network Operators.

 Since 2011, BT has been obliged through Ofcom regulation to offer passive 
3.117
infrastructure access (PIA) to operators across the UK, excluding the Hull area, for 
the deployment of access networks. In our most recent *Fixed Access Market Review*, 
published in June 2014, we decided to maintain this obligation on BT.  
 The *Fixed Access Market Review* is focused on mass market fixed access 
3.118
(broadband) networks so the PIA remedy is designed to give other operators the 
opportunity to deploy their own fibre/copper-based access networks. Take-up of Openreach's PIA product has been low, in part due to BT having won all of the main BDUK programme contracts to date.  
 As part of our review of leased line markets (the Business Connectivity Market 
3.119
Review) we are considering whether passive remedies could play a role in promoting 
competition in broadband markets. We have recently published a consultation 
seeking input from stakeholders to inform our assessment.56 
 Network operators also provide passive access to their networks on a commercial 
3.120
basis, including access to their ducts, or more commonly in the form of dark fibre. As well as sharing the passive infrastructure, communications providers use other types of infrastructure to support their roll-out of new networks, including electricity poles to 
carry overhead fibre or copper networks.  
 Network operators have reported very limited sharing of passive infrastructure for the 
3.121
roll-out of access networks. This is a similar situation to that which we reported on in 
2011. However, operators this year reported greater sharing of passive infrastructure with companies in *other* sectors, such as energy providers. BT reported use of 
others' passive infrastructure in almost all its exchange areas. Similarly, KCOM uses 
electricity poles to support its network roll-out in rural areas. 
 The EU has identified this opportunity for cross sector infrastructure sharing as a 
3.122
potentially important boost to the prospects for more rapid and widespread 
deployment of superfast broadband networks. It has introduced a Directive57 that will 
come into force in the UK by 2016 that should enable easier access to existing infrastructure, facilitate joint working and increase the likelihood of successful cross sector cooperation 
 Alongside access to its network infrastructure to support new network roll-out, there 
3.123
continues to be an obligation on BT Openreach to provide local loop unbundling (LLU). This allows an operator to take over the telephone line from the BT exchange to supply consumers and to install its own telephony and broadband equipment in the 
exchange.  
 Many operators, such as Sky and TalkTalk, provide services using the BT 
3.124
Openreach network. Virgin Media does not provide access to other operators. In Hull, KCOM has a very small number of resellers on its network. 

%  
100
84.2 
84.5 
89 
91.9 
94.1 
95.1 
90 80 70
Proportion of premises connected to unbundled exchanges
53.2 
56.6 
60
47.2 
50
41.5 
34.7 
36 
40
Proportion of exchanges that have been
unbundled
30
16.1 
19 
22.4 
23.9 
26.4 
27.7 
20 10
Proportion of lines provided using LLU
0
2008
2009
2010
2011
2012
2013

 

 The number of premises connected to unbundled exchanges, and the number of 
3.125
lines which are using LLU, have both increased. However, the rate of increase is 
slowing, as the most recent exchanges to be unbundled tend to have fewer lines than 
the exchanges unbundled in the initial roll-out of LLU. Nevertheless, the majority of 
premises are now connected to unbundled exchanges.  
 Sub-loop unbundling (SLU), a variant of LLU, enables an operator to gain access to 
3.126
the end-user's copper access connection at an intermediate point between the 
exchange and the premises - usually at the street cabinet. There is currently little 
demand for SLU in its current form, as it is viable only in very specific conditions. The 
largest application of SLU was the FTTC roll-out in the South Yorkshire Digital 
Region, an enterprise which ultimately did not succeed and was discontinued in 
August 2014.  

## Wholesale Services Are Available For Providers Without Their Own Infrastructure

 Companies can agree wholesale arrangements between one another on commercial 
3.127
terms. Operators that choose not to roll out their own network equipment can buy a 
wholesale service from another service provider. There are a range of wholesale services, giving operators a choice between different levels of management over the services they provide.  In some cases operators have chosen to provide services 
over their own network in areas where it is cost-effective and buy wholesale services in other parts of the country.  
 Wholesale requirements can also be introduced through regulation. Where we 
3.128
identify a market problem through a market review, we often find it appropriate to 
introduce wholesale must-offer obligations. These require operators to offer services 
on a wholesale basis to other operators. 
 Openreach's generic Ethernet access (GEA) product is the primary way for operators 
3.129
to deliver a superfast broadband service using the BT Openreach network. This is an active service that gives operators a virtual connection to their customers, although 
they have less control than with passive infrastructure access over the services they can provide to an end-user. Beyond this, wholesale services are available from a 
range of providers, including BT Wholesale, TalkTalk, KCOM and Vodafone. 

## Section 4 4 Sme Connectivity Overview

 
Businesses rely on telephone and internet services to sell goods and services, 
4.1
connect to customers, deal with suppliers and manage their workforce. Beyond this, many digital businesses rely on broadband services for the actual delivery of their products and services. Reliable and high quality broadband and mobile connections 
are becoming ever more important to commerce and to the wider economy.  
 
Good connectivity is important for businesses of all sizes. In this report we focus on 
4.2
provision for businesses with 249 or fewer employees - referred to as Small and 
Medium Enterprises (SMEs). SMEs have a range of different connectivity requirements.  
 
The infrastructure used to provide connectivity to large businesses is often dedicated 
4.3
high capacity 'leased lines'. Leased lines have near universal availability across the 
country because they are installed by arrangement with providers through commercial negotiation. The level of competition in leased lines is considered in 
detail in our *Business Connectivity Market Review.*58 However large business needs 
can also vary.  For example, large businesses may have local branches which 
depend on non-dedicated connections.   
 
This chapter considers: 
4.4
- 
SME connectivity requirements. Connectivity requirements vary depending on 
the size of SME and type of business. Research has shown that most SMEs say 
their needs are well catered for by the communications market. Some SMEs use 
dedicated business lines but others, particularly businesses with fewer 
employees, may use a mix of business and residential services, with some 
relying solely on residential services.59 Mobile coverage is also important to 
SMEs, as it is for residential consumers. 
- 
Coverage of superfast broadband for SMEs. We have analysed superfast 
broadband coverage for SMEs with at least one employee - i.e. excluding sole 
traders - and compared it with average coverage. Superfast broadband 
coverage has not reached all SMEs and our analysis suggests that SME coverage lags average coverage in urban areas in particular (67% vs. 83%). In rural areas overall coverage is lower, and the difference between superfast 
broadband coverage for SMEs and average coverage is smaller (16% vs. 22%).  
                                               
- 
Connectivity options. Businesses often have multiple connectivity options, 
although some connection types may not be suitable. An NGA based superfast 
broadband connection using the same network being deployed for residential customers may be one option. Other options include traditional non-fibre 
broadband (ADSL), leased lines and, where available, fixed wireless or ultrafast solutions. There is a fairly active market of smaller scale providers of fixed 
wireless and ultrafast connectivity for businesses, especially in urban areas. Leased lines may be a good option when multiple businesses are based in the same premises if they can aggregate their demand or if the resilience or reliability of leased lines is required. 
- 
Improving superfast broadband coverage for SMEs. The challenges around 
improving coverage for SMEs are broadly similar to the overall challenges of 
extending superfast broadband roll-out, discussed in section 3. Some SMEs 
may be able to take advantage of the Government's SuperConnected Cities 
voucher scheme, which can provide up to £3,000 to businesses to fund 
installation of a high speed broadband connection.60  
- 
Further work on SME connectivity. In September this year we announced a 
range of work to ensure that the market is delivering for SMEs. As part of this 
work we will develop our initial analysis of the availability of broadband for SMEs to understand the extent to which areas without superfast broadband coverage may have other options available to them. We are inviting views on current levels of availability, choice and quality of communications services for SMEs 
through a Call for Inputs.61 Responses will inform a report in spring 2015 on how 
the market for fixed and mobile connectivity is serving SMEs. 

## Sme Requirements

 
Connectivity requirements vary depending on the size of SME and type of business. 
4.5
Smaller businesses may be able to use ADSL or superfast broadband provided over 
NGA technologies. These connections are contended and offer asymmetric 
download and upload speeds.  Larger SMEs are likely to require dedicated internet connections which offer guaranteed quality of service. Some will require 
uncontended bandwidth and symmetric upload and download speeds provided using 
leased lines or other bespoke options. It is therefore important to understand the 
connectivity requirements of SMEs and the degree to which they are currently satisfied.  
 
Recent research conducted by Jigsaw for Ofcom found that most SMEs consider that 
4.6
communication services are fundamental to their business (83%) and that their needs are well catered for by the communications market (85%).  
 
The Jigsaw research found that satisfaction with internet services was lower than for 
4.7
landline and mobile voice services. Speed and reliability were the most frequently given reasons for dissatisfaction. In particular, satisfaction with ADSL broadband - 
which is used by two thirds of SMEs - was significantly lower than with other 
services. SMEs that said their growth had been hampered by lack of suitable 
communications services (15%) reported higher than average dissatisfaction with ADSL. A minority of SMEs (11%) believed their business would benefit from 
communication services not currently available. Faster/fibre broadband was the service most likely to be mentioned.62  

 
The Federation of Small Businesses (FSB) published a report in July 2014 in which it 
4.8
claimed that 14% of small businesses consider a lack of reliable and/or fast broadband to be their main barrier to growth. It called on Government to adopt more ambitious targets for rolling out high speed broadband for businesses across the 
UK.63 The Communication Consumer Panel research into micro businesses' 
experiences of communications services highlights the critical role that communications services play in the success of businesses with 0-9 employees. The 
report calls for greater support from the Government and industry to help maximise 
the opportunities presented by communications services, including supplying 
improved speeds and coverage for both fast broadband and mobile voice and data.64  
 
Some SMEs, such as those that offer internet-based services, are likely to have 
4.9
higher resilience and/or bandwidth requirements. They would therefore be likely to 
require a service tailored to business needs, which provides better performance and has higher service levels than services which are typically taken by residential consumers.  The majority of SMEs buy business broadband services rather than 
using residential products (77% for landlines, 74% for internet services and 50% of 
mobile phone services).65 
 
There is evidence that superfast broadband has contributed to business benefits, 
4.10
suggesting that SMEs in areas not yet served by NGA could benefit from roll-out. In 
Cornwall, the site of a specific intervention to deliver superfast broadband66, 79% of 
businesses surveyed reported that superfast broadband was saving time and/or 
money.67  At the end of the interim phase of the Superfast North Yorkshire project 
37% of businesses said that they had gained new customers since receiving the 
support.68  

## Case Study - Digital Clusters

New "start-up" businesses working in similar fields often group together in tight geographical clusters. The benefits of industrial clustering include creating an environment that fosters collaboration and innovation and attracting talent and investment.69 Digital businesses will have high connectivity requirements and in particular are likely to require more symmetric services to allow for large file uploads. 

                                               
The TechBritain project identified 32 tech/digital clusters in Britain in October 2014.70 The top five by size were London, Manchester, Edinburgh, Cambridge and Newcastle upon Tyne. Some clusters are located in urban centres and others in purpose-built sites.  
Tech City - the cluster of digital start-ups centred on Old Street roundabout in east London - has largely developed in buildings not previously used for office work. This has meant that there are sometimes fewer connectivity options for companies based there. Digital start-ups in Manchester's Northern Quarter have reported similar challenges. When start-ups are located in the same building they can often benefit from grouping together to pool their demand. This can enable them to attract (and/or share) the cost of installing and leasing high bandwidth connections to their offices. The Perseverance Works provides an example of businesses successfully taking this approach. It houses 90 small businesses in a complex of buildings in Shoreditch, London at the heart of Tech City. Following technical advice to define connectivity requirements, they tendered collectively for a communications supplier. The contract was awarded to FibreOptions to install FTTP throughout the site. So far 30 businesses have signed up for services and used BDUK connection vouchers to fund the installation. The network provides a 100Mbit/s symmetric service with 10:1 contention ratio.71  
In Cambridge the university has played a key role in the development of the cluster. Companies are based at campuses and parks in and around the city, for example the St John's Innovation Centre. Connectivity is planned into the development of campus-based clusters and companies' connectivity requirements are met as part of their tenancy agreements. 

 
Mobile services are also important to SMEs, who often rely on doing business on the 
4.11
move. Research showed that 79% of SMEs used mobile phones for business. SMEs based in, or regularly working in, remote rural locations were less satisfied with the 
reliability of their signal and geographic coverage of their mobile service.72  Similarly 
a recent Communications Consumer Panel report on microbusinesses highlighted that "those who were mainly on the road or working on site, were more reliant on the 
coverage of mobile networks".73  Improving the coverage and quality of mobile 
services across the UK will benefit SMEs and residential consumers alike.  
 
The current position, and initiatives underway to improve mobile network capabilities, 
4.12
are discussed in section 5. The remainder of this chapter focuses on fixed connectivity for SMEs, where we have a specific concern about the availability of superfast broadband. 

## Coverage Of Superfast Broadband For Smes

 
We have analysed the availability of superfast broadband delivered over BT, Virgin 
4.13
and KCOM's networks to SMEs of at least one employee (i.e. not including sole traders). We have compared coverage of SMEs against the average, split by geography and size of business.  
 
There is less data available about the location of sole traders. Therefore we have not 
4.14
been able to distinguish superfast broadband availability for sole traders from overall availability for residential and small commercial premises. We know that sole traders are a significant proportion of SMEs and will consider their connectivity options as 
part of our further work on SMEs. 

## Coverage By Geography

 
Analysis of superfast broadband availability for SMEs (Figure 35) shows that it is 
4.15
available to 56% of SMEs across the UK, compared with 75% average coverage. Superfast broadband availability to SME business addresses is higher than the UK average in Northern Ireland (69%) and England (59%) and significantly lower in Scotland (40%) and Wales (37%). In all nations superfast broadband availability for 
SMEs lags average coverage. 
 
Superfast broadband availability for SMEs is considerably lower than total coverage 
4.16
in urban areas (67% vs.83%). In rural areas, superfast broadband availability is lower for SMEs than total coverage but by a lesser degree (16% vs. 22%). 
 
It should be noted that lower availability of superfast broadband to business 
4.17
addresses may be in part due to the availability of dedicated connectivity such as leased lines. Where SMEs are based in large buildings or are in business parks, dedicated fibre connections (which can potentially be shared across multiple businesses) may better meet the needs of SMEs than BT's FTTC network or Virgin Media's cable network. Ofcom's report on the availability, choice and quality of 
communications services for SMEs, scheduled for publication in spring 2015, will 
examine this further. 

Total SFBB 
coverage 
 
UK 
75% 
56% 
England 
77% 
59% 
Scotland 
61% 
40% 
Wales 
55% 
37% 
Northern Ireland 
77% 
69% 


Urban 
83% 
67% 
Rural 
22% 
16% 

Source: Ofcom analysis of operator data 

SFBB coverage for 
SMEs with 1 or 
more employees 

## Coverage By Sme Size

 
The table below shows that superfast broadband coverage is higher for SMEs with 1-
4.18
9 employees (58%) than small (51%) and medium (47%) businesses on a UK-wide 
basis. We will investigate this further but it may be due to the greater likelihood that smaller SMEs are based in residential areas, which have been the focus of superfast broadband roll-out. It may also reflect that larger businesses are more likely to have 
their needs met by the dedicated connectivity provided by leased lines. This pattern of decreasing superfast broadband availability as SME size increases is mirrored in England and Scotland but not in Wales and Northern Ireland. 
 
In urban areas, larger SMEs have worse superfast broadband coverage, in line with 
4.19
the national trend for SME coverage. In rural areas coverage is slightly higher for small and medium businesses than businesses with 1-9 employees.  

SMEs with 
Micro 
1 or more 
(excluding 
employees 
sole traders) 
 
 
1-9 
1-249 
employees 
employees 
 
UK 
56% 
58% 
51% 
47% 
England 
59% 
61% 
52% 
48% 
Scotland 
40% 
42% 
38% 
34% 
Wales 
37% 
37% 
38% 
35% 
Northern Ireland 
69% 
67% 
74% 
74% 


Urban 
67% 
70% 
59% 
53% 
Rural 
16% 
15% 
17% 
17% 

## Options For Smes

 
Businesses often have multiple connectivity options available to them, although some 
4.20
connection types may not be suitable. An NGA-based superfast broadband 
connection may be one option, but a significant proportion of SMEs are unable to 
access superfast broadband due to gaps in coverage. These may be in cities, business parks and in rural areas.  
 
SMEs (with or without NGA coverage) will typically have other options for 
4.21
connectivity including: 

| Small     |        |
|-----------|--------|
|           |        |
|           |        |
|           |        |
|           |        |
|           |        |
|           |        |
| 10-49     | 50-249 |
| employees |        |
|           |        |
| employees |        |
|           |        |

- 
Broadband up to 24Mbit/s (although typically much slower) using traditional broadband (ADSL lines) and available from a range of providers including products tailored for businesses. 
- 
Leased lines, offering fully scalable uncontended symmetric capacity, by providing a dedicated fibre connection from the customer's premises to the communications provider's Ethernet core network. 
- 
Services such as Generic Ethernet Access (GEA) and Ethernet in the First Mile (EFM) which bridge the gap between broadband services and full Ethernet solutions. EFM uses between two and eight copper pairs to deliver symmetrical 
speeds from 2Mbit/s to 35Mbit/s. 
 
However, we are aware that for some SMEs these options may either provide 
4.22
insufficient speeds and reliability (ADSL), lack symmetric download and upload 
speeds (ADSL and  NGA) or may not be affordable (leased lines).74  
 
Installation times are also an important factor for SMEs. Businesses and 
4.23
communications providers have raised concerns with us about Openreach's quality of service in the delivery of wholesale Ethernet leased lines to new customers on a timely basis. Openreach is engaged in a number of initiatives to improve performance and the Office of the Telecoms Adjudicator has been facilitating industry discussions. We are reviewing these developments as part of the Business Connectivity Market Review (BCMR) and considering whether there is a need for regulatory intervention to address them.  

## Improving Urban Coverage

 
There are gaps in superfast coverage in some inner city areas due to a range of 
4.24
factors discussed at 3.31. BT is assessing options for extending superfast coverage 
to gaps in some urban centres. This includes technical trials of new approaches where the existing network topology makes NGA roll-out more challenging. 
Extending coverage would enable the provision of superfast services through a range of products from different providers.  
 
Another option for many may be the Government's Superconnected Cities project, 
4.25
which offers funding for SMEs towards installation of infrastructure to deliver faster 
internet services. The funding can be used with a range of providers in 22 cities 
across the UK. This project has already helped many SMEs get high speed 
broadband. In some cases, however, the use of the funding is limited by current 
network roll-out and SMEs can still face significant installation costs and lead times. 
 
In some cities, alternative providers are beginning to roll out ultrafast fibre networks 
4.26
offering speeds of up to a gigabit per second. For example: 
- 
CityFibre. ISPs use Cityfibre's fibre-optic network to serve business customers 
in York, Aberdeen and other cities (see case study below) 
- 
Hyperoptic. FTTP network providing 1 Gbit/s broadband in London, Reading, 
Cardiff and Bristol and now expanding to Leeds, Manchester and Liverpool. 
- 
Nottingham Ultraband project. Nottingham City Council is piloting a project 
which connects three business sites - Broadway Cinema and Media Centre, 
Antenna and Mercury House - in the city centre with a gigabit network.  
 
These kinds of networks can be suitable for SMEs with bandwidth requirements 
4.27
higher than those offered over the residential NGA network.  
 
There are also further options beyond fixed networks. In some areas, new 
4.28
approaches to securing business connectivity are emerging that do not rely on laying fibre. These include: fixed-wireless and 4G based services provided by companies like Bluebox Broadband, Call Flow Solutions, MLL Telecom, Optimity, Relish and 
others.75 

## Improving Rural Coverage

 
SMEs in rural areas have low superfast broadband coverage. The continuation of 
4.29
Phase 1 and Phase 2 of the BDUK programme to extend coverage to 95% of the country will increase coverage for SMEs as well residential consumers, especially as a proportion of SMEs are home-based. BDUK is now also considering options to 
address the "final 5%", discussed in section 3.  
 
In some areas business coverage is being explicitly considered in roll-out plans. The 
4.30
superfast broadband roll-out projects in Cornwall and North Yorkshire are not yet complete and both incorporate ambitions to provide coverage to businesses as well as residential customers.  
 
Non-major NGA providers are providing business connectivity in some rural areas. 
4.31
For example, Gigaclear provides a range of gigabit business broadband packages in rural villages in Oxfordshire and is expanding its FTTP network in other rural areas.  

## Business Parks

 
Some business parks lack fibre connectivity and are outside current NGA upgrade 
4.32
plans. In its report the FSB called for the Government to "prioritise the delivery of 
fibre-optic broadband to new and existing business parks and ensure that enterprise 
zones and clusters are fully connected. The aim should be to equip all businesses in 
these areas with high-speed broadband, with guaranteed speeds and a symmetrical 
service."76   
 
We will consider the factors affecting business park connectivity as part of our further 
4.33
work on SMEs. It may be that business park connectivity is better provided by dedicated leased line (shared across businesses) or other network options than by superfast broadband delivered over FTTC or cable. The case study examples from Tech City and Titanic Quarter show the role bespoke solutions can play in serving business parks. 

## Case Study - Titanic Quarter, Belfast

The Titanic Quarter provides an example of how connectivity provision can be integrated into the development of a business site to serve a range of residential and business consumers, including SMEs. Titanic Quarter is a regeneration project in Belfast's docklands on the edge of Belfast City Centre. Around 4,000 people work and 1,000 live in the estate. Key tenants include the Northern Ireland Science Park, Titanic Belfast visitor centre, Belfast Metropolitan College, Citi, the Public Records Office and the Titanic Studios, currently home to the production of HBO's series 'Game of Thrones'. The Science Park is a business support initiative offering office space facilities across six buildings within Titanic Quarter to knowledge-based enterprises of all sizes. It is currently home to 125 companies, mostly SMEs, working in areas as diverse as software development, mobile technology, renewable energy, digital media and financial engineering. 

Both Titanic Quarter and the Science Park operate separate private, managed, high-capacity fibre and copper network infrastructures on a transparent, open-access, carrier-neutral basis. The networks offer managed extension circuits and dark fibre connections for voice and data, providing a single style of infrastructure within the estate. Telecoms providers can connect to this infrastructure at common gateway points and are carried to the end customer within Titanic Quarter. Under Titanic Quarter's agreement with its local infrastructure management partner - Atlas Communications - the rates of access, charging and Service Level Agreements are the same for all telecoms providers. The Science Park has a similar but separate arrangement which can offer tenants 5GBit/s connectivity through a range of providers. Direct international connectivity is also available from Titanic Quarter via Project Kelvin - Northern Ireland's fibre-optic link to North America. Good connectivity has proved crucial to Titanic Quarter's tenants. It has helped the Science Park attract technology-focused overseas companies and also develop its SMEs by easily relocating growing tenants within the park. Citi currently handles one tenth of its daily global Foreign Exchange business from its Titanic Quarter operation. 

## Further Analysis

 
Further work is required on the question of connectivity for SMEs to quantify the 
4.34
issue more precisely and understand the extent to which gaps in superfast broadband coverage are affecting SMEs.  
 
As part of our SME plan, we have issued a Call for Inputs (CFI) to ask small 
4.35
businesses and communications providers for their views on current levels of availability as well as choice and quality of communications services for SMEs. 
Responses are due by 2 January.77 We encourage interested parties to respond in 
order to highlight issues in relation to the provision of communications services to 
SMEs. 
 
Responses to this CFI will inform a report on how the market is serving SMEs in 
4.36
relation to fixed and mobile connectivity. This will be published in spring 2015. This initial report will outline any further work we plan to undertake. We will also assess 
whether adequate protection is in place for SMEs, if we found there are specific barriers and problems faced by SMEs. 

 
Alongside this, we have recently launched a business portal on our website with 
4.37
advice specifically tailored for businesses. It includes information on choosing or switching to a new provider, navigating and negotiating contracts, and resolving 
complaints with a provider.78 

## 5 Mobile Networks And Wi-Fi Overview

 
Mobile services are now at the heart of how most people stay in touch, at home or 
5.1
out and about. In the UK, 95% of households use mobile phones and 16% have no voice landline at all. Mobiles are also vitally important to business: 79% of SMEs use 
mobile phones.  
 
In this section we provide an update on: 
5.2
- 
The levels of coverage provided by 2G, 3G and 4G mobile networks; 
- 
The increasing and changing use of mobile data services, including video and 
over the top messaging services; 
- 
The increasing number and usage of public Wi-Fi hot spots; 
- 
Emerging developments in the Internet of Things sector and next generation 5G mobile services. 
 
A short summary of the key developments in each of these areas is provided below, 
5.3
which are then set out in greater detail later in this section.  
- 
The variety of ways in which consumers use mobile devices has led us 
towards a more refined approach to measuring mobile coverage: A 
consequence of increasing mobile usage is that consumers increasingly expect 
to be able to reliably use mobile phones in more locations than ever before - 
indoors, outdoors, on the move, in cars, and in more rural areas. To provide mobile coverage estimates that are likely to more representative of the consumer experience of using mobile services we have made two adjustments to our reporting of mobile coverage in this year's report:  
o We have assumed a higher average mobile signal level, -86dBm, is 
needed to make a reliable voice call on a 2G network. This increased level takes into account the higher operational signal levels required by some more recent smartphones. It also accounts for the signal levels we have found from drive tests to be needed in practice to make reliable voice calls in vehicles fitted with external mobile aerials; 
o We have provided estimates of in-building mobile coverage and 
coverage in vehicles without an external aerial, based on an assumed additional propagation loss factor of 10 dB.  In practice the actual inbuilding loss factor is subject to large variations depending on the 
building type and the construction materials used.79 Similarly different 
types of vehicle are likely to reduce in-vehicle signal levels by different amounts. Given this, the in-building and in-vehicle coverage estimates 
provided in this report should be viewed as indicative.       
 
Based on these adjustments the headline levels of 2G, 3G and 4G coverage are: 
5.4
- 
2G voice and low data rate coverage: 99% of premises are covered outdoors 
by at least one MNO and 97% are covered by all three of the MNOs that 
operate 2G networks. Rural coverage is lower, with 98% of premises covered outdoors by at least one MNO, and only 82% covered by all operators. Indoor premises coverage in the UK by all three 2G networks is 83%.  
- 
3G high speed data coverage: 84% of UK premises are covered outdoors by 
all four MNOs, although this falls to 75% of premises in Scotland, 65% in Wales and 63% in Northern Ireland.  Indoor premises coverage in the UK by all four 3G networks is 71%. 
- 
4G very high speed data coverage: The current major technological 
development in mobile is the ongoing roll-out of fourth generation (4G) 
networks. Good progress is being made with 35% of premises now having 
coverage by Vodafone, EE and O2, and 72% of premises have coverage from 
at least one of them. Initial analysis suggests that between June and October 2014, these three MNOs have increased coverage by between 2 and 14 percentage points.  
 
We are supporting a number of initiatives to improve mobile coverage: To help 
5.5
improve mobile coverage and support competition Ofcom is taking steps to increase the amount of lower frequency spectrum, which has good outdoor and indoor propagation characteristics, for use by mobile networks. This included the recent award of the 800 MHz band which formed part of the 4G auction, and future plans to enable the release of the 700 MHz band. In addition the Government's Mobile Infrastructure Project is aiming to extend mobile coverage to up 60,000 premises that are in mobile 'not-spots' locations. The Government is also consulting on a range of 
options to ensure mobile coverage is available from more than one MNO in 'partial mobile not-spots' locations. These options include: national roaming, whereby a 
consumer unable to access their normal network could roam to another operator's to make a call; increased infrastructure sharing; "virtual network" arrangements; and, 
extended coverage obligations. Ofcom is providing technical support to this 
programme. In addition, technological developments may also help: for example, 
MNOs are increasingly using femtocells to improve mobile coverage in some areas. 
 
Mobile data usage continues to grow rapidly but SMS messaging has reduced: 
5.6
The growth in consumer demand for mobile data has been rapid: at the time of our first Infrastructure Report in 2011, only 32% of adults were using their mobile to access the internet. Three years later, 57% of adults do. Total data throughput has 
increased by 53% this year, which is similar to the increase in 2013. This has been 
driven to a large degree by the continued growth in both the numbers and use of smartphones and tablet PCs. Video continues to represent a significant proportion of 
mobile traffic at 39%. In contrast the number of SMS messages sent in 2013 fell from 
172 million in 2011/12, to 130 million. This is likely to be due to a substitution of SMS 
messaging by over the top messaging applications such as Whatsapp and Kik. The 
number of reported users of over the top messaging services grew by over a third 
over this period80. 
 
 
There are is already significant interest in moving beyond 4G: LTE advanced, 
5.7
sometimes known as 4G+, has been launched in some cities, increasing both capacity and speeds of mobile broadband. Looking further ahead, research is underway to establish the capabilities of future 5G networks, which could be 
available for deployment from 2020 onwards. In addition to providing enhanced mobile performance, high speed 5G technology may also potentially be used in the 
future to provide fixed wireless ultrafast broadband connectivity to homes (see the Fixed Broadband section). 
 
The Internet of Things is starting to become reality: The number of applications 
5.8
and devices communicating with each other without human involvement are expected to grow. Existing examples include home management sensors, smart meters, vehicle traffic management and wearable technologies such as fitness bands. The capacity requirements of these first generation services are relatively modest and can be most likely met by existing, mobile, and license exempt bands. 
However, they are likely to raise a new set of network security and reliability, consumer privacy, and ubiquitous coverage requirements.  

## Measuring And Predicting Mobile Coverage

 
Currently, there are four mobile network operators (MNOs) operating across most of 
5.9
the UK:81 
- 
EE (previously known as 'Everything Everywhere'); 
- 
O2 (owned by Telefonica UK); 
- 
Three (owned by Hutchinson Whampoa); and 
- 
Vodafone.  
 
These four MNOs operate using two infrastructure sharing arrangements. EE and 
5.10
Three share infrastructure under the 'MBNL' joint venture, whilst O2 and Vodafone share infrastructure as part of an extended joint venture and commercial agreement referred to as Cornerstone/Project Beacon.  
 
In our previous our Infrastructure Report and updates we have reported on the 
5.11
mobile coverage provided by MNOs in terms of: 
- 
Outdoor premises coverage: this indicates the proportion of residential and 
small business premises where there is a strong enough mobile signal to make a call outside the building. This metric does not provide an indication of the inbuilding coverage.  
- 
Geographic coverage: this indicates the total land area where there is a strong 
enough mobile signal to make a call outdoors. This provides a better indication of coverage away from built up areas than outdoor premises coverage. 
- 
Roads coverage: this indicates the parts of the national road network where 
there is a strong enough mobile signal to make a call outside vehicles or inside vehicles fitted with an external antenna. 
                                               

 
These measures provide an important but only partial measure of the mobile 
5.12
coverage experienced by consumers during their typical day-to-day activities 
because: 
- 
They do not include the ability to achieve mobile coverage in some specific use 
cases such as in buildings and in vehicles which are not fitted with an external 
aerial;  
- 
They do not account for variations in handset receiver performance. In particular some more recent multi frequency band, multi-standard smartphones often 
require a stronger signal to operate than earlier generation phones82; 
- 
The planning models used to predict mobile coverage are statistical in nature 
and can only provide an estimate as opposed to exact prediction of mobile coverage in a given location. 
 
To help address these issues we conducted a series of drive tests to help determine 
5.13
the average level of signal typically required to enable a voice call to be reliably made on a typical current generation smartphone.  The scope and results of this study are described below. 

## We Have Undertaken Drive-Testing To Validate Mno Coverage Estimates

 
Periodically, we test the accuracy of the coverage data provided by MNOs. This year 
5.14
we undertook a series of drive-testing exercises to collect: 
- 
Signal strength measurements: this involved scanning all spectrum frequency 
bands and mobile technologies (2G, 3G and 4G) to find the strongest signal in 
any given location for each MNO and technology. We recorded received signal strengths using a specialist measurement device. 
- 
Voice call success rate measurements: this involved continually making test 
calls on each network from handsets mounted within the vehicle so that we 
could establish the relationship between signal strength and call success rates. 
 
These measurements were undertaken by two independent and well-established 
5.15
mobile network performance consultancies, Real Wireless and P3 Communication, during September 2014 in various locations in England and Wales.  

## Results Of The Exercise

 
Figure 37 shows the distribution of the differences between the measured and 
5.16
predicted signal strengths (i.e. measured minus predicted) of the three 2G networks for 32,000 different outdoor locations in urban areas of the Midlands and rural areas 
in the Welsh borders. 
                                               

 
The results indicate that on average the predicted signal levels are approximately 
5.17
5dB higher than the measured signals. As all three networks show a similar average difference, this may result from a calibration error in the test equipment used which has introduced a systematic offset in the data. The data does however indicate that the differences between the predicted and measured signal levels are similar for all three 2G networks. 
 
Despite the average difference between measurements and predictions being close 
5.18
to zero, the width of the curve indicates that there can often be large disparities. 
These differences appear to follow the bell shaped distribution typically associated with localised variations in signal levels caused by shadowing by buildings and trees. 
These variations are typically modelled on a statistical basis in the coverage prediction models used by MNOs, and hence would be expected to show up in the chart above as a bell shaped distribution when compared with measurements made at precise locations. 
 
The predictions and measurement presented in the chart above represent the mean 
5.19
(average) values over a 100m x 100m square 'pixel' of land. In reality there will also be variations in the signal strength within the pixel. As a result, even where the measured mean signal exactly matches the predictions, users within the pixel may experience different levels depending on their exact location. In areas of weak signal, there may be some parts of a pixel where a call is possible, but others where it is not. 
 
As well as allowing us to compare operator predictions with real world 
5.20
measurements, the drive test results have also allowed us to consider the relationship between the signal measurements and call success rates.  
 
Figure 38 shows the minimum, average and maximum signal strengths measured by 
5.21
handsets during successful test calls placed on the 2G networks in the West Country 
and Shropshire. Call failures due to problems unrelated to signal strength, such as network contention, have been excluded. Because actual measured signal levels are used in these test the differences between the measured and predicted results described above do not affect the conclusions we can draw from them. 

 
From Figure 38 it can be seen that83: 
5.22
- 
As the average signal strength reduces the likelihood of being able to 
successfully make a call reduces. Typically calls can be maintained during brief 
periods of very low signal, although the user may experience periods of interrupted speech. 
- 
The average minimum signal strength needed to achieve a call success rate of 
90% is approximately -86dBm. 
 
Given these results, we have assumed in this report that a minimum signal strength 
5.23
of -86dBm is needed to achieve outdoor 2G coverage, including coverage in vehicles 
fitted with external aerials. This is consistent with the minimum signal level assumed to be needed in our 2012 Infrastructure Report Update and means that in the areas predicted to have 2G coverage, there is likely to be at least a 90% chance of consumers being able to successfully make a voice call (due to signal strength issues). 
 
Some MNOs have argued that lower 2G signal threshold of -93 dBm should be 
5.24
used.84 Whilst we recognise that a lower signal threshold may be sufficient to make a 
call in some use cases such as stationary use outdoors away from buildings and trees, the measurements we have made to date suggest that a higher level of -86 
dBm is required for the use case of using a mobile device in a vehicle fitted with an external aerial. For this reason we have used a signal level of -86dBm for the purposes of reporting outdoor levels of 2G coverage in this report. However, we recognise that further work is needed to establish the signal levels required to provide mobile coverage for different use cases and will be a major priority for Ofcom's work on mobile coverage over the coming months.       

 
To provide a first order estimate of network coverage in buildings and in vehicles (not 
5.25
fitted with external aerials) we have assumed that a 10dB higher minimum signal level is required than for outdoor mobile coverage. For indoor 2G coverage this means that a level of -76 dBm is assumed to be needed to provide indoor coverage. 
In practice the additional signal strength required to provide indoor coverage is dependent on the type and construction on the buildings and the types of vehicles 
used. This means that estimates of indoor and in-vehicle coverage provided in this 
report should be treated as indicative. 
 
For the purposes of reporting outdoor 3G coverage we have used the same signal 
5.26
level threshold criteria as used in our previous infrastructure reports. This is a different methodology to that established for the 3G coverage licence obligations.    
 
As highlighted above, we are planning to continue to refine and develop coverage 
5.27
and other performance statistics with the aim of reflecting as closely as possible what consumers are actually experiencing. 

## Levels Of 2G, 3G And 4G Mobile Coverage

 
In this year's report we report for the first time individual coverage results for all 
5.28
MNOs, with the exception of the coverage of Three's 4G network. In the time 
available it was not possible to resolve differences between Three's data and our field measurements on 4G coverage, leading to its omission from this report. Our overall coverage figures for 4G also exclude Three's coverage and therefore only represent 4G coverage from EE, Vodafone and O2. However, our analysis of the 
data received indicates that at this point in time Three's 4G coverage is lower than 
that of other MNOs. 
 
In addition to individual MNO specific data, we also present coverage results on an 
5.29
aggregated basis for the following categories: 
- 
'complete not-spots': areas or premises unable to receive mobile coverage 
from any MNO. 
- 
'partial not-spots': areas or premises able to receive mobile coverage from 
some but not all MNOs. 
- 
covered by all three MNOs: areas or premises able to receive mobile coverage 
from all MNOs. 
 
These are also presented for the following different use cases: 
5.30
- 
Outdoor premises coverage: this indicates the proportion of residential and 
small business premises where there is a strong enough mobile signal to make a call outside the building.  
- 
Indoor premises coverage: this indicates the proportion of residential and 
small business premises where there is a strong enough mobile signal to make a call inside the building.  
- 
Outdoor geographic coverage: this indicates the total land area where there is 
a strong enough mobile signal to make a call outdoors.  
- 
Motorway coverage: this indicates amount of the national motorway network 
where there is a strong enough mobile signal to make a call outside vehicles or inside vehicles fitted with an external antenna. 
- 
A and B road coverage: this indicates the amount of the national A and B 
network where there is a strong enough mobile signal to make a call outside vehicles or inside vehicles fitted with an external antenna. 
 
In addition, we report on mobile coverage levels at a UK, urban and rural, as well as 
5.31
a nations' level.   

## Coverage Of Voice And Low Speed Data Services Over 2G There Is Some Variation In Voice Coverage Between Mnos (Over 2G) Which Creates *Partial Not Spots*

 
For the first time this year, we are publishing the MNOs' individual coverage data. 
5.32
Voice services are delivered over 2G networks by EE, O2 and Vodafone. 2G networks also support low speed data communications and short messaging services (SMS). Voice is also carried over 3G networks by Three and by the other MNOs but 3G coverage is overall lower than 2G. We therefore report on 2G coverage as a proxy for overall voice coverage in the remainder of this chapter. 

 
O2 
Vodafone 
EE 
Outdoor coverage 
Premises 
99% 
99% 
98% 
Geographic 
78% 
82% 
78% 
National roads coverage Motorways 
100% 
100% 
100% 
A & B Roads 
91% 
93% 
91% 
Indoor/In-car coverage Premises 
94% 
92% 
90% 
Motorways 
98% 
98% 
97% 
A & B Roads 
74% 
78% 
78% 

Source: Ofcom analysis of MNO data 

 
Figure 39 above shows that whilst in high level terms the three 2G MNOs provide 
5.33
broadly similar in terms of coverage across the various metrics, there are differences 
which create partial not spots where a mobile signal is available from some but not all three 2G networks. 

 
O2 (2G) 
Vodafone (2G) 
EE (2G) 
Outdoor premises coverage Rural 
91% 
91% 
91% 
Urban 
>99% 
>99% 
>99% 
Indoor premises coverage Rural 
67% 
67% 
69% 
Urban 
98% 
97% 
93% 

Source: Ofcom analysis of MNO data 

 
Figure 40 above shows that across all 2G operators coverage is better in urban than 
5.34
rural areas.    

## Uk Coverage Of 2G Mobile Networks

 
A summary of 2G mobile network coverage in the UK is shown in Figure 41.  
5.35

 
Complete notspots 
Partial not-spots 
Covered by all 
three MNOs 
Outdoor coverage 
Premises 
coverage 
<1% 
3% 
97% 
Geographic 
coverage 
11% 
21% 
68% 
National roads coverage Motorways 
0% 
<1% 
>99% 
A & B Roads 
3% 
13% 
84% 
Indoor/In-car coverage Premises 
2% 
16% 
83% 
Motorways 
0% 
6% 
94% 
A & B Roads 
9% 
33% 
59% 

Source: Ofcom analysis of MNO data 

## There Is Good 2G Coverage On Motorways And Major Roads But There Is Less Coverage On Minor Roads

 
Motorways are almost completely covered by 2G networks. 99% of A roads are 
5.36
covered by at least one MNO. 3% of A & B roads, however, have no mobile voice coverage and 13% of A & B roads only have mobile voice coverage provided by one 
or two of the MNOs. 
 
B roads with very low 2G coverage are primarily rural and mostly in Scotland, Wales 
5.37
and Northern Ireland.  

## Coverage Of 2G Networks In The Nations

 
A comparison of 2G coverage in England, Scotland, Wales and Northern Ireland is 
5.38
shown in Figure 43. 

| England                 | Scotland    | Wales    | Northern Ireland    |
|-------------------------|-------------|----------|---------------------|
| No                      | All         | No       |                     |
| MNO                     |             |          |                     |
|                         |             |          |                     |
| MNOs                    |             |          |                     |
|                         |             |          |                     |
| MNO                     |             |          |                     |
|                         |             |          |                     |
| MNOs                    |             |          |                     |
| Covered by              |             |          |                     |
|                         |             |          |                     |
| Outdoor coverage        |             |          |                     |
| Premises                |             |          |                     |
| coverage                |             |          |                     |
|                         |             |          |                     |
| 0%                      | 98%         | 1%       | 95%                 |
| Geographic              |             |          |                     |
| coverage                |             |          |                     |
|                         |             |          |                     |
| 4%                      | 82%         | 24%      | 47%                 |
| National roads coverage |             |          |                     |
| Motorways               |             |          |                     |
|                         |             |          |                     |
| 0%                      | 100%        | 0%       | 100%                |
| A & B                   |             |          |                     |
| Roads                   |             |          |                     |
|                         |             |          |                     |
| 1%                      | 92%         | 7%       | 70%                 |
| Indoor/In-car coverage  |             |          |                     |
| Premises                |             |          |                     |
| 1%                      | 85%         | 3%       | 78%                 |
| Motorways               |             |          |                     |
| 0%                      | 95%         | 0%       | 92%                 |
| A & B                   |             |          |                     |
| Roads                   |             |          |                     |
| 4%                      | 68%         | 18%      | 43%                 |

Source: Ofcom analysis of MNO data 

## Rural And Urban 2G Coverage

 
A summary of 2G rural and urban UK mobile network coverage is shown in Figure 
5.39
44. This shows that the effect of full and partial coverage not spots is lower for urban than rural areas.   

 
Complete notspots 
Partial not-spots 
Covered by all 
three MNOs 
Outdoor premises coverage 
Urban 
0% 
<1% 
>99% 
Rural 
2% 
17% 
82% 
Indoor premises coverage Urban 
0% 
11% 
89% 
Rural 
11% 
46% 
43% 
Source: Ofcom analysis of MNO data 
| All    | No     | All    | No     |
|--------|--------|--------|--------|
| MNO    | MNOs   | MNO    | MNOs   |

## 2G Outdoor Premises Coverage In Different Uk Local Authorities

 
The map below shows how 2G outdoor premises coverage varies across the local 
5.40
authorities in the UK. 

## 2G Call Failure And Completion Rates Can Be More Relevant To The Consumer Than Basic Coverage Metrics

 
Looking beyond the coverage predictions set out above, it is also worthwhile to 
5.41
examine call failure and completion rates. There are two metrics that can be used to measure call failure rates: 
- 
dropped calls: calls that cut out unexpectedly having been originally connected; and 
- 
blocked calls: calls that fail to connect with the recipient. 
 
We combine these metrics to calculate call completion success rates (CCSRs). In 
5.42
January 2014, we gathered dropped and blocked call data from the four MNOs. Comparative analysis was made difficult by the fact that the MNOs do not use consistent methodologies for deriving these failed calls statistics. There are also other key limitations with the data: 
- 
The MNOs are unable to gather data on call attempts made by users in areas with no coverage; and 
- 
there was no split made between urban and rural network performance. 
 
We therefore used data from a third party data provider, RootMetrics, to better 
5.43
understand the consumer experience. Their research was carried out by collecting 
call failure and success rates using application software installed on a set of standard phones that were used in a wide variety of locations.  
 
This methodology does have its limitations. It does not specifically differentiate 
5.44
between areas where MNOs do not claim to have coverage and areas where they do; nor does it reflect the success rate of incoming calls. Even so, there are distinct advantages to this method in terms of reflecting what consumers experience, because: 
- 
the same tests are run on all networks, so we can compare results between the MNOs; 
- 
call attempts made by users in areas with no coverage are measured; and  
- 
the same fixed line number is called to ensure consistency across tests, with no 
variation attributable to differing end network or lack of mobile network coverage for the called party. 

## Results Of The Exercise

 
The results of the testing suggest that rural areas suffer significantly more from 
5.45
dropped and blocked calls than urban areas. The difference in CCSRs between urban and rural areas was at its smallest for EE customers and was largest for 
Vodafone customers. 
 
Lower rural CCSRs are consistent with the fact that 2G coverage in rural areas is 
5.46
worse than in urban areas. 

## Coverage Of 3G Mobile Broadband Services 3G Coverage Is Lower Than Voice Coverage

 
All four MNOs provide 3G service. 3G networks provide high speed data 
5.47
transmission and multi-media applications, which enable consumers to watch, listen 
and read media content on the move. The MNOs also deliver voice services on 3G networks. A summary of 3G mobile network coverage is provided in Figure 47 below. 
 
84% of premises are in areas of outdoor coverage from all four MNOs and 99% are 
5.48
covered by at least one MNO. Geographic coverage is significantly lower than premises coverage: 22% of the UK's land area has no coverage from any MNO. 
 
3G coverage is relatively high on motorways: 83% of the length of UK motorways 
5.49
covered by all four MNOs. There is no motorway area without any coverage at all. 
9% of A and B road length is in a complete not-spot for roadside coverage, compared 
to 17% for in-car coverage. 

 
Complete 'notspots' 
Outdoor coverage Premises 
1% 
15% 
84% 
Geographic 
22% 
52% 
26% 
National roads coverage Motorways 
0% 
17% 
83% 
A & B Roads 
9% 
46% 
45% 
Indoor/In-car coverage Premises 
3% 
26% 
71% 
Motorways 
0% 
38% 
61% 
A & B Roads 
17% 
54% 
30% 

Source: Ofcom analysis of MNO data 
 

Partial 'not-spots' 
Covered by all 
four MNOs 

## 3G Coverage Varies By Nation

| England                 | Scotland    | Wales    | Northern Ireland    |
|-------------------------|-------------|----------|---------------------|
| No                      | All         | No       |                     |
| MNO                     |             |          |                     |
|                         |             |          |                     |
| MNOs                    |             |          |                     |
|                         |             |          |                     |
| MNO                     |             |          |                     |
|                         |             |          |                     |
| MNOs                    |             |          |                     |
| Covered by              |             |          |                     |
|                         |             |          |                     |
| Outdoor coverage        |             |          |                     |
| Premises                |             |          |                     |
|                         |             |          |                     |
| <1%                     | 87%         | 3%       | 75%                 |
| Geographic              |             |          |                     |
|                         |             |          |                     |
| 7%                      | 41%         | 49%      | 7%                  |
| National roads coverage |             |          |                     |
| Motorways               |             |          |                     |
|                         |             |          |                     |
| 0%                      | 86%         | 0%       | 67%                 |
| A & B                   |             |          |                     |
| Roads                   |             |          |                     |
|                         |             |          |                     |
| 3%                      | 59%         | 27%      | 19%                 |
| Indoor/In-car coverage  |             |          |                     |
| Premises                |             |          |                     |
| 2%                      | 74%         | 6%       | 64%                 |
| Motorways               |             |          |                     |
| 0%                      | 64%         | 0%       | 51%                 |
| A & B                   |             |          |                     |
| Roads                   |             |          |                     |
| 8%                      | 39%         | 40%      | 12%                 |

Source: Ofcom analysis of MNO data 
 
The map below shows how 3G coverage varies across the local authorities of the 
5.50
UK. 

| All    | No     | All    | No     |
|--------|--------|--------|--------|
| MNO    | MNOs   | MNO    | MNOs   |

## 3G Network Coverage

 
Over 99% of premises in urban areas are covered by at least one MNO's 3G network 
5.51
outdoors, compared to 95% of premises in rural areas. There is a larger difference in the number of networks available, however. 92% of urban premises can access all four MNOs' networks outdoors compared to 38% of rural premises. 56% of rural 
premises are in partial not-spots of 3G networks compared to 17% of 2G networks. 

 
Complete 'notspots' 
Partial 'notspots' 
Outdoor premises coverage 
Urban 
<1% 
8% 
92% 
Rural 
5% 
56% 
38% 
Indoor premises coverage Urban 
1% 
20% 
80% 
Rural 
18% 
66% 
16% 

Source: Ofcom analysis of MNO data 

 
Once again, there is a worsening of coverage when a user moves from outdoors to 
5.52
indoors.  

Covered by all 
four MNOs 

## 3G Coverage Varies Between Mnos

 
The reported coverage varies by MNO. 
5.53

 
O2 
Vodafone 
EE 
Three 
Outdoor coverage 
Premises 
91% 
87% 
98% 
98% 
Geographic 
44% 
33% 
74% 
68% 
National roads coverage 
Motorways 
91% 
87% 
100% 
100% 
A & B Roads 
61% 
51% 
88% 
87% 
Indoor/In-car coverage 
Premises 
84% 
76% 
93% 
93% 
Motorways 
76% 
72% 
99% 
98% 
A & B Roads 
44% 
37% 
78% 
73% 
Source: Ofcom analysis of MNO data 

 
EE has the highest geographic 3G coverage of the four MNOs, with 74% of the 
5.54
country's land covered. Vodafone has the lowest geographic 3G coverage at 33% of UK land area. However, when considering the number of premises that are covered 
(outdoors), all MNOs have levels of coverage exceeding 85%, ranging from 87%85 to 
98% of premises in the UK. 
 
This pattern is repeated on roads, where motorways are fully covered by EE and 
5.55
Three's 3G networks. O2 and Vodafone cover only 61% and 51% of UK A and B roads respectively. Indoor premises coverage of 3G networks is 93% for both EE and 
Three, but 84% for O2 and 76% for Vodafone. 

## Rural 3G Coverage Is Significantly Lower Than Urban Coverage For All Mnos, Especially Vodafone

 
All four MNOs have outdoor 3G coverage of over 90% of all urban premises. Rural 
5.56
coverage is more varied: O2 covers 62% of rural premises (outdoors), much less than the 90% rural coverage achieved by EE and Three. Vodafone has the lowest 
rural coverage, at 47%. Indoor premises coverage is significantly lower for all MNOs 
in rural areas. 

## Lower Frequency 4G Spectrum Is Likely To Help Extend Mobile Broadband Coverage

 
The majority of the spectrum used to deliver 3G services is in the higher frequency 
5.57
2.1 GHz band. The use of these higher frequencies makes it harder to achieve wide 
                                               
area coverage. The use of lower frequency 800 MHz spectrum by 4G services will help address this. In particular there is a coverage obligation in one of the 4G licences to provide 98% indoor coverage by the end of 2017.   

 
O2 
Vodafone 
EE 
Three 
Outdoor premises coverage 
Urban 
96% 
93% 
>99% 
>99% 
Rural 
62% 
47% 
90% 
90% 
Indoor premises coverage 
Urban 
92% 
84% 
97% 
97% 
Rural 
36% 
26% 
71% 
67% 

Source: Ofcom analysis of MNO data 

## Coverage Of 4G Mobile Broadband Services 4G Roll-Out Is Progressing Well

 
As with 3G, 4G is capable of support mobile data services but generally provides 
5.58
higher download and upload speeds. EE was the first MNO to launch 4G services in late 2012 using spectrum previously used for 2G services. This was followed by the auction by Ofcom of additional 4G spectrum in April 2013, which saw all four MNOs and BT awarded spectrum. 
 
Over the last few years there has been a concern that the UK is lagging behind other 
5.59
EU countries in terms of 4G rollout. However, as we set out below good progress is now being made with the practical rollout of 4G services and the UK is catching up 
fast. 
 
Given the rapid pace of change, we have collected data for both June 2014 and 
5.60
October 2014 in order to report the most up-to-date 4G coverage at the national 
level. The recent growth in coverage for each MNO's 4G premises coverage is 
shown in the table below: 

 
O2 
Vodafone 
EE 
Three 
June 2014 
43% 
37% 
68% 
N/A 
October 
2014 
51% 
51% 
70% 
N/A 
8% 
14% 
2% 
N/A 
Increase in coverage (percentage 
points) 

Source: Ofcom analysis of MNO data 

## Uk 4G Coverage

 
A summary of 4G mobile network coverage is provided in Figure 54 below. For the 
5.61
reasons explained earlier, the following tables exclude 4G coverage provided by Three. 

 
Complete 'notspots' 
Outdoor coverage 
Premises 
28% 
37% 
35% 
Geographic 
77% 
17% 
5% 
National roads coverage Motorways 
25% 
47% 
28% 
A & B Roads 
63% 
25% 
12%  
Indoor/In-car coverage 
Premises 
37% 
34% 
30% 
Motorways 
36% 
43% 
21% 
A & B Roads 
71% 
20% 
9% 

Source: Ofcom analysis of MNO data 

 
4G has now reached 35% of UK premises (outdoors) for Vodafone, O2 and EE 
5.62
combined. In some rural counties, 4G has not yet been rolled out (as of June 2014). 
These are shown in the map below.  

Partial 'notspots' 
Covered by Vodafone, O2 
and EE 
| England                 | Scotland    | Wales    | Northern Ireland    |
|-------------------------|-------------|----------|---------------------|
| No                      | 3 of 4      | No       | 3 of 4              |
| MNO                     |             |          |                     |
|                         |             |          |                     |
| MNOs                    |             |          |                     |
|                         |             |          |                     |
| MNO                     |             |          |                     |
|                         |             |          |                     |
| MNOs                    |             |          |                     |
| Covered by              |             |          |                     |
|                         |             |          |                     |
| Outdoor coverage        |             |          |                     |
|                         |             |          |                     |
| Premises                |             |          |                     |
|                         |             |          |                     |
| 25%                     | 39%         | 44%      | 34%                 |
| Geographic              |             |          |                     |
|                         |             |          |                     |
| 67%                     | 9%          | 95%      | 2%                  |
| National roads coverage |             |          |                     |
| Motorways               |             |          |                     |
|                         |             |          |                     |
| 25%                     | 32%         | 46%      | 26%                 |
| A & B                   |             |          |                     |
| Roads                   |             |          |                     |
|                         |             |          |                     |
| 53%                     | 18%         | 87%      | 6%                  |

 
The map below shows how 4G outdoor premises coverage varies across the local 
5.63
authorities. 

| No     | 3 of 4    | No     | 3 of 4    |
|--------|-----------|--------|-----------|
| MNO    | MNOs      | MNO    | MNOs      |

## 4G Networks Are Better Developed In Urban Areas

 
The difference between urban and rural 4G coverage is bigger than for 3G and 2G 
5.64
networks. This is because 4G roll-out is ongoing and operators have tended to focus on urban areas first. 78% of urban premises can receive a signal from at least one 
MNO outdoors compared to 33% of rural premises. As of June 2014, only 7% of rural premises can access EE, O2 and Vodafone's 4G networks (outdoors). 

 
Complete 'notspots' 
Partial 'notspots' 
Outdoor premises coverage 
Urban 
22% 
38% 
40% 
Rural 
67% 
26% 
7% 

## 4G Coverage Varies Between Mnos

 
There are currently significant differences in 4G coverage between MNOs (as of 
5.65
June 2014): 

Covered by O2, Vodafone and 
EE 
 
O2 
Vodafone 
EE 
Three 
Outdoor coverage 
Premises 
43% 
37% 
68% 
N/A 
Geographic 
9% 
7% 
19% 
N/A 
National roads coverage Motorways 
37% 
32% 
70% 
N/A 
A & B Roads 
18% 
14% 
33% 
N/A 
Indoor/In-car coverage 
Premises 
38% 
32% 
59% 
N/A 
Motorways 
29% 
24% 
59% 
N/A 
A & B Roads 
14% 
10% 
26% 
N/A 
Source: Ofcom analysis of MNO data 

 
EE currently has the highest level of 4G coverage. Its network covers 19% of the 
5.66
UK's land area and 68% of its premises (outdoors). Roll-out by the other 4G MNOs has started relatively recently, resulting in a limited coverage of less than 50% of premises for each of those MNOs. 
 
EE's 4G roll-out is more mature than that of the other three MNOs. As of June 2014, 
5.67
it covers 75% of urban areas and 28% of rural areas (outdoors). O2 and Vodafone cover 14% and 8% of rural premises and 47% and 41% of urban premises respectively. 

 
O2 
Vodafone 
EE 
Three 
Outdoor premises coverage 
Urban 
47% 
41% 
75% 
N/A 
Rural 
14% 
8% 
28% 
N/A 
 *Source: Ofcom analysis of MNO data* 

 
We will continue to monitor the roll-out of 4G networks and will report on progress in 
5.68
next year's Infrastructure Report update. 

## Enabling Further Improvements In The Mobile Coverage

 
It has been clear for some time that market-led developments in mobile infrastructure 
5.69
alone will not satisfy all demand and intervention is necessary to achieve sufficient coverage. As This section highlights developments in public sector interventions, as well as technological developments, that may improve the coverage of mobile services. 

## Our Spectrum Policy Aims To Improve Competition And Coverage

 
Mobile coverage is a major work area in Ofcom's current Annual Plan86, and is likely 
5.70
to remain a priority area of focus. Some recent policy decisions and initiatives on 
spectrum are helping to improve both indoor and outdoor coverage, by: 
- 
strengthening coverage obligations for mobile licences. We have included 
more extensive coverage obligations in particular licences. For example, O2's 4G licence awarded last year (in the 800 MHz band) included a requirement to provide 98% indoor coverage. 
- 
making additional sub-1 GHz spectrum available. Low frequency spectrum is 
targeted because it has good propagation characteristics. The last significant release of low frequency spectrum was the 800 MHz band, sold in the 4G auction following digital television switchover. We recognise that demand for 
mobile broadband continues to grow, meaning more spectrum is needed for both coverage and capacity reasons. Hence we are looking at further spectrum releases: for example, we are aiming to make the 700 MHz band currently used 
for DTT available for mobile broadband use from 2022.87  

## The Government Has Set Out Initiatives To Increase Coverage Mobile Infrastructure Project

 
The Mobile Infrastructure Project88 is a Government initiative to increase mobile 
5.71
coverage in areas that are poorly served. It is spending £150 million to deliver mobile voice services for up to 60,000 premises that have not previously had this option from any MNO. It also aims to improve coverage on at least ten of the UK's busiest A-roads.  
 
We reported last year on the first site that went live in September 2013 in 
5.72
Weaverthorpe, North Yorkshire. It provides mobile coverage to 200 premises in what was previously a complete not-spot. In September 2014, the Government announced that a further 200 premises in North Molton, Devon, and a large section of the neighbouring Exmoor National Park, are now receiving a mobile signal following 
another new site being activated in the area. The remaining sites in the project are due for completion by 2016. 

## Improvement Of Train Coverage

 
The Department for Transport (DfT) is working with Network Rail to improve mobile 
5.73
services on railways. Under its plan, Government aims to improve coverage to 70% of the travelling public. The DfT is also planning to invest £53m to improve Wi-Fi 
access on trains.89 

## Tackling Partial Not-Spots In Mobile Phone Coverage

 
The Government is considering plans for those areas of the UK where consumers 
5.74
receive coverage from some, but not all, of the four MNOs. In early November 2014, 
Government launched a consultation on various legislative proposals to achieve these aims.90 The options focus on: 

- 
National roaming: this allows consumers' mobile devices to roam on other 
MNOs' networks, if their own provider's network is not available. 
- 
Increased infrastructure sharing: this allows MNOs to attach their equipment 
to other MNOs' masts. Some level of infrastructure sharing is already taking place and is described earlier in this chapter. 
- 
Broader based virtual networks: MVNOs currently agree wholesale access 
terms with a single MNO. The Government proposes that MVNOs could be able to offer devices that access all four MNOs. More detail on MVNOs and wholesale access is described later in this chapter. 
- 
Coverage obligations: MNOs would have to cover an increased percentage of 
the UK in total, but the MNO would have freedom to decide exactly how this 
enhanced coverage would be delivered. The advantage of this approach is the MNO can choose the most efficient combination of network options, such as more commercial site sharing, increased mast height or higher transmitter power. Coverage obligations, based on premises coverage, have already been 
attached to all four 3G licences, and to O2's 4G licence. 

## Alternative Network Technology Can Also Improve Coverage Femtocells

 
Femtocells are small, low-powered base stations, installed indoors to improve mobile 
5.75
coverage in the home. They are short-range devices and work by connecting to the host mobile operator network via a fixed broadband connection. They can be a technically robust way to extend indoor coverage in remote areas with poor coverage. 
 
Vodafone, EE and Three offer femtocells to their customers and their number is 
5.76
increasing.  Our data shows that between 2013 and 2014, the number of femtocells 
in the UK has risen from 300,000 to over 400,000.  
 
The use of femtocells to address poor coverage in rural areas has generally grown 
5.77
and in England and Scotland specifically has quadrupled in comparison to urban areas. The greatest concentration per premises is in the Shetland Isles, with 113 femtocells per 1,000 premises. 
 
In addition to the benefits of residential femtocells MNOs are using similar technology 
5.78
to provide localised coverage in public spaces. For example, Vodafone's Rural Open 
Sure Signal has provided 3G connectivity to rural areas as a community-led trial in 12 
communities, including one in the Shetland Isles. In July 2014, Vodafone announced that it will extend the trial to 100 communities in rural areas. 
 
Early in November 2014, Minchinhampton in Gloucestershire became the first of 
5.79
these communities to benefit. The Open Sure Signal femtocells can be installed in any area where a fixed connection is available. This includes telegraph poles, shops and pubs. 

## Repeaters

 
Mobile cellular repeaters (also called 'boosters' and/or 'coverage enhancers') are 
5.80
devices which receive, amplify and re-transmit the signals from mobile base stations. Their purpose is to enhance mobile signals in areas where they are weak, such as indoors, in sports stadia and in shopping centres. 
 
MNOs also use 'smart repeaters', which are different from cellular repeaters. They 
5.81
can be remotely controlled and configured. For example they can be remotely turned off if they are causing interference. 
 
Repeaters can be a useful means of extending coverage. However, repeaters can 
5.82
also cause interference and therefore their use has to be closely controlled. In the UK, the use of a repeater must be either licensed by Ofcom, or specifically exempted from such licensing under section 8 of the Wireless Telegraphy Act 2006 (WT Act 2006). The use of any such device other than under and in accordance with a licence is liable to be a criminal offence, unless an exemption applies (and the use complies with the terms of any exemption). 
 
We issued a call for inputs earlier this year on the availability of suitable devices. The 
5.83
key purpose of the call for inputs was to find out whether, and in what circumstances, repeaters may form part of the solution in improving coverage without having adverse 
effects, alongside other solutions for improving coverage and, if so, would it be appropriate to allow consumers to buy and deploy smart repeaters rather than MNOs. We are currently considering the responses we received with a view to deciding whether our current policy position needs to be reviewed. 

## Infrastructure Sharing And Wholesale Access Infrastructure Is Shared Under Two Major Commercial Arrangements In The Uk

 
There are two network sharing arrangements between the four Mobile Network 
5.84
Operators in the UK. EE and Three have a joint venture called MBNL. Vodafone and O2 have a site sharing arrangement called Cornerstone which has been extended by Project Beacon into a broader based joint venture. These projects help MNOs to reduce the costs of network roll-out and maintenance. 
 
The MBNL joint venture was formed in 2007 by T-Mobile (now part of Everything 
5.85
Everywhere) and Three. They have a national Radio Access Network (RAN) sharing agreement, sharing both passive and active network equipment. Each MNO 
maintains control of their spectrum for 3G services. This allows for efficiencies in network deployment and maintenance, while retaining the scope of service differentiation between the MNOs.  
 
In February 2014 EE and Three announced a change in the sharing arrangement for 
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the roll-out of their 4G networks.  Rather than extending their RAN sharing agreement for their 4G roll-out, the two networks will only share passive infrastructure such as masts and backhaul links from the site. This arrangement means the network operators have more flexibility in their 4G network roll-out 
strategy.  
 
Vodafone and O2 have a similar sharing arrangement to EE and Three, but applying 
5.87
to their 4G networks as well. They have created a joint venture for shared passive infrastructure. They have split the responsibility for network deployment into geographic areas. Vodafone is responsible for the west of the UK and O2 maintains the network in the east of the UK and in Northern Ireland.  They share use of the 
network, which one or the other is responsible for maintaining.  

## Mvnos Access The National Networks Through Wholesale Access

 
The four MNOs provide wholesale access to other mobile service providers. These 
5.88
are called Mobile Virtual Network Operators (MVNOs).  Examples include 
supermarkets offering mobile services (Tesco, Asda); fixed communication providers offering 'quad-play' (fixed broadband, TV, fixed phone line and mobile) such as Virgin 
Mobile, TalkTalk and BT; and MVNOs focussed on international calls such as 
Lycamobile and Lebara. The MNOs have reported a total of 41 direct MVNO customers. Most of these MVNOs provide a similar service of voice, SMS and data, though some are more specialised.   
 
The proportion of voice minutes used by MVNO customers has not changed since 
5.89
2011, at 16% of total mobile voice minutes. However, the proportion of total mobile data used by MVNOs has fallen to 7% (from 14% in 2011). This suggests that MVNO networks are more targeted at voice call markets, or that their service propositions, 
including a sometimes more limited set of options with respect to bundled handsets lead to a higher proportion of such customers. SMS used by MVNO customers made 
up approximately 7% of all SMS on mobile networks.   

## The Use Of Mobile Broadband Data Continues To Grow But Sms Messaging Has Reduced

 
The take-up of mobile service subscriptions has been relatively static over the last 
5.90
three years. 

 
Q1 2014 
2013 
2012 
2011 
83.2 
83.1 
83.4 
82.4 
Active mobile subscriptions 
(millions) (average over the year) 
134.2* 
134.1 
132.3 
131.5 
Annual Mobile voice call minutes 
(billions) 
125.1* 
129.9 
171.9 
171.7 
Annual SMS messages sent 
(billions) 

Source: Ofcom, Communications Market Report 2014 (*Annual Q1 2013 to Q1 2014, Ofcom, Telecommunications Market Data update Q1 2014)  

 
The number of active mobile subscriptions fell for the first time in 2013, but only 
5.91
slightly: down from 83.4 million in 2012 to 83.1 million in 2013. The number of mobile voice call minutes has risen slightly from 132.3 million to 134.1 million in 2013. 
 
The number of SMS messages sent between 2011 and 2012 remained steady at 172 
5.92
million. In 2013, only 130 million SMS messages were sent, most likely due to substitution by IP-based messaging programmes such as Whatsapp and Kik. 
 
The MNOs provided information on mobile data use gathered from the throughput 
5.93
measured on their mobile transmitters. The numbers include data consumption by both residential and business customers. They also include customers of Mobile Virtual Network Operators (MVNOs), who operate retail mobile services through wholesale access provided by the MNOs. 
 
The numbers do not include data 'offloaded' by mobile device users onto private and 
5.94
public Wi-Fi. This is because when consumers use mobiles over Wi-Fi, the connection is not provided by the mobile network provider. 
 
There has once again been a significant increase in the amount of mobile data 
5.95
downloaded and uploaded. The average data throughput per premises increased by 
55%, to 1,567Mb per premises in the UK. Data use continues to be lower on average in Scotland, Wales and Northern Ireland, but all three nations experienced growth in data use of more than 49% in the last year. 

 
June 
Active connections (millions) 
83.2* 
82.7 
82.2 
81.1 
Total data uploaded/downloaded (GB, 
millions) Data per active connection (GB) 
0.53 
0.35 
0.24 
0.11 
Percentage of data transferred between 
6pm and midnight 

 
Overall data usage has increased from 28.9 million GB to 44.3 million GB (53% 
5.96
increase). The data throughput per active connection has increased from 0.35GB per active SIM to 0.53GB per active SIM. This is due to a large increase in data use from 28.9 million GB in June 2013 to 44.3 million GB in June 2014. However, there was no 

| June    | June    | March    |
|---------|---------|----------|
| 2014    |         |          |
|         |         |          |
| 2013    |         |          |
|         |         |          |
| 2012    |         |          |
|         |         |          |
| 2011    |         |          |
|         |         |          |
| 44.3    | 28.9    | 19.7     |
| 33%     | 31%     | 31%      |

significant change in the proportion of data downloaded and uploaded in the peak period.  

 
The growth in mobile data use is correlated with the increasing popularity of 
5.97
smartphones over the last three years. 27% of adults had a smartphone in 2011, with less than 2% of adults owning a tablet. This year, 61% of adults own a smartphone and 44% own a tablet. As more devices that are able to connect to mobile networks become more popular, more data use on mobile networks seems inevitable. 
 
Source: Ofcom, Communications Market Report 2014 

## Traffic Mix Has Remained Fairly Stable Since Last Year, Despite Roll-Out Of 4G

 
The proportion of total data use made up of web browsing and online video is similar 
5.98
to 2013. MNOs are still in their initial phase of 4G network roll-out.  Around 8% of all 
active mobile subscriptions are 4G91. Therefore it is too early for 4G customers to 
have a significant impact on the overall traffic mix on mobile networks. 
 
Consumers' use of data is not only limited by the network technology choice. MNOs 
5.99
can also impose caps on package, which constrain how much mobile data consumers will use.  
 

% of data in 
Traffic type 
% of data in 
2014 
2013 
Video including streaming 
applications 
39% 
40% 
Web browsing 
42% 
42% 
2% 
8% 
Peer to Peer including Bit Torrent applications, file transfers and 
newsgroups 
Other including VoIP, online gaming 
and email.  
17% 
10% 

Source: Ofcom analysis of MNO data 

## Roadmap For Future Developments Newer 4G Technology Is Being Rolled Out

 MNOs are currently working to improve mobile broadband download speeds by 
5.100
deploying "LTE Advanced" 4G technology. This can significantly improve on the original 4G, meaning peak download speeds of 150 Mbit/s and beyond.  
 In October 2014, two MNOs announced the roll-out of LTE Advanced (sometimes 
5.101
called 4.5G or 4G+). EE has rolled out this newer technology to areas of Central 
London, with a plan to cover Greater London and other cities in 2015.92 Vodafone 
also planned to roll out the technology to Birmingham, Manchester and London over 
November, with other cities expected to receive the upgrade during the rest of the 
year and in 2015.93 
 The underlying approach used is known as 'carrier aggregation' and uses spectrum 
5.102
from two bands (as opposed to one) simultaneously. For EE, this means that customers' devices use 2600 MHz spectrum as well as 1800 MHz. For Vodafone customers, their devices will use both 800 MHz and 2600 MHz. In both cases, this 
means increased capacity allowing, according to EE, peak download speeds of up to 150Mbit/s. The theoretical maximum is 300Mbit/s, but this requires the use of large amounts of spectrum. 

## More Research Is Developing The Next Generation Of Mobile Technology

 Looking further forward, research on the fifth generation of mobile technology is 
5.103
underway, although it is not clear at this stage what the outcome in technology standards or implementable systems will be. The world's first dedicated 5G centre (5GIC) is located at the University of Surrey, which won a funding programme to 
establish the centre94. It is working in partnership with a range of industry 
stakeholders, including three of the UK's MNOs, in order to develop solutions and standards for 5G networks. 
 5GIC has developed a core research programme with the aim of finding efficient 
5.104
solutions for the following: 
- 
higher spectral efficiency; 
- 
low latencies; 
- 
energy efficiency; 
- 
reduced cost of ownership of the network; and 
- 
ensuring that network and spectrum resources are dynamically deployed so that all users have the impression that there is always sufficient capacity in the 
network to meet their needs, whatever they may be doing. 
 As well as focusing on the consumer, the research will also investigate human-to-
5.105
device, device-to-device, and human-to-human communications. The centre is 
establishing a test bed which is expected to go live for trials from April 2015 onwards. Other initiatives focussing on 5G include the European 5G Public-Private 
Partnership, 5GPPP, and the global initiative, Next Generation Mobile Networks (NGMN). 
 There are still uncertainties about the likely timing for the commercial roll-out of 5G. 
5.106
However, both the European Commission95 and the Government are targeting 2020. 
Huawei has also set out a roadmap that estimates deployment of 5G from 2020 
onwards.96 
 We will continue to consider the implications for spectrum and physical infrastructure 
5.107
required for the development of new mobile technology.   
 In addition to providing potentially improved mobile performance, 5G technology may 
5.108
also open up new wireless access network solutions for providing ultrafast broadband connectivity to homes and business as an alternative to fibre to the premises solutions. 

## 'The Internet Of Things' Is Becoming A Reality

 As seamless connectivity becomes a reality it is likely that more devices will connect 
5.109
wirelessly to each other without direct user intervention. 'The internet of things' (IoT) 
is a term that describes how devices can be connected to a network and 
communicate with each other without human intervention. This is also referred to as 
machine to machine (M2M) communications.  
 IoT is being driven by the falling cost of sensors, processors and bandwidth. There is 
5.110
no single standardised approach; IoT devices currently use a range of technologies 
to communicate, from data (on mobile networks shared with other users) to dedicated networks rolled out for IoT applications only.  

## Examples Of Iot

 IoT is already with us.  
5.111

                                               
- 
One common use is in wearable technologies such as fitness bands and smart watches.  
- 
Devices within homes are also becoming connected for energy control and 
security devices. Smart thermostats have the ability to switch a home's heating on or off remotely by using a smartphone, and sensors could be used to learn when a user wakes up or leaves the house.  
- 
Smart energy metering is also the focus of a major IoT undertaking. Around 53 million smart electricity and gas meters are to be rolled out to residential and small businesses around the UK, with the promise of making billing easier and energy use easier to manage.  
- 
Motoring is also seen as an area for IoT growth, with applications in parking meters, traffic control and car parks. For example, BT is trialling the use of smart 
parking in Milton Keynes.97 It has installed small sensors in parking spaces that 
can detect if vehicles are parked over them. The data they gather can then be sent back to a central server, to present live information about available parking spaces to drivers in the city.  

## Infrastructure Requirements

 Although most IoT devices will need only a small amount of bandwidth, in order to 
5.112
succeed they will require reliable, low-cost, low-energy connections. Otherwise, they 
will be too impractical and expensive to achieve widespread adoption.  
 Each type of IoT application has its own network demands. Aegis Systems, working 
5.113
with Machina Research, reported for Ofcom on spectrum requirements and 
summarised these applications into eight categories (below).98  
 
Source: Aegis Systems/Machina Research 

 Figure 67 shows that the vast majority of IoT applications require very low bandwidth. 
5.114
Within these narrowband applications, there are a variety of service requirements. 
They range from applications with low-reliability needs, such as fitness monitoring, to applications where reliability is critical, such as a fire alarm system, or the outputs of 
a heart monitor.  
 Other IoT applications have higher bandwidth requirements. Typically, these involve 
5.115
streaming video, such as for CCTV or a live advertising display. The need for a range of different types of infrastructure is emphasised by IoT infrastructure providers such as Arqiva, who told us that no single access technology will support all solutions, and that its customers are instead opting for a mixed set of access technologies. 

## Networks For The Iot

 There are a number of networks that can provide IoT services:  
5.116

- 
Wi-Fi, and other networks using licence-exempt spectrum. Applications 
requiring short-range connectivity can use existing technologies that do not need licensed spectrum, such as Zigbee, Bluetooth and Wi-Fi.  
- 
Mobile networks. Mobile network operators can use their existing networks to 
provide coverage for IoT services. Some dedicated IoT providers buy wholesale 
data services from mobile operators to provide this connectivity. In order to operate on a mobile network, each device usually needs a SIM. Less than 5% of 
SIMs issued by mobile operators are known by the operator to be used for an 
IoT application. Since most IoT devices have very low bandwidth applications, operators typically reported that less than 0.2% of data and SMS on their networks was being used for IoT applications. Therefore, they do not currently have a significant impact on the capacity of the network.  

- 
Non-mobile networks. IoT connectivity is also available from operators that do 
not have a mobile network. For example, Arqiva has partnered with a connectivity provider, SIGFOX, to build a network for IoT (see box). Arqiva 
already provides much of the infrastructure behind TV, radio and wireless communications in the UK, so the fact that it is moving into the provision of IoT infrastructure underlines the area's potential for growth. Others, including BT's 
trial in Milton Keynes, mentioned above, are making use of locally unused resources such as 'white space' spectrum. Other non-mobile technologies 
include 'weightless99' and wireless mesh networks; some of which are designed 
to operate in dedicated spectrum bands, such as the 868MHz and 870-876MHz 
bands. These dedicated networks have been designed to minimise power 
consumption so that the costs of maintaining the devices can be reduced.  

## A New Nationwide Network For Iot

Arqiva is already a major provider of M2M communications services; it won one of the three UK contracts for the installation of smart meters, and is running a dedicated VHF network to track stolen vehicles. Arqiva has partnered with a French network and connectivity provider, SIGFOX, to build new UK infrastructure for IoT. SIGFOX networks are already deployed in France, the Netherlands and Spain, and from 2015 a network will begin rolling out in the UK. Arqiva intends to focus initially on large cities: Birmingham, Bristol, Edinburgh, Glasgow, Leeds, Leicester, Liverpool, London, Manchester and Sheffield. It sees growth in IoT implementation driven by a number of factors including public policy (e.g. smart meters), the falling cost of IoT sensors and modules, leading to their inclusion as standard in devices, and by the provision of new services built on the data from sensors The aim is to build a low-cost, low-power network that can relay small amounts of information from sensors; the network will also connect the UK to SIGFOX's global IoT 
network. The solution is likely to be suitable where sensors transmit small amounts of information, and could be suitable for property applications, smart cities, logistics, manufacturing and consumer electronics. Arqiva told us that the new network will make it commercially viable for the first time to connect together small, low-bandwidth sensor devices, which Arqiva sees as the part of the IoT market with the greatest growth potential. 

## Ofcom'S Role

 The introduction of IoT devices has the potential to deliver significant benefits to 
5.117
citizens, consumers and businesses across a wide range of industry sectors. Therefore, Ofcom is keeping under review the extent to which there may be barriers 
preventing the roll-out of IoT technologies and, where appropriate, considering how 
such barriers may be lessened or removed in the areas where we have direct responsibility (such as the availability of spectrum, numbering, addressing and 
resilience). We also intend to consider those areas where it may be appropriate for Ofcom to work with other regulators and public bodies. 

 We recently published a Call for Inputs100 asking for views about the likely IoT 
5.118
requirements for: spectrum, numbering and addressing, consumer privacy, and 
network security and Ofcom's potential role in this area. This consultation recently 
closed and, subject to the responses received, we expect to publish details of our 
next steps early in 2015.    

## Mobile Spectrum Use

 This section sets out the state of spectrum use in the UK. The holdings of spectrum 
5.119
as of June 2014 are set out in Figure 68 below: 
 

 EE began rolling out 4G mobile services in November 2012 using 1800 MHz 
5.120
spectrum previously used for 2G services. Other MNOs and EE were awarded spectrum in the 800 MHz and 2600 MHz bands in March 2013 following the 4G 
mobile spectrum auction in order to roll out 4G networks. 
 The table below shows the networks operated within the spectrum owned by MNOs 
5.121
(bold indicates significant operations): 
 As 4G roll-out progresses, we will monitor use of the spectrum allocated through the 
5.122
4G mobile auction. While operators will continue to improve their networks, extra spectrum may also be required. We will auction additional spectrum in the 2.3GHz and 3.4GHz bands in 2015/16 and will make the 700MHz band available for mobile data from 2022 or earlier if possible. We are also considering a number of other 
longer-term spectrum options, and are working to ensure that the necessary 
international agreements are in place to enable their use. 

## Wi-Fi

 Wi-Fi is a local area wireless technology that enables devices to connect to the 
5.123
internet using high frequency spectrum. It is increasingly common as the in-home means of connection to a fixed broadband service. It is often also available publicly (sometimes free of charge) at Wi-Fi 'hot-spots'.  
 As streaming video onto mobile devices (including tablets) has become more popular 
5.124
in recent years, Wi-Fi has become increasingly important as a way to "offload" data 
use without breaching caps on download data imposed by MNOs. In the CMR we 
reported that 81% of consumers use Wi-Fi, with the majority using Wi-Fi at home.101 
Therefore, some mobile operators are using the ubiquity of Wi-Fi to improve access to mobile voice and SMS services. Both O2 and Three offer an app which allows their customers to make and receive calls and SMS. EE is due to launch a similar 
tool later this year.102 
 11% of consumers use Wi-Fi in a public place.103 12% of them use a smartphone to 
5.125
access public Wi-Fi, with just 2% and 3% using a laptop and tablet respectively. The most common locations were cafés and bars, which accounted for 64% of those who use public Wi-Fi. 
 The majority of activities carried out by those who use Wi-Fi out of the home (public 
5.126
as well as transport-based, work and abroad) are low bandwidth. This includes 
activities such as checking emails, social networking and browsing websites. On the other hand, streaming and downloading of multimedia content such as video and audio is less common, with only 12% of those who use Wi-Fi out of the home ever 
undertaking it. 
 The number of hotspots counted for public Wi-Fi has increased by 23% from last 
5.127
year. Our data gathered from the major Wi-Fi network providers shows that 2.3 
million GB of data was uploaded and downloaded on the public hotspots in June 
2014. This is an increase compared to June 2013 but at a lower growth rate than the previous year, slowing from almost 100% increase last year to a 49% increase this year.  

  
June 2014 
June 2013 
No. of public Wi-Fi hotspots 
41,798 
33,851 
Total data uploaded/downloaded 
(GB) 
2,262,049 
1,514,630 
Data per Hotspot (GB) 
54 
45 

 Access to public Wi-Fi spots can be: 
5.128
- 
free of charge: e.g. Wi-Fi access on Westminster Public Wi-Fi;  
- 
bundled with mobile or broadband subscription: e.g. access to Wi-Fi on the 
London Underground is free for Virgin Media, EE, O2, Vodafone customers and Three customers; 
- 
chargeable by time period: e.g. use of BT Wi-Fi is £4 for a 1 hour or £39 for 30 
days  
 The data we collect shows a significant increase in the number of public Wi-Fi 
5.129
hotspots, from 34,000 last year to around 42,000 this year. For this report, we gathered data from the main fixed and mobile operators that provide public Wi-Fi 
hotspots in the UK.105 
 While this may represent a significant proportion of public Wi-Fi hotspots, there is a 
5.130
long tail of Wi-Fi providers not included in this analysis. For example, public Wi-Fi 
provision in cities such as Derby, as a part of the 'Super Connected Derby'106 
initiative, and Mansfield107 is not included, as these are provided and maintained by 
other operators. Other schemes include those in Glasgow, Cambridge, Birmingham and Newry. Our data also does not include Wi-Fi hotspots provided on buses and trains. 
 Other data sources indicate that the number of Wi-Fi hotspots when other 
5.131
commercial and public sector providers are included may be in the region of 200,000 
in the UK.108 However, even these numbers do not include the BT FON109 network, 
which are public Wi-Fi access points shared via residential and business customers' 
Wi-Fi routers. BT claims there are around 3.5 million of these across the UK.110  
 Most public Wi-Fi hotspots are in urban areas, predominantly in high street locations 
5.132
such as fast food chains, hotels and coffee shops.  Our analysis suggests that over 16% of all public Wi-Fi hotspots are in London. Only 10% of all public hotspots are in rural areas (compared to 7% in 2013) with around 12% of the overall data consumed via these rural hotspots.  

## Seamless Connectivity Between Hotspots

 There have been initiatives from the industry to enable seamless connectivity 
5.133
between Wi-Fi hotspots. Passpoint111 is a standard which is being promoted by 
global Wi-Fi network provider association, Wi-Fi Alliance, to achieve this objective. 
One of the operators has reported that they plan to introduce Passpoint technology on their hotspots, but only once some technical issues are resolved. Other providers are already deploying alternative authentication technologies which also allow users to automatically log on to the network when Wi-Fi is available, for example via a Wi-
Fi app. 

## Use Of Unlicensed Spectrum For Wi-Fi

 Wi-Fi is provided over two licence-free spectrum bands, at 2.4 GHz and 5 GHz. The 
5.134
spectrum band at 2.4 GHz is more widely used as it has been available for longer and there are more compatible devices. However the popularity of this band also 
causes congestion as many users try to use this limited resource at the same time. The unlicensed band at 2.4 GHz is also shared with other applications which may lead to interference. 

 To meet the increasing demand for data, Wi-Fi is also available at 5 GHz and there 
5.135
are an increasing number of devices and routers enabled to use it. At this higher frequency, faster data rates are available and there is a lower risk of interference with other 5 GHz Wi-Fi sources or with other devices which share the same frequency at 
2.4 GHz. A number of fixed broadband providers, including BT, KCOM, TalkTalk and Virgin Media are beginning to provide their customers with Wi-Fi routers which are 
able to use both 2.4 GHz and 5 GHz Wi-Fi. Around 26% of residential fixed line users 
are using an operator--provided Wi-Fi router with this capability.   
 Public Wi-Fi hotspots are also making greater use of the 5 GHz band. Wi-Fi at both 
5.136
2.4 GHz and 5 GHz are available from some of the main providers of public Wi-Fi, 
such as BT, O2 and Sky.  Some of these providers were not able to provide a breakdown of the proportion of traffic that was carried over the 5 GHz band compared to the 2.4 GHz. Of those that were able to report on this breakdown, one suggested that approximately 25% of the Wi-Fi data was carried over the 5 GHz. Another, providing information about Wi-Fi use at a number of major train stations, 
reported that over 60% of data was carried over the 5 GHz band. 

## 6 Broadcast Networks Overview

 
At first glance, fixed and mobile telecommunications have seen more significant 
6.1
developments in recent years than the UK's broadcast infrastructure.  
 
Most TV and radio continues to be consumed through traditional linear112 
6.2
broadcasting platforms. The number of channels, and the main platforms used to deliver them, (i.e. terrestrial, satellite and cable), are largely the same.  
 
However, this relatively quiet period may now be changing. This section highlights 
6.3
three underlying trends that are increasingly affecting how consumers access and use TV and radio services. We also consider the future implications for TV delivery 
infrastructure. These trends include: 
- 
A migration towards increasingly higher-resolution TV. The penetration of 
high-definition (HD) TV has reached 69% of TV households, supporting a 
greater use of high-definition TV services. Indeed, the focus now is moving to the next generation of HD ('4K') which will ultimately offer four times the resolution of HD, higher frame rates, and even-better picture contrast and colours.  
The first 4K trials took place in the UK in 2014, and research and development has already begun on 8K TV. Although these higher-resolution picture formats require more bandwidth, this is being offset by more efficient transmission video compression technologies, and the availability of higher-speed broadband connectivity. 

- 
Growth in broadband delivery of TV services. A wide range of IPTV and 
over-the-top (OTT) services113 is now available in the UK, ranging from linear 
channels delivered over operator-managed IP networks (such as BT Sport over 
BT YouView) to on-demand content that is provided over the top of a broadband network (e.g. BBC iPlayer). These services are placing both increased capacity 
and speed requirements broadband infrastructure. The extra demands are being met by the roll-out of superfast broadband and the use of content delivery networks (CDNs), device caching and multicast technologies.  
Over time, more consumers may come to regard broadband TV services as a replacement for broadcast TV. For example, it is interesting that the proportion of UK households with TVs is decreasing, albeit slowly, and that there are now nearly one million UK households that are broadband-only homes.114 

- 
The increasing consumption of TV and video over mobile networks. Highcapacity mobile video services are driving much of the increased consumer 
demand for mobile data capacity. To help meet this demand, mobile operators are using a combination of more sites, more spectrum and more efficient LTE 
(4G) technology, as well as offloading traffic onto fixed broadband networks 
using Wi-Fi. A further development is a new LTE broadcast solution, trialled in the UK in 2014, with the potential to deliver live linear TV services more efficiently in high-demand locations such as sports stadia.   

 
We also discuss developments in listening to radio and other audio services, and 
6.4
how in some respects this is changing faster than TV viewing.  
 
This chapter is structured as follows: 
6.5
- 
Consumer context 
- 
Coverage of different TV platforms 
- 
Capacity of different TV platforms 
- 
Emerging trends in how TV is viewed  
- 
Developments in radio listening  

## Consumer Context Tv Platform Take-Up

 
When we published our previous full infrastructure report in 2011, digital TV 
6.6
switchover was almost complete. The task was concluded in October 2012, a 
landmark moment when digital terrestrial TV (DTT) coverage was extended to more 
than 98.5% of UK households.  
 
This not only led to a greater choice and competition in digital TV delivery platforms, 
6.7
but also released valuable UHF spectrum for mobile broadband use. Some is now 
being deployed to support the roll-out of 4G mobile broadband (LTE) services in the 
UK (see section 5).  
 
Figure 73 (above) charts the growth of digital TV since 2001, and the past and 
6.8
current breakdown in consumer take-up of different TV platforms. This shows that 
DTT, satellite and cable delivery platforms all play a significant role in delivering digital TV services.  
 
On average, people in the UK watch around four hours of television a day, with live 
6.9
linear viewing remaining the main way of consuming TV. Although the level of TV viewing reduced by approximately 4% in 2013, it is not yet clear whether this was the beginning of a longer-term trend or merely a temporary variation. Younger people 
watch less TV than the older age groups in total, and only half of viewing by 16-24s is 
live linear TV (see below). We don't yet know whether younger people will continue these habits as they grow older (i.e. whether this is a cohort effect) or whether they 
will eventually adopt similar viewing habits to present-day older groups.  

350
343 
345 
347 
341 
Adults 65+
315 
314 
311 
316 
314 
309 
306 
301 
294 
301 
300
268 
264 
263 
271 
278 
279 
250
241 
242 
243 
242 
253 
255 
269 
270 
269 
256 
222 
219 
216 
218 
225 
225 
242 
242 
241 
232 
Adults 55- 64 Adults 45- 54 Individuals
200
222 
220 
216 
217 
219 
217 
234 
232 
227 
216 
211 
208 
200 
198 
205 
204 
199 
196 
196 
185 
156 
157 
155 
151 
150 
154 
169 
165 
157 
148 
150
144 
135 
132 
134 
139 
137 
151 
147 
142 
134 
100
50
Adults 35- 44 Adults 25- 34 Adults 16- 24 Children

 
Source: Ofcom, Communications Market Report 2014 
 

## Coverage Of Different Tv And Radio Delivery Platforms

 
Figure 76 shows the estimated levels of coverage achieved by different broadcast 
6.10
platforms. These have not changed significantly for the DTT, satellite and cable 
digital TV delivery platforms since our last infrastructure report. However, as we set out in the box below, we now know more about the practical levels of coverage 
achieved by DTT and satellite.    

  
UK 
England 
Scotland 
Wales 
N Ireland 
44% 
47% 
35% 
21% 
26% 
Virgin Media 
(cable) Satellite  
98% 
no data 
no data 
no data 
no data 
DTT PSB muxes 
99% 
99% 
99% 
98% 
97% 
DTT 6 muxes 
89% 
91% 
87% 
71% 
72% 
DTT 7 muxes 
76% 
79% 
77% 
45% 
54% 
BBC DAB  
95% 
96% 
95% 
88% 
84% 
Digital One DAB 
90% 
92% 
83% 
65% 
79% 

Source: Ofcom from operator data and UK planning model, CMR 2014 % of households. UK figures are aggregated from local authority level data - hence there may be slight variations compared to other sources of DTT and DAB coverage information. 

## Comparing The Practical Extent Of Dtt And Satellite Coverage

In assessing the practical extent of digital terrestrial and satellite coverage, caution is needed. In particular, the satellite coverage figures shown in Figure 76 should be viewed as the maximum theoretical level achievable. These estimates are calculated using a number of assumptions about the typical receiver installation used by consumers. In practice, both DTT and satellite coverage can generally be improved by using a higher-gain and/or higher-height antenna installation. Following digital switchover, coverage of DTT is estimated at over 98.5% of households. This assumes that a standard-gain DTT aerial at a height of up to 10m is used by all DTT households. In practice, higher-gain, higher-height aerials are used by some households to improve reception in weaker signal strength areas; this has the effect of increasing the proportion of households potentially able to receive DTT to more than 98.5%. 

If satellite coverage was also based on the use of standard satellite installations, the predicted level of satellite coverage would probably be lower than that in the table above. This is because the higher frequencies used to deliver satellite services require a clear lineof-sight path to the satellite, and can be blocked by hills, buildings or trees. To overcome them, a higher satellite dish installation, or locating dishes away from buildings and trees, may be required. These non-standard installations may also be needed to reduce the visual impact on listed buildings, in conservation areas, and in national parks, and can increase costs for consumers. Flats, or multiple dwelling units (MDUs), present another potential problem for satellite reception. Less than half of the 5.8 million households in MDUs are estimated to have access to an internal distribution system configured for satellite reception, although most do have one for DTT reception. While an increasing number of MDUs are now being fitted with an internal satellite distribution system and many of the individual flats can install their own satellite dish, they may be constrained by cost, planning, landlord or line-of-sight issues - again, lowering the practical level of satellite coverage. In conclusion, the difference between the current level of coverage achieved by DTT and satellite is likely to be greater than shown in the table above if we assume that standard installations are used for both, and if access to services in MDUs are taken into account. 

However, it should be noted that there are places that cannot get DTT reception but can use satellite (as well as *vice versa*) - showing the important complementary role played by all TV platforms in providing digital TV coverage across the UK.   

 
As we discuss later, there have been increases in DAB (digital audio broadcasting) 
6.11
radio coverage during this year, with further increases planned. As well as via DAB, digital radio services are available on digital TV platforms that reach 99% of UK 
households. Digital radio over the internet is available to virtually all115 broadband 
customers.  

## Capacity Of Different Platforms

 
Over 500 TV channels are broadcast in the UK. Cable, satellite and DTT each have 
6.12
different constraints on capacity for these channels. As we show later, the demand for broadcast capacity is growing, not only due to an increasing number of TV 
channels (such as time-shifted channels) but also because HD is becoming more important.  

 
By gaining the efficiencies of new broadcast transmission and compression 
6.13
technologies, more capacity has been made available on broadcast TV platforms in recent years. For example, when HD services launched on DTT in 2009, there was 
only sufficient capacity for three HD channels on the relevant multiplex (PSB3), using the more efficient MPEG 4 and DVB-T2 compression and transmission technologies. 
With continual improvements in MPEG 4 compression equipment efficiency, this 
multiplex is now able to support five HD channels. Further increases are likely in the future.  
 
Five of the other DTT multiplexes (PSB1 and 2 and COM4, 5 and 6) currently use the 
6.14
older MPEG 2 and DVB-T compression and transmission standards. As a result they 
only have capacity for between seven and 14 standard-definition (SD) channels, 
depending on the amount of capacity devoted to each channel.  
 
Since 2013, additional DTT capacity has been provided by a new interim multiplex 
6.15
('COM7' in the table below). This multiplex operates in the 600MHz spectrum band that was freed up as a result of digital switchover (another interim multiplex, COM8, 
has been licensed but is not yet in service). COM7 operates using DVB-T2 and 
MPEG4 and can be received by households with Freeview HD equipment, which supports both these standards. This has the effect of extending the range of services accessible on receivers that support DVB-T2 and MPEG 4, such as BBC Four HD 
and 4Seven HD. We expect that this will encourage more consumers to adopt 
Freeview HD equipment. This in turn could help create a virtuous circle whereby an 
increasing number of DVB-T2 and MPEG4-compatible receivers makes it more 
attractive for other DTT multiplexes to use these standards.  
 
Ofcom has also licensed a new DTT multiplex for use by local TV channels across 
6.16
the UK. In total, 30 local TV services hold licences and some are also available over 
satellite and cable TV.  
 
We summarise the capacity of the different DTT multiplexes in the table below.  
6.17

Multiplex 
Standards 
Bit rate 
(Mbit/s) 
Coverage (% 
households) 
Transmitters 
Concurrent 
TV channels 
PSB1 
MPEG2/DVB-T 
24 
99% 
1156 
7 SD 
PSB2 
MPEG2/DVB-T 
24 
99% 
1156 
9 SD 
PSB3 
MPEG4/DVB-T2 
40 
99% 
1156 
5 HD & 1 SD 
COM4 
MPEG2/DVB-T 
27 
~90% 
80 
14 SD 
COM5 
MPEG2/DVB-T 
27 
~90% 
80 
14 SD 
COM6 
MPEG2/DVB-T 
27 
~90% 
80 
14 SD 
COM7 
MPEG4/DVB-T2 
40 
76% 
30 
6 HD & 2 SD 
COM8 
Licensed but not currently in use 
Local TV 
MPEG2/DVB-T 
10 
Localised 
20 
3 SD 
N Ireland 
MPEG4/DVB-T2 
10 
N Ireland 
3 
3 SD 

Source: Ofcom estimate based on operator data 

 
It is more difficult to estimate the capacity of satellite and cable TV delivery platforms. 
6.18
At present there are four main satellites that currently provide TV coverage in the UK to homes with Sky or Freesat receivers. But new satellites, or ones with higher capacity, could be added in the future. For cable, new capacity could be added by 
implementing network improvements such as by splitting localised transmission nodes or by rebalancing the amount of bandwidth used for TV and the internet. The report by Analysys Mason, published alongside this report, contains more detail 
about the capacity of different platforms.116 
 
A high-level comparison of the TV channel capacity of satellite, cable and DTT 
6.19
delivery platforms is shown in Figure 78. This reveals that satellite currently has the 
greatest platform capacity, followed by cable and then DTT. 
 
Cable and satellite operators generally have greater control over consumer 
6.20
equipment used to receive their services than does the DTT platform, which relies on 
the horizontal receiver market. This potentially makes it easier for satellite and cable platforms to upgrade to more efficient transmission and compression standards to increase their capacity. This, coupled with their greater underlying levels of physical capacity, has helped ensure that satellite and cable platforms have been able to provide a sufficient amount of capacity to meet demand, including the demand for HD 
                                               
 
116Analysys Mason report "New service developments in the broadcast sector and their implications 
channels. In contrast, the DTT platform is more capacity constrained and carries many fewer channels. 

## Emerging Trends In Tv Consumption And Future Infrastructure Implications

 
The conventional DTT, satellite and cable TV delivery networks we describe above 
6.21
are continuing to play an important role in delivering broadcast TV content.  In this section, however, we highlight changes that are starting to affect how TV is used by consumers and the implications for future infrastructure. These changes are: 
- 
a move to higher-resolution formats, including high definition (HD) and ultra 
high- definition (UHD) '4K' TV; 
- 
greater use of broadband to deliver both linear and non-linear content; and 
- 
consumption of TV content across a greater range of devices, including mobile 
devices. 
 
Ofcom commissioned a report by Analysys Mason to assess these trends in more 
6.22
detail, and we have published their report alongside this one. This is available at: 
http://stakeholders.ofcom.org.uk/binaries/research/infrastructure/2014/broadcastdev.pdf 

## Adoption Of Higher-Resolution Formats

 
HD services were first made available in the UK over cable TV in 2005, and 
6.23
subsequently on Sky in 2006. HD became available on DTT in 2009 following the 
conversion of one DTT multiplex (PSB 3, operated by the BBC) to more efficient DVB-T2 and MPEG4 transmission and compression technologies. 
 
HD pictures generally require more broadcast capacity than SD. The diagram below 
6.24
shows that an HD picture transmitted at a constant bit rate in MPEG 4 (also known as AVC) currently needs around 6-10Mbit/s of bandwidth and an SD picture 2-
4Mbit/s when using MPEG2. On a broadcast platform, this creates the need for a 
trade-off between the numbers of channels that can be delivered, and picture quality. Over broadband, meanwhile, HD channels need more bandwidth and higher connection speeds; this means fewer people are able to receive them, since not everyone will have a fast enough connection.  
 
The improvement in digital compression efficiency delivered by new compression 
6.25
standards (shown in Figure 79 below) is helping to lower demands on networks. For 
example, the new HEVC (high efficiency video coding) compression standard makes it possible to deliver an HD service with a similar amount of bandwidth to an SD service using MPEG 2. 
 
HEVC will also make transmission of even higher-definition pictures a practical 
6.26
reality. Looking beyond current HD, higher-definition TV formats such as Ultra HD (UHD), also known as 4K, are set to place new demands on network capacity. 4K TV offers four times the picture resolution of HD, as well as other potential features including  higher frame rates, better dynamic range and colour rendition, and enhanced audio, to provide a more realistic viewing experience. Using HEVC, it seems likely 4K TV will need to be transmitted at approximately 13-15 Mbit/s. The BBC conducted the first UK trial of 4K TV in 2014 using both DTT and IPTV 
distribution. Other providers such as Netflix have also made 4K content available to some of their customers in the UK. 

 
Source: Analysys Mason 

 
In their report, Analysys Mason concluded that the introduction of 4K TV is likely to 
6.27
be staggered across different platforms. While 4K services are already available as over-the-top, on-demand broadband services, the report suggests that satellite and 
managed IPTV providers are the most likely to deploy 4K over the next two to three years, followed by cable. Launch of 4K on DTT would probably come much later, given the capacity constraints on the platform.  

## Growth In Broadband Tv

 
Broadband TV services are becoming increasingly popular with consumers, and a 
6.28
wide range is now available in the UK. These services can be split between those that are managed by operators (e.g. to control quality of delivery), and those that are 
delivered over the internet or over the top (OTT) via broadband connections. See 
Figure 80 below, while Figure 81 shows the historical timeline for the evolution of broadband TV services. 
 
Source: Ofcom CMR 2014 
 

## Operator-Managed Iptv Services

 
Operator-managed IPTV services generally support the delivery of both linear 
6.29
broadcast channels and on-demand content in both SD and HD formats. Operators 
use different approaches to manage capacity, and both BT and TalkTalk have invested in their own 'multicast' networks.118 

 
The use of multicast has helped to reduce demands on broadband infrastructure by 
6.30
linear broadcast channels. This approach allows the same content to be delivered to multiple homes using the same backhaul video stream, rather than having to send 
out individual streams to each user. This significantly reduces the traffic on the 
backhaul connections and the risk of congestion. The ISP controls the whole process and can manage its network to offer a more reliable quality of service. This avoids 
the glitches often experienced when watching video online. It provides a broadcastquality consumer experience to the TV, using a set-top box provided by the ISP.  

## Ott Services

 
Most of the main OTT services only offer on-demand access to TV content and films. 
6.31
A small number of services, such as TVPlayer and TVCatchup, provide linear 
content, including delivery to connected Freeview sets.  
 
An OTT approach relies on sufficient capacity being available on the broadband 
6.32
network to deliver a good customer experience. Most OTT services therefore choose 
to buffer part of the video stream in the receiving device before it starts to play, and use an adaptive bit rate approach that adjusts the quality of the user's stream to match the speed and capacity of their connection. Because an OTT service is delivered over the general internet, rather than using an ISP's multicast system, it can place greater demands on broadband backhaul network capacity than a managed IPTV approach. In section 7 we discuss the resilience of IPTV services and 
mention a few cases where high demand for live streamed content has led to capacity problems.  
 
Figure 82 shows that much of the growth in broadband TV is being driven by OTT 
6.33
on-demand services, with BBC iPlayer being the most popular, although Netflix has 
also grown rapidly in recent years. Over the next few years it is likely that there will 
be further growth in these services, placing increased demand on broadband network capacity.  
 
Take-up of smart TVs is likely to continue growing, and new connected-TV devices 
6.34
are likely to appear, including a Freeview-branded connected TV service.119 
Momentum behind this service is now building with agreement on technical specifications and the awarding of initial contracts. As this, and other connected TV services proliferate, it is likely that the majority of UK households will be equipped to view OTT content on their main TV sets within the next few years. Whether this leads to more fundamental changes in consumers' viewing habits remains to be seen.  
 
Another form of on-demand content delivery that may become more common with 
6.35
the falling cost of digital storage is the use of cached content, either in the home or further upstream in networks (in 'the cloud'). This approach has the advantages of allowing content to be delivered outside periods of peak demand and for consumers 
to download and store content even if they have slow broadband speeds.  

## Implications Of Growth In Broadband Tv On Broadband Infrastructure

 
Currently a broadband connection speed in the range of 1-2Mbit/s is needed to 
6.36
deliver an SD video stream, and 6-8Mbit/s to deliver an HD stream using MPEG 4. In 
practice, higher speeds than these are likely to be needed to provide household access to other broadband services at the same time.  
 
The new and more efficient HEVC compression standard (described earlier) will help 
6.37
to reduce the connection speeds needed to deliver broadband TV services. For example, an HD video stream might be delivered in the future using HEVC, requiring 
a connection speed in the range of 3-5Mbit/s; and a 4K stream using less than 
15Mbit/s. However, many ADSL broadband customers' lines would still be unable to support these speeds; they would need to upgrade to VDSL, fibre or cable to access HD and 4K video services. 
 
As we described above, the growth in broadband TV services will also place 
6.38
increased demands on ISP backhaul networks. On managed IPTV networks this can 
be minimised using multicasting, but this is not currently applicable to OTT services. One option is to use caching: here, on-demand content is stored closer to the user to 
avoid the need for transmission at peak times, and to reduce the amount of data that needs to be transmitted over the core network. One particularly attractive future option would be to make use of the increasing storage capacity of consumer set-top boxes and personal video recorders, which now commonly have 1 TB or more. For 
example, EE's planned IPTV services will auto-cache up to six TV channels selected by the viewer, enabling catch-up and restarting of programmes at the beginning.    

 
Another element of broadband infrastructure for TV is in-home networks, especially 
6.39
Wi-Fi. The growth of broadband TV is also likely to place increased demand on these in-home networks. For example, Wi-Fi routers may need to be upgraded to support 
broadband TV services where a lack of a reliable Wi-Fi connection could cause the 
video to glitch or stop. This is less likely to be an issue for catch-up on-demand content, which can use buffering in the receiver. But for linear services, the lack of reliable Wi-Fi can give an inferior experience.  
 
On this point it is notable that YouView120 set-top boxes do not incorporate Wi-Fi as 
6.40
standard and instead use wired Ethernet or Powerline connections.121 However, not 
all households may want to use wired connections between their TVs and their broadband routers, in which case in-home Wi-Fi performance may become an 
increasingly important factor in the future growth of broadband TV services.  

## Wider Range Of Devices Used To Consume Audio-Visual Content, Especially Mobile And Tablets

 
TV is increasingly being consumed on devices other than TVs. In particular, catch-up 
6.41
content is growing in importance and is being consumed inside and outside the home on everything from mobiles, tablets and games consoles to connected TVs and computers.  
 
We can gain some insight into how consumer behaviour is changing from the data 
6.42
published by the BBC on the devices that request TV iPlayer content. As seen in the chart below, there has been significant growth in viewing iPlayer content on smartphones. In July 2014, 47% of requests for iPlayer content were sent from tablets and mobiles, compared to just 25% in October 2012. Conversely, the proportion of requests from computers fell from 48% to 28% over the same period. 
Source: BBC. Note: Internet TV / connected devices include Freeview and Freesat smart TVs, settop-boxes and devices like Roku and Blu-ray DVD players. TV platform operators include Virgin Media and BT Vision. Games consoles comprise Sony PS3, Nintendo Wii and Microsoft XBox 360. An update in iStats AV meant that PS3 devices were incorrectly classified as unknown devices between 18 Feb and 21 May 2013. On mobile networks, data traffic is growing, specifically for TV and video. Forecasts suggest a four-fold increase in traffic carried over mobile networks in the UK over the period 2013 to 2018, driven by traffic on 3G and 4G handsets as well as devices such as tablets and e-readers.122 

 
On mobile networks, data traffic is growing, specifically for TV and video. Forecasts 
6.43
suggest a four-fold increase in traffic carried over mobile networks in the UK over the period 2013 to 2018, driven by traffic on 3G and 4G handsets as well as devices 
such as tablets and e-readers.123 
 
A wide range of OTT mobile video and TV services is currently available, but in future 
6.44
it will be possible to use mobile networks for one-to-many transmission as mobile 
broadcast systems are developed.  
 
A 4G multicast system, known as eMBMS (Evolved Multimedia Broadcast Multicast 
6.45
System) has now been standardised. It was recently trialled and demonstrated during Glasgow's Commonwealth Games by the BBC in co-operation with EE, Huawei and Qualcomm. It is unclear at this stage when this approach will move from trials to full 
implementation. One possibility is that it could be deployed in locations where there is a high demand for mobile TV services such as sports stadia, giving spectators access to TV feeds.  
 
Meanwhile, the increasing take-up of smartphones and tablets is driving video 
6.46
consumption on mobile devices. In Q1 2014, smartphone penetration in the UK was 
61% of adults, and 44% of households owned a tablet.124 Statistics from Three 
suggest that video currently represents 50% of data traffic125 over its mobile network. 
EE expects 70% of network traffic to be video by 2017. To help meet this increased demand, mobile operators are using a combination of more cells, more spectrum, more efficient LTE (4G) technology and Wi-Fi offloading.   

## The Effect Of New Tv Consumption Models On Infrastructure

 
In summary, changes in TV technology, and consumer and supplier behaviour, are 
6.47
under way and are already having consequences for the UK's communications infrastructure. In particular, the growing use of broadband TV services and the use of 
higher-resolution picture formats are placing increased speed and capacity demands 
on fixed and mobile broadband infrastructure.   
 
Despite these changes, conventional linear broadcast TV platforms are likely to 
6.48
continue to represent the majority of consumer viewing for the foreseeable future. However, viewers will probably supplement this with increasing demands for broadband-delivered TV, both linear channels and on demand, as well as mobile and tablet viewing. Indeed, many consumers already watch TV in this way.  

## Radio Platforms Digital Listening Is Continuing To Grow

 
Radio services are available on a wide range of delivery platforms including analogue 
6.49
FM and AM, DAB, digital TV platforms and fixed and mobile broadband. Most radio 
listening remains through analogue, but over a third is now via digital platforms. These include DAB, digital TV and the internet, as seen in the chart below.  
respondent has not specified the listening platform used. From Q1 2012 'Internet' has been reclassified as 'Online/Apps' 

 
There are significant differences between younger and older age groups, as seen in 
6.50
the chart below. For listeners aged 16-24, it is notable that more listening is carried 
out through digital and online than via linear broadcast platforms. This is not true of any other age group. As with the differences in TV viewing discussed earlier, it 
remains to be seen whether or not this is a cohort effect. 

Source: Digital Day 7 day diary 
Base: All listening activity records for adults 16+ (17290), 16-24 (999), 25-34 (2342), 35-44 (4113), 
45-54 (4334), 55-64 (3284), 65+ (2218) 
*Average time spent is the total average daily time spent listening to media, including simultaneous 
activity 

## Digital Coverage And Capacity Is Also Growing

 
As part of the TV licence fee settlement with the Government in 2010, the BBC 
6.51
agreed to "enhance its national DAB coverage in the period of this agreement and to match FM coverage". As a first phase in this enhancement, the BBC is set to expand 
its national DAB coverage to around 97% of UK households by March 2017.  
 
Incremental extensions to the coverage of local and national commercial DAB 
6.52
multiplexes are also currently under way. In addition, the BBC and commercial radio operators are working together to extend the coverage of local DAB multiplexes so that in each local area the DAB coverage is equivalent to the FM coverage of the 
largest local commercial radio service.  This will increase the aggregate coverage of local DAB to over 90% of households by 2016. 
 
Alongside these plans to extend existing national and local DAB coverage, new local 
6.53
DAB multiplexes continue to be launched, bringing local DAB services to some parts of the UK for the first time. In 2014, new services came to Somerset and Derbyshire, with further launches to come in North Yorkshire and North Wales. 
 
Ofcom has also advertised the licence for a second national commercial DAB 
6.54
multiplex.  

## 7 Security And Resilience Overview

 
As we increase our dependence on the nation's communications infrastructure, the 
7.1
security and resilience of fixed, mobile and broadcast television networks and 
services become ever more important.  
 
A major failure would have the potential to affect large numbers of people and 
7.2
businesses; it could also have repercussions for the wider UK economy. At the same 
time, the interconnected and global nature of communications services brings with it 
challenging vulnerabilities which we must identify and address.  
 
This section discusses security and resilience in the communications industry. It 
7.3
includes: 
- 
Ofcom's framework for engaging with the communications industry on security 
and resilience matters. 
- 
An analysis of the security incidents that were reported to Ofcom between September 2013 and August 2014 and which had a significant impact on the operation of public electronic communications networks and services. This 
shows that the most commonly reported security incidents126 affect consumer 
telephone access to the 999127 emergency services and are more likely to occur 
in large population centres. The most common causes of service loss are the failure of hardware components and the loss of power.   
- 
A study into the impact of the winter floods on fixed and mobile sector networks and services. This shows that there was an increase in the average incident duration, but that, in general, providers are apparently well prepared for severe weather and able to minimise the impact on consumers. 
- 
The measures taken by providers in the fixed, mobile and broadcast sectors to ensure the availability of their networks and services. This section examines how site planning considerations, back-up sites, diverse routing, specialist incident response teams and cyber-attack defences all play a part in providing 
secure and resilient services. 
- 
A summary of the measures being taken by providers to counter the growing threat of cyber-attack. Although cyber-crime accounts for a very small proportion of the incidents reported to Ofcom, providers highlight this area as a growing trend and are taking the threat seriously. 
- 
Security and resilience in broadcast networks and services. This section examines the cause of outages in the past year and shows that services are 
                                               
normally fully available. We consider providers' concerns that the extremely high demand for online content may lead to capacity problems in the future, and look at how content delivery networks (CDNs) are helping to alleviate this growing concern. 

## Framework The Respective Responsibilities Of Ofcom And Providers Regarding Security And Resilience

 
In accordance with Article 13a of the Framework Directive128, sections 105A-D of the 
7.4
Communications Act 2003, place requirements on providers and Ofcom regarding 
the security and resilience of communications networks and services.  
 
These requirements help to mitigate risks to security and resilience by setting out the 
7.5
following:  
- 
Network and service providers must take appropriate measures to manage risks to security, in particular to minimise the impact on consumers and interconnected networks.  
- 
Network providers must take all appropriate steps to protect, as far as possible, network availability. 
- 
Network and service providers must report to Ofcom breaches of security or reductions in availability which have a significant impact on the network or service. 
- 
Ofcom must, where it thinks it appropriate, notify regulators in other Member 
States, and the European Network and Information Security Agency (ENISA) of 
any reports. 
- 
Ofcom may inform members of the public of details of any reports received, or require a network or service provider to do so.  
- 
Ofcom must prepare an annual report summarising details of all reports it has 
received and send it to the European Commission and ENISA. 
 
Ofcom first published guidance on these security requirements in May 2011 and 
7.6
updated that guidance in August 2014.129  The guidance sets out our expectations for 
a risk-based approach to the management of security. It highlights appropriate 
sources of industry best practice and details our incident reporting requirements.  
 
In order to help achieve the goals set out in sections 105A-D of the Communications 
7.7
Act 2003, Ofcom works closely with providers and industry bodies, both in the telecommunications and broadcasting industries; with the Government, including the Department for Business, Innovation & Skills, the Department for Culture, Media & Sport and the Cabinet Office; and with our counterparts in other European regulators 
via ENISA. 130 
                                               
 
Aside from the requirements under sections 105A-D of the Communications Act, 
7.8
digital television (DTT) multiplex operators have an obligation to meet high standards of reliability and to provide Ofcom with an annual report on transmission performance. These specific requirements are set out in the Television Technical 
Performance Code.131 

## Fixed And Mobile Networks The Majority Of Security Incidents Reported Relate To Voice Services, Often Affecting Consumer Access To The 999 Emergency Services

 
In the past year, 566 security incidents were reported to Ofcom by fixed and mobile 
7.9
providers.  
 
The vast majority of reports were from fixed providers regarding disruption to 
7.10
telephony services (including 999 access) for fewer than 10,000 customers and for less than one day. Incidents with a wider impact, which affect tens of thousands of customers, are less common. Reporting data also show that incidents are more likely to occur in, or near, large population centres. 
 
Figure 86 summarises the number of incidents reported each month between 
7.11
September 2013 and August 2014. The monthly variation can be as great as 20% of 
the average and could be the result of seasonal factors such as weather or school holidays. Ofcom will continue to monitor for trends over time. 
 

## Scope Of Ofcom Reporting Guidance/ Framework

 
Ofcom's guidance provides qualitative and quantitative criteria, against which a 
7.12
provider can gauge the impact of an incident and determine if it should be reported.  
                                               
 

 
Quantitative criteria take the form of numerical thresholds. The lowest and most 
7.13
critical is the 'emergency services access' threshold which applies to incidents that 
affect voice access to the emergency services for 1000 customers, for one hour. 
Thresholds for incidents which affect telephony services, but not emergency services 
access, and for incidents which affect data services, are significantly higher.  
 
The application of these thresholds means that there will be incidents that occur but 
7.14
which are not reported to Ofcom. Since they do not have "significant impact", this is 
in line with the relevant legislation.   
 
Although the new guidance is now in effect, the summary of incidents presented in 
7.15
this section is based on reports received between September 2013 and August 2014, under the thresholds specified in our previous guidance.  
 
We measure the impact of an incident in 'customer-hours'. This is the product of an 
7.16
incident's duration and the number of consumers affected. While customer-hours is 
not the only metric by which incidents may be measured, it provides a useful basis for comparative discussion. Figure 87 shows the customer-hours impact of the 566 
incidents reported to Ofcom. 
Source: Ofcom analysis of data provided by operators 

 
The majority of incidents have a relatively low customer-hours impact and are 
7.17
reported under the 'emergency services access' threshold. Significantly fewer incidents were reported under the higher non-emergency services access thresholds. 
Of the 566 reported incidents, 548 affected fixed networks and 18 affected mobile. 

This can be explained by two key differences between fixed and mobile networks.  

 
First, the data show that 97% of the fixed-line incidents reported to Ofcom affected 
7.18
voice access to the emergency services. This was the case for just 39% of mobile incidents because UK mobile operators have an emergency roaming agreement. 
When a mobile network is unavailable, the handset will still have access to the 
emergency services via a rival's network, if coverage is available. This means that a 
low customer-hours voice outage on a mobile network is unlikely to result in a loss of 
emergency services access and therefore will not be reported to us. This type of cooperation agreement is not technologically feasible in fixed networks so we receive 
significantly more incident reports against the 'emergency services access' threshold. 
 
Second, the topology of mobile networks means that network failures have a 
7.19
relatively low impact. Overlapping cell coverage, and a UK average of around 300 
consumers per cell, means that the failure of a single or small number of cell sites 
would rarely meet our minimum threshold. In contrast, a fixed network's local 
exchange or street cabinet can be a single point of failure for thousands of consumers. 
 
These inherent differences between fixed and mobile explain why significantly more 
7.20
fixed network incidents are reported to Ofcom. These are concentrated in the lower 
left quadrant of Figure 87. 
 
The yellow line indicates where an incident will have an impact of one million 
7.21
customer-hours. This type of incident will generally be the result of a core network 
failure and there is a more equal distribution of fixed and mobile incidents in this 
space. Ofcom is required to report incidents which have an impact of greater than 
one million customer-hours to ENISA. 
 
Figure 88 below shows how the 566 incidents are geographically distributed in the 
7.22
UK, and reveals that there is a correlation between incident frequency and population density.  
 
©2014 Google - Map data ©2014 GeoBasis-DE/BKG (©2009), Google 

 
Where densities are higher, a higher concentration of network assets is required to 
7.23
provide services. It is logical to expect that where there are more assets, there is a greater likelihood of incidents.   
 
However, our minimum incident threshold of 1,000 end-users affected may result in 
7.24
some rural incidents not being reported. The geographical location and the extent of the impact of incidents is covered in our new guidance, and we aim to investigate this 
pattern further in the coming year. 

## The Majority Of Incidents Are Caused By The Failure Of Hardware Components, The Loss Of Power Supply Or By Software Bugs

 
Establishing the root causes of incidents is central to understanding risks to the 
7.25
security and resilience of networks and services. System failure is overwhelmingly the root cause of significant network incidents; some 95% of the 566 reported 
incidents fall into this category. This includes hardware and software failures, and the failure of systems, processes and procedures.  

 
The remaining categories are human error, natural phenomena (which includes 
7.26
severe weather) and malicious actions, which were responsible for 3%, 1% and <1% 
of the reported incidents, respectively.  
 
Ofcom categorises the root and primary cause of reported incidents according to the 
7.27
taxonomy provided in the ENISA Article 13a Technical Guideline on Threats and 
Assets.132 The primary cause category provides further detail regarding the exact 
issue which led to an incident. Figure 89 shows that incidents were reported against a wide range of primary causes. 
 
The 'power cut' category indicates a loss of electricity from the grid. This type of 
7.28
incident often has an impact that is restricted to the local area, but is likely to affect 
both voice and data services. 
 
'Hardware failure' is the most common primary cause. Interestingly, 99 of the 228 
7.29
hardware failure incidents were power-related hardware issues. Examples included 
the failure of a fuse, battery, inverter circuitry and backup generator. Therefore, 197 incidents, or 35% of the 566 reported incidents, were the result of some form of power failure (grid-distributed power or on-site hardware-related power failure). The 
impact of a hardware failure is often restricted to the local area where there is limited 
network resilience; for example, in exchanges or street cabinets. Due to the resilient 
nature of core network design, hardware failure in core network assets rarely leads to a loss of network availability.  

 
'Cable cut or break' is often the result of a procedural failure, human error or criminal 
7.30
activity. Often, cables are cut by people with no connection to telecoms - it could be 
an accidental cut under the sea, or by road or utility workers. In the case of fibre cables, their very high capacity means that many customers may be affected, and such incidents can take a considerable time to resolve. 
 
The 'software bug' category includes network failures where a network asset (such 
7.31
as a server, switch or router) must be turned off and on again to resolve the incident. As with hardware failure, the impact of a software failure is often restricted to the local area, where there is limited network resilience. 
 
Figure 90 shows the average impact of primary-cause incident categories. When 
7.32
compared with Figure 89 it is clear that the most frequent incidents have a lower than 
average impact; conversely, incidents with the highest average impact are less 
frequent. 
 
The more frequent primary causes are likely to be captured by the providers' incident 
7.33
management processes, and are therefore more quickly diagnosed and managed by their response teams. Also, the more frequent primary causes, such as power cut 
and hardware failure, are more likely to occur in the access layer of the network, 
where the number of consumers affected is constrained by the network topology. 
 
Conversely, the less frequent failure modes may not be understood by providers and 
7.34
can require a complex fault diagnosis and resolution process. Additionally, incidents with a relatively high impact are those that occur in the core of the network. 

## Incidents With An Impact Above One Million Customer-Hours Are Uncommon, And Are Often The Result Of A Unique And Unexpected Threat To Security

 
Figure 91 summarises the primary root causes of these outages and shows that 
7.35
there is no dominant issue behind incidents with an impact of more than one million 
user hours. 
 
Although power failure is a significant cause of incidents overall, it does not appear in 
7.36
Figure 91. For an incident to have an impact of over one million user hours it is extremely likely that the network fault is in the core or distribution layers of a network. 
Typically, these parts of a network will have an extremely resilient power supply. 
Source: Ofcom analysis of data provided by operators 
  

 
The largest single impact on a fixed network in the last year was caused by an 
7.37
attempted bank robbery. In February 2014133, criminals cut through 11 cables in a 
failed attempt to disable a bank's alarm systems. In doing so, they severed cables containing hundreds of fibres, causing major disruption to the voice services of BT, 
TalkTalk and Sky customers in the London area. The complex restoration effort required by Openreach took over three days, over which time the combined impact reached over 40 million customer-hours. 

 
No provider is immune to unexpected and significant network failures, and indeed, 
7.38
EE134, Vodafone135, O2136, Three and Virgin Media137 all suffered incidents with an 
impact above one million customer-hours during the reporting period.  
 
Most recently, on 22nd November, Vodafone suffered a network incident138 that 
7.39
caused a number of high profile "Non-Geographic Call Services"139 that it provides to 
large public and private sector customers to fail. These included both the 101 and 111 non-emergency accesses to national Police and NHS services. Services were restored relatively quickly but the incident demonstrated how a failure in a single network element can have a significant national impact. 
 
Guidance from ENISA140 sets out that national regulatory authorities of Member 
7.40
States should include incidents with an impact above one million user hours in their annual reports to ENISA. In the reporting period of September 2013 to August 2014 there were 19 incidents which met this threshold: 13 affected mobile networks and six affected fixed networks. System failure is still the main root cause, at 68%.  
 
ENISA's *Annual Incident Reports 2013* provides a summary and analysis of the 
7.41
incidents reported by EU Member States during that year.141 

## Case Study - The Impact Of Severe Weather And Flooding Providers Take Considerable Steps To Ensure Service Availability During Periods Of Severe Weather

 
The risk that flooding poses to major switching sites is a prime planning criterion, and 
7.42
sites are positioned, and sometimes repositioned, as a result. Examples of these sites suffering as a result of river or coastal flooding are therefore very rare.  
[Accessed 20 March 2014] 
135 The Independent, 2014. Vodafone 'working hard' to resolve intermittent outages of its mobile phone services.  http://www.independent.co.uk/life-style/gadgets-and-tech/news/vodafone-workinghard-to-resolve-intermittent-outages-of-its-mobile-phone-services-9065562.html [Accessed 28 October 2014] 
136 The Telegraph, 2014. O2 customers suffer wide-scale network outage. 

http://www.telegraph.co.uk/technology/news/10354066/O2-customers-suffer-wide-scale-networkoutage.html [Accessed 28 October 2014] 
137 The Register, 2014. 

http://www.theregister.co.uk/2014/07/08/virgin_media_suffers_yet_another_dns_outage/ [Accessed 8 
July 2014] 
138http://www.theregister.co.uk/2014/11/28/nhs_and_police_nonemergency_services_outage_due_to
_switch_failure_source/  
139 These services use numbers starting with 08 or 09, or are accessed via a three digit code, and are often used to provide call centre services.  
140 ENISA Technical Guidance on Incident Reporting.   https://resilience.enisa.europa.eu/article-
13/guideline-for-incidentreporting/Article_13a_ENISA_Technical_Guideline_On_Incident_Reporting_v2_1.pdf 
141 ENISA, 2014. Annual Incident Reports 2013.  http://www.enisa.europa.eu/activities/Resilienceand-CIIP/Incidents-reporting/annual-reports/annual-incident-reports-2013/ [Accessed 28 October 2014] 

 
Prolonged flooding can damage some types of underground cable, although many 
7.43
are actually designed to be submerged during normal operation. A more significant problem during temporary floods is that damaged cables cannot be repaired until flood water subsides. Occasionally, flooding can damage cable routes, for example 
due to ground movement and resultant duct damage.  
 
Most fixed line exchanges were built many years ago, and although flood risk was 
7.44
taken into account at the time, flood patterns do change over time. Defences are strengthened and relocation of higher risk sites occurs. But exchanges need to be located near the population they serve and, as a result, some remain at direct risk from flooding.  
 
In the mobile sector, extreme weather events and flooding invariably result in a 
7.45
higher than usual number of base station failures. The most common causes are power failure, the failure of microwave backhaul links, or infrastructure and 
equipment damage. Severe weather can also hamper safe access to mobile infrastructure and therefore prolong the duration of the incident.  
 
Figure 92 below shows a remote mobile base station site where there was a long-
7.46
running incident this year. Restoring the service took a long time because bad weather prevented engineers from reaching the site; they eventually needed a ski lift to gain access. Although this incident did not meet one of our numerical thresholds it is an example of reporting under the qualitative criteria. 
 
Providers' incident response teams are prepared for mobilising in severe weather. 
7.47
When bad conditions are forecast they will often take preventative measures such as 
allocating additional engineers and increasing stocks of back-up fuel for emergency 
generators. During incident response activities, field engineers often need to draw on specialist training, all-weather kit and special vehicles to reach and repair damaged 
network assets in extremely challenging environments. 

## Source: Ee

 
During the winter of 2013-14 an anticipated increase in the average incident duration 
7.48
was noted, but generally providers were well prepared for severe weather and succeeded in minimising the impact on consumers 
 
The preparations and responses of UK providers during the 2014 floods meant that 
7.49
severe weather was responsible for only five of the incidents reported to Ofcom in the reporting period. This represents less than 1% of the 566 incidents reported.  
 
The winter of 2013-14 included the wettest December-January period since records 
7.50
began.142 The charts below show that during that time, some parts of the UK 
received rainfall over 200% greater than the expected average.  
 
However, the charts also show that there is no obvious correlation between the 
7.51
locations of incidents (plotted in green) and levels of rainfall.  
 
Source: Ofcom/Operators/Met Office 

 
Figure 86 (on page 126) shows that the number of incidents reported in January was 
7.52
below the average for the period. This suggests an improved performance by providers during those weeks of severe weather. The maps also show that the location of incidents during the period does not deviate from the annual geographical distribution shown in Figure 88. 
 
Furthermore, Figure 95 shows that the average duration of an incident for a given 
7.53
month increased during the winter months. This is consistent with our understanding of providers' incident response operations and the challenges their engineers face 
during severe weather. 
Source: Ofcom analysis of data provided by operators 

 
Throughout the wettest December and January period on record, the UK's providers 
7.54
prevented a significant increase in the average number of incidents. We noted an (anticipated) increase in average incident duration, but in general providers demonstrated that they are well prepared for severe weather and for minimising the impact on consumers. 

## Ofcom Engages With A Wide Range Of Organisations And Industry Bodies To Ensure That The Resilience Of Networks And Services Is Constantly Improving

 
The resilience of networks and services is largely linked to the level of focus and 
7.55
investment by providers.  
 
Collective activity by groups of providers, government agencies and regulators can 
7.56
also help. Joint actions, such as information-sharing to protect against possible 
incidents, and co-ordinating resources to respond to actual ones, bring tangible 
benefits.  
 
The Electronic Communications Resilience and Response Group (EC-RRG) 
7.57
continues to be the major instigator of these collective activities. Its members include 
most of the providers which have significant amounts of communications infrastructure, and they work together to improve the resilience of the sector as a whole. Recent areas of focus have included the potential impact of space weather 
events and fuel shortages. The group is responsible for the National Emergency Alert for Telecoms (NEAT) process for information and resource-sharing during major 
incidents affecting the sector.  
 
During both the Commonwealth Games and the NATO summit in Wales this year, 
7.58
the group used a process for network status reporting that was developed during the Olympics. This enables providers to file daily reports of any issues affecting their networks or services during major events. It gives the event organisers a valuable snapshot of how the communications networks are performing, and keeps them 
informed about any problems even if these are not significant enough to trigger the use of NEAT.  

 
Even when providers submit nil returns, as is often the case, this provides important 
7.59
reassurance and keeps lines of communications open.   
 
Another example of the industry working together is NICC, the UK's technical 
7.60
interconnect standards group.143 In May 2014 a new working group was formed with 
the objective of updating the ND1643 'minimum security standard'. Ofcom looks for certification against this standard as evidence that a provider is complying with its obligations to manage security risks arising from connecting with other networks. The 
working group aims to develop the standard further, to include more traditional circuit switched network technologies and to ensure that the standard is suitable for both large and small providers. 
 
Ofcom contributes to both groups discussed above. We also work with other 
7.61
economic regulators to improve resilience across the UK's infrastructure sectors. Part 
of our work in the UK Regulators Network (UKRN144) is to lead a project looking at 
cross-sector resilience. Alongside our other duties, we are examining how the UKRN's members consider resilience, and are identifying opportunities to improve collaboration.  

## Case Study: The Impact Of Cyber-Attacks On Networks And Consumers The Scale Of Cyber-Attacks Is Growing But The Impact On Uk Networks Remains Low.

 
Network and consumer equipment are vulnerable to cyber-attacks, when an attacker 
7.62
attempts to compromise networks and services by using malicious code, or by exploiting legitimate network functions. One such example is a distributed denial of service (DDoS) attack.  
 
One common form of DDoS attack is to bombard a target network or server with 
7.63
traffic, leaving it with no spare computing or network capacity to carry out its normal 
function. In order to mount an attack, the attacker may control and exploit, *en masse*, 
malware-infected personal computers or vulnerable broadband routers. In this way, 
consumers' equipment may play a role in carrying out the attack without their knowledge. Due to the nature of these attacks, users may not suffer a complete loss of service, but they may experience significantly poorer internet access.   
 
The impact of DDoS attacks can be hard to quantify. They may result in loss of 
7.64
service for a small number of targeted users, a degradation to services overall, or the failure of technologies on which the entire network is dependent, such as the domain 
name system (DNS) or authentication. We have received only a small number of incident reports of cyber-attacks. However, DDoS attacks are a growing threat, with 
providers reporting that it is becoming easier to launch attacks using simple to use and easily accessible tools. 
 
Attackers typically target larger organisations such as online businesses, web hosts, 
7.65
online storage and DNS servers. DDoS can also inadvertently occur during certain types of network failure.  
 
Providers are also beginning to observe individual consumers being targeted. This 
7.66
can be for a variety of reasons, from competitive online gamers trying to seek an advantage to the exploitation of online casino games.  
 
Attackers tend to exploit the properties of commonly used internet protocols, such as 
7.67
the user datagram protocol (UDP) or the transmission control protocol (TCP). They use these protocols to overload the target system's resources and, in many cases, the attackers remain untraced.   
 
Organisations which monitor cyber-attacks, such as Arbor Networks and Prolexic, 
7.68
report that the number and scale of DDoS attacks on all types of target are growing. 
Arbor Networks reported that the number of attacks exceeding 20Gbit/s in the first 
half of 2014 was twice that detected in the whole of 2013.145 In February, Cloudflare 
reported a large DDoS attack which peaked at 400Gbit/s.146 
 
However, against this backdrop of increased attacks, providers have reported a very 
7.69
limited impact on residential consumers. They cite the low number of attacks, and sufficient spare capacity in their networks, as key reasons for this. The attacks that providers have observed have generally been the flooding attacks described above, or targeted attacks which exploit equipment or software vulnerabilities.  
 
However, mindful of the evolving nature of DDoS attacks, most providers have 
7.70
introduced measures to protect their networks from this type of threat. They use automatic tools to manage and filter traffic at the edges of their network. These can be used to filter out known sources of attack and patterns of malicious traffic, or to control the volume of traffic that is allowed to enter their network. Additionally, there are specific preventative measures available to providers, often associated with understood attack vectors or known vulnerabilities.  
 
The protection of networks and consumers against cyber-attack is a process of 
7.71
continuous development. Government-funded computer emergency response teams 
(CERTs) report daily on new vulnerabilities identified in commonly used software and 
systems. Attackers will continue exploiting communications networks to take advantage of these flaws.  

## Broadcast Networks Most Networks Used For Broadcasting Maintain High Availability

 
Broadcast networks, such as the digital television (DTT) and the digital radio (DAB) 
7.72
networks, generally have high availability. All four DTT multiplex operators reported 
high availability of their services for 2013.147 The two national DAB networks also 
reported availability above 99.9% between July 2013 and June 2014. Nevertheless, 
outages do occur and, like fixed and mobile networks, longer outages tend to be in rural areas where access to the transmitter is more difficult.  

## Broadcasters' Responsibilities

 
Broadcasters are required to provide an annual summary of transmitter availability, in 
7.73
accordance with Ofcom's Television Technical Performance Code.148 The Code sets 
out an availability target for each DTT transmitter site. The 80 main transmitter sites that provide coverage to 90% of households have an availability target of 99.8%. The 
public service broadcasting (PSB)149 channels are transmitted from more than 1000 
additional 'relay' sites and these have a target availability of 99.0%. Availability is reported to us on a site-by-site basis, and the vast majority of sites met or exceeded 
these targets in 2013.   
 
Separate requirements under Sections 105A-D also apply to broadcast networks. 
7.74
However, the threshold we specify for significant incidents on broadcast networks is 
different to those for fixed and mobile networks.150 The nature of our thresholds 
means that we receive few reports.  

## Outages On Dtt Networks Are Generally Very Short And Affect Only Specific Transmitter Sites

 
Data from the DTT multiplex broadcasters show that most outages on transmitters 
7.75
are very short. Typically, they last for less than an hour, although there have been cases that took four to five days to resolve. One particularly lengthy example was the loss of television services in the Inner Hebrides and the Isle of Arran due to winter 
storms in March 2013.151 The loss of power in the area meant that the transmitters 
were not functioning for between three to five days. The outages affected PSB-only 
relay transmitter sites, which generally serve small communities that are outside the 
reach of the larger main transmitters, and which carry only the PSB multiplexes. As the vast majority of relay transmitters pick up and re-broadcast signals from another 
transmitter, any outage at the 'parent' transmitter will cause a knock-on outage at its 
dependent relays.  
 
Another type of incident is a failure at broadcasters' studios, playout centres or 
7.76
content aggregation sites. This can cause relatively widespread disruption because 
these centres provide video feeds to multiple transmitters and/or platforms. One such outage occurred on 1 December 2013 across a large part of the UK, temporarily affecting the distribution of ITV to viewers in Central and Northern England who were watching on standard definition Freeview, digital satellite or via cable on Virgin 
Media.152  This was due to a loss of power at one of ITV's main playout centres, 
caused by an electrical fault. Service was quickly restored to digital satellite viewers because a temporary reconfiguration of the signal distribution paths enabled content from another region to act as a substitute. However, viewers on standard definition Freeview were affected until power to the transmission centre was restored.  

 
Like telecoms, broadcasting networks rely greatly on other sectors. For example, 
7.77
local power outages, particularly in smaller sites, can mean that service can only be restored once power has returned. There is also a reliance on incoming programme feeds to transmitter sites (telecoms circuits at larger transmitters). One outage of a programme feed caused a two-minute outage to almost 80 sites.  

## Dab Networks Also Have High Availability

 
The two providers of national digital radio (DAB) multiplexes, BBC and Arqiva, 
7.78
reported very high availability for their DAB networks, at above 99.9%.  
 
However, adverse weather in December 2013 caused a number of significant 
7.79
outages. The BBC's DAB service in Guildford, Surrey, suffered a loss of service on 24 December for 17 hours when winter storms took out the electricity supply. In London, Arqiva reported losing its national DAB multiplex for over a day, beginning on 24 December, due to failures in the microwave radio distribution network between a number of sites in the area. There is no evidence of these incidents having a greater impact by occurring on Christmas Eve.  

## Extremely High Demand For Online Content Can Lead To Capacity Problems

 
Consumers are increasingly turning to online services such as BBC iPlayer, ITV 
7.80
Player and Sky Go for live and on-demand content. Streaming live content can present some challenges for online distribution; the demand for extremely popular programmes at peak times may exceed the capacity available from content distribution servers. In the past year, there have been a number of high-profile 
examples when demand for shows exceeded expectations, and the user experience was degraded for some consumers. These included: 
- 
the live stream of the opening match in this year's World Cup on ITV Player153; 
- 
a live stream of football on the final day of the Premiership season on SkyGo154;  
- 
the first episode of Game of Thrones on SkyGo155; and 
- 
the live stream of the Scottish independence debate on STV Player. 156 
 
The BBC suffered a lengthy outage on parts of its website in July, which affected its 
7.81
audio and video streaming services.157  This was due to a number of faults occurring 
at the same time, which increased the load on its database that supports streaming services.  
 
These examples show the importance of ensuring that there is sufficient capacity to 
7.82
serve peak demand. Using CDNs, which are covered in more detail in section 9, is 
one way to distribute content to ensure resilience. However, this only works for ondemand content which can be distributed to servers in advance.  
 
Three of the four examples listed above related to the demand for live streaming. 
7.83
This is more challenging.  However, there are solutions such as multicast, which can help ISPs manage the distribution of popular content. We explain this in more detail in section 9. 

## Improving The Resilience Of Broadcasting Networks

 
This year, for the first time, we have gathered information from all the main terrestrial 
7.84
multiplex, satellite, cable and IPTV158 operators about their arrangements for 
maintaining and improving the availability of broadcast networks. All of the operators we contacted provided information on their resilience arrangements. They also told 
us about their processes for responding to an emergency and restoring normal 
operation.  
 
In the following paragraphs, we report first on the arrangements of the terrestrial 
7.85
broadcasting networks, followed by the satellite, cable and IPTV operators.  

## Although Dtt And Most Dab Broadcast Networks Rely On A Single Transmission Service Company, Extensive Procedures Are In Place For Major Incidents

 
The transmitter network infrastructure for the UK's DTT, and most DAB, broadcasters 
7.86
is owned and operated by Arqiva, a single integrated transmission service company. 
The broadcasters that use Arqiva's network identified its business continuity plans in 
their responses. 
 
Extensive and generally robust procedures appear to be in place to deal with major 
7.87
incidents in Arqiva's network. [] DTT multiplex operators also have contractual agreements with Arqiva to ensure that network service levels meet the transmitter availability requirements set by Ofcom.  
 
A number of specific architectural measures are also in place to ensure high levels of 
7.88
availability and resilience in broadcast networks. Most main transmitter sites (i.e. those serving relatively large populations) have at least two programme feed circuits. 
These use networks from separate providers and with diverse mains power feeds where these are available. The transmitter equipment chains at main sites are duplicated and operate in passive reserve configuration, meaning that the backup equipment chain is ready to take over if the main feed fails. In the event of an antenna fault, services are typically reconfigured automatically to operate from either another part of the antenna array, or from a reserve antenna. 
 
Smaller TV transmitter sites, such as low-power 'relay' transmitters which tend to 
7.89
serve just a few hundred homes, do not usually have equipment or feed redundancy. 
They require an engineer to visit the site to repair equipment faults. [] 
 
The BBC advised that its 'reference' DTT transmitting stations have two or three 
7.90
programme feeds with independent connectivity, to ensure that a fault on one feed 
would not affect the others. With the exception of those operating as part of a single 
frequency network159, non-reference DTT transmitting stations use terrestrial rebroadcast for their programme feeds. These feeds are supplemented by other systems if they are unreliable, or are predicted to be so. The DTT network's resilience is tested as part of an ongoing programme. In addition, the core of the BBC's DAB transmission network (those sites serving the majority of the population) has multiple programme feeds with telecoms carrier independence. 
 
[] 
7.91
 
[] 
7.92
 
[] 
7.93

## Cable, Satellite And Iptv Networks Also Have Resilient Network Architecture

 
A large amount of TV content, including live content, is transmitted via satellite, cable 
7.94
and on fixed broadband networks. The resilience of these networks is maintained primarily through the 'mirroring' of key sites. If the primary sites fail, backup sites can 
take over to enable the network to maintain the service.  
 
These network operators also use a number of other measures to improve the 
7.95
resilience of their networks. These include: 
- 
diverse routing of data via separate physical paths; 
- 
improving the physical security of sites by locating critical network equipment in areas with controlled access;   
- 
controlling remote access to the equipment through logical security policies; and 
- 
having processes in place to maintain business continuity, conduct incident response and implement disaster recovery.  
 
A small number of key broadcast sites support the distribution of linear content on the 
7.96
cable, satellite and IPTV networks. All of the network operators reported 
arrangements to maintain a backup site in a geographically different location. If broadcast content from the primary site is interrupted, service can be maintained from the backup site. In some cases, there may be a short interruption in the service 
as the network is manually reconfigured. These sites also employ dual routes on 
geographically diverse paths, meaning that if there is a single cable break, traffic can 
be rerouted to an alternative cable.  
 
Source: Analysys Mason 

 
Figure 96 shows the key components of a cable network. Live television content is 
7.97
aggregated at the master head end, where additional local content is injected. [] 
 
Figure 97 sets out the key elements of the distribution of broadcast content for a 
7.98
typical satellite broadcaster. Satellite broadcasting requires the transmission of broadcast content to a satellite transponder via a satellite uplink. The consumer receives the content via a signal from the satellite transponder.  
 
Source: Ofcom 

 
[] 
7.99
 [] 
7.100
 BT and TalkTalk provide live content to their customers via their broadband network. 
7.101
Incoming content from television channels are dual-delivered to the data centres, via 
independent and resilient paths. [] 

## Bt'S Media And Broadcast Network

  [] 
7.102

## Arrangements For On-Demand Content

 Unlike live programmes, on-demand content can be cached in a diverse range of 
7.103
servers.  
 This practice is mainly to reduce the costs of data carriage and to improve the 
7.104
customer experience, as explained in section 9. However, this also makes the distribution of content more resilient because the same content is available from a number of CDNs.  
 Because multiple copies of the same content are saved on different servers, a single 
7.105
server can fail without any impact on consumers. 

## 8 Convergence And Seamless Connectivity Overview

 
Convergence is the growing phenomenon whereby a range of content types (audio, 
8.1
video, text, pictures) and services are distributed over different digital networks (fixed 
broadband, mobile, satellite, cable, digital terrestrial) to a variety of consumer devices (PCs, tablets, TVs and mobiles).  
 
In a convergent world, a mobile handset can receive voice calls, data, pictures, 
8.2
audio, video and text, all delivered over a mobile network. Similarly, television and 
video content is accessed using satellite, cable and digital terrestrial TV, or indeed 
via a fixed broadband connection or mobile network. 
 
Convergence has been changing the communications landscape for some years and 
8.3
is continuing apace. Some examples are obvious, such as the increasing use of 
internet-based TV services. Others are less obvious, particularly where they involve 
convergence between networks, but their implications for consumers are considerable; it is becoming increasingly possible to have seamless and ubiquitous 
access to communications services - a world of 'anything, anytime, anywhere'.   
 
Consequently, convergence is making new types of communications network 
8.4
available to consumers, as well as creating wider coverage and more capacity. In this chapter we outline some of the ways this is happening, and cover: 
- 
Different types of convergence and their implications for infrastructure. 
Increasingly, consumers are using different types of network and service interchangeably. In response, operators and service providers are having to 
ensure they can provide their services across multiple networks to multiple devices. 
- 
Fixed/mobile convergence, which is leading to the continuing and seemingly 
inexorable decline in use of fixed voice services, as consumers use newer forms 
of communication such as voice over internet protocol (VoIP) and instant 
messaging (IM) instead.  
- 
Broadcast TV convergence. Although the vast majority of viewing is broadcast 
TV, an increasing share is being consumed over the internet. (This is explored in detail in section 6).  
- 
Seamless connectivity: how this is benefiting consumers and making new 
services possible, particularly as more devices link to each other using the 'internet of things'.  
 
Our overall conclusion is that the divisions between different types of 
8.5
communications network, service and device are likely to continue to break down. Consumers will continue to benefit from new services, particularly over the internet, as the communications infrastructure develops. But these new developments also 
underline the benefits of wider coverage of fixed and mobile networks. 

## Network Implications Of Convergence Types Of Convergence

 
Convergence can take many forms. We tend to use the term in a number of distinct 
8.6
senses: 
- 
Device convergence, where one device can be used for more than one type of 
service. For example, your mobile can give you access to the internet, TV and radio as well as telephony.   
- 
Service convergence, where services that were once entirely separate 
become  increasingly interchangeable in consumers' minds160  and behaviour. 
Consider, for example, how consumers increasingly see fixed and mobile voice 
telephony as essentially the same type of service. 
- 
Network convergence, which is happening as transmission and distribution are 
being used to transmit more than one type of service, such as TV platforms that also broadcast radio.   
 
All these aspects of convergence - between traditional devices, services and 
8.7
networks - began with the introduction of digital technologies in the 1990s. They then 
accelerated hugely once the internet became a mass-market tool, and were given a 
further boost when multi-use devices such as smartphones and tablets emerged. 
More than anything, therefore, it is internet-based consumption which is driving the 
greatest challenge to existing business models and presenting new demands on infrastructure.  

## Implications For Operators

 
The extent to which operators will have to evolve their infrastructure will depend on 
8.8
how consumers change their behaviour over time.  
 
If consumers' use of communications services evolves slowly, perhaps because the 
8.9
innovations lack appeal or are too expensive, the fact that new services are available will not in itself lead to enduring changes in infrastructure.  
 
3D TV is a case in point. A few years ago, TV platform operators, broadcasters and 
8.10
manufacturers experimented with offering 3D channels to consumers, and there were 
suggestions that more network capacity would be needed to accommodate them. Although some viewers continue to use, and value, these channels (particularly for 
sport), they have failed to become a mass-market proposition. Indeed, the BBC 
ended 3D broadcasts in 2013. With this in mind, current innovations such as ultra HD (UHD) broadcast content are appearing, but there is no guarantee that they will 
succeed.  
 
For operators, meanwhile, convergence means continuous upgrades in 
8.11
infrastructure, such as adding bandwidth and adopting new technologies. It also means having to think about how to compete across a broader landscape, and consider offering services in multiple forms. Operators may be competing with new 
entrants such as 'over the top' (OTT) players (delivering a service over the general internet) who may not have their cost structure, or who can offer consumers the kind 
of flexibility - on-demand, anything, anywhere use - that traditional platforms find more difficult.  

 
Below, we consider in more detail two main areas where operators are having to 
8.12
respond to convergence: the move from fixed to mobile telephony, and the growing 
use of internet services as a supplement, or even a replacement, for TV.  

## Fixed-Mobile Convergence Fixed Telephony Is Available To Almost Everyone

 
In the past, fixed telephony was the main route for phone calls. Because of the 
8.13
universal service obligation (USO)161, coverage of fixed telephony is near-ubiquitous, 
and customer orders for new telephone lines are only declined when they are beyond 
a reasonable cost to provide.162  

## Take-Up Of Fixed Connections Is Now Being Driven By Demand For Broadband, Rather Than Voice Services

 
The total number of fixed residential and business connections has stayed 
8.14
approximately the same for the last three years, although there has been some growth in the number of residential fixed lines; from 23.9 million in 2011 to 25.0 
million in 2013.  
 
However, the main driver of residential fixed-line growth seems to be the customers 
8.15
wanting a broadband connection, rather than a fixed voice line. In fact, around 5% of UK homes have a fixed line but don't use it for voice services, while around 11% of households say they prefer mobile access exclusively for both voice and internet 
services.163 

 
2013 
2012 
2011 
Fixed lines, including ISDN (millions) 
33.4 
33.2 
33.3 
Fixed lines, residential only (millions) 
25.0 
24.4 
23.9 
Fixed voice call minutes (billions) 
91.6 
102.5 
111.1 
Source: Ofcom, Communications Market Report 2014 

                                               
 
162 Between January and June 2014, 164 orders were placed with BT for new telephone lines that would exceed the reasonable cost limit. Of these, 119 were cancelled by the user during the process, 31 are still in progress and 14 were completed. These were provided mainly to rural customers, but there were some instances of orders from urban customers building a second property on an existing site. 

## Use Of Fixed Voice Continues To Decline

 
Consumer-led convergence is developing rapidly in voice telephony. The charts 
8.16
below show that fixed call volumes fell by over 10 billion minutes between 2012 and 
2013, yet outgoing mobile call minutes only rose by 2 billion minutes over the same period. Nor are voice calls being replaced by SMS (texts); these are also falling.   
 
 
Source: Ofcom Communications Market Report 2014 

 
Consumers are increasingly replacing fixed voice calls with other forms of 
8.17
communication such as VoIP, IM or social networking. Calls via OTT VoIP service providers can usually be made free of charge or by payment for the data used. 
Information from KCOM164 suggests that whereas a third of its total calls were VoIP 
calls in early 2012, this has now risen to almost half.  

## New Technologies Are Set To Accelerate Fixed-Mobile Convergence

 
Historically, operators have tried to offer services that combine the cost benefits of 
8.18
fixed voice with the flexibility of mobile. For example, handsets were introduced that 
used fixed networks within the home and mobile networks outside it, while retaining a 
single device and telephone number.165 This wasn't sufficiently popular; the handsets 
weren't seen as attractive and there were reliability issues. However, this is now changing and a range of developments make it increasingly likely that fixed-mobile convergence will proceed further. These include: 

- 
Growing use of VoIP. Figure 101, below, shows that there has been steady 
growth in the use of VoIP on mobile handsets. In most cases these come as 
OTT services provided as an app on a smartphone, such as Skype or Apple's FaceTime. Typically, the consumer needs a new user-ID specific to that service, 
but both fixed and mobile operators are now offering VoIP apps linked to a 
consumer's existing fixed or mobile telephone number. With the rising popularity of VoIP services, it's likely that other major operators will enter this space, 
potentially with features that OTT providers can't offer, such as quality of service 
guarantees. BT's One Voice (aimed at corporate users) is an example, and we expect others in the near future.  
- 
Wi-Fi calling.  Most VoIP services require consumers to use a specific app. 
This makes it clear to the user that VoIP calls are different from traditional voice calls. However, EE is planning to launch a Wi-Fi calling service later this year 
enabling calls to be made over a Wi-Fi connection without an app.166 The latest 
Apple iPhone also has Wi-Fi call functionality; users can make calls in exactly 
the same way as they would over the mobile network.167 These are both 
examples of service convergence, showing how users may not be aware of the network used for their calls.  
- 
Voice over LTE. At the moment, 4G or LTE mobiles use 3G or 2G networks for 
voice services, but mobile operators are likely to launch voice over LTE (VoLTE) services in the next year. Here, voice calls will be converted into data packets to be carried over the IP LTE network.  
 
Ofcom commissioned research into the possible evolution of both fixed and mobile 
8.19
voice networks.168 This found that convergence between fixed and mobile services 
can significantly cut operators' costs as services migrate away from legacy networks. 
In addition, converged mobile services will depend more strongly on fixed networks 
to allow improved coverage and capacity. For this reason, the ability of networks to support voice and data, from both fixed and mobile devices and handsets using IP-
based technology169, is likely to become increasingly important over time. 

## Broadcast Tv Convergence

 
The degree of convergence in broadcast TV has been more limited to date, but it is 
8.20
growing.  As we describe in section 6, broadcast TV viewing has remained steady and is being supplemented - rather than replaced - by viewing using IPTV, or via 
other devices such as mobiles and tablets.  
 
However, largely unnoticed by consumers, some convergence is taking place in TV 
8.21
streaming. Historically, broadcast TV was delivered to, and consumed on, television 
sets at home, usually in a linear fashion (i.e. watched live, as broadcast). However, the growing use of broadband over the past decade has meant that tablets, smart 
TVs and computers are now commonly used for viewing catch-up content (such as 
the BBC iPlayer). Fixed broadband and content providers have introduced caches to store this content closer to the customer, both to reduce the load on the rest of the network and to improve the consumer experience of streaming video. We examine these techniques for internet interconnection in more detail in section 9.  
 
Increasingly, consumers are also watching live IPTV content through services such 
8.22
as Now TV and YouView. Unlike catch-up programming, this content cannot be 
cached in advanced, so operators have to find a different way to manage the demand these services place on the network. Some fixed operators, such as BT and 
TalkTalk, are using an approach called 'multicast' for their IPTV services (see section 6). This is a more efficient use of network capacity: it allows the same content to be streamed to multiple users with minimal bandwidth provision (i.e. on a one-to-many basis). Multicasting also reduces the amount of duplicated traffic that needs to be carried to a local node, and providers have greater control, since content is not being delivered over the general internet. This enables a broadcast-quality service for 
consumers.  
 
Because IPTV-delivered channels are listed alongside those on DTT, YouView 
8.23
consumers do not differentiate between programmes delivered through broadcast 
and broadband. As services such as YouView become more popular, it is likely that 
watching linear content on IP networks will continue to grow, provided the quality of the video stream can be maintained by operators.  

## Seamless Connectivity Wireless Networks Allow Consumers To Access Anything, Anytime, Anywhere

 
As mentioned above, a major driver of convergence is the growing use of 
8.24
smartphones.  
 
Consumers have become used to being able to access the internet wherever they 
8.25
are. As discussed in section 5, mobile data use continues to grow rapidly as 
consumers increasingly use their smartphones for data-hungry activities such as 
watching online video. In turn, providers of communications services are increasingly tailoring their services for mobile users and relying on mobile for revenues. Indeed, 
two-thirds of Facebook's advertising revenue comes from mobile, which also accounts for 40% of YouTube viewing.  

 
The fact that many consumers rely on having access to the internet anywhere 
8.26
underlines the importance of ensuring that mobile is available near-universally. It's 
also one of the reasons why Ofcom has included licence conditions in O2's licence requiring it to provide indoor 4G coverage to at least 98% of the population by the 
end of 2017.170 The growing number of Wi-Fi hotpots also play an important role in 
ensuring consumers can access communications services on the move.  

## Consumers Can Move Increasingly Seamlessly Between Networks

 
Consumers are already using fixed and mobile networks interchangeably, with 'Wi-Fi 
8.27
offloading' the most obvious example: consumers use Wi-Fi hotspots when it is 
cheaper and/or more reliable.  
 
New technology will make interaction between networks seamless, by improving the 
8.28
ways in which devices can migrate from one network to another. One example is 'soft SIMs'. Unlike traditional SIM cards, which have limited ability to connect to different 
networks, soft SIMs rely on software that allows consumers to move much more 
easily between mobile networks, wherever there is coverage. Apple has incorporated a soft SIM into its latest iPad Air.  
 
Improved connectivity could also come through self-optimising networks (SON) that 
8.29
use technologies such as Passpoint 2.0. These allow the seamless authentication of devices across mobile networks, and automatic integration of Wi-Fi access points, allowing consumers to move onto, and between, Wi-Fi networks without logging on 
separately each time.  
 
The architecture of mobile networks is also evolving. Although they will continue to 
8.30
rely on a core backbone of large macrocell transmitters and receivers, this 
architecture is being increasingly supplemented by a variety of other networks, 
including femtocells, Wi-Fi and small cells. Small cells already improve mobile coverage at low cost in indoor locations (e.g. shopping centres), and localised notspots, and are likely to be deployed more extensively.  
 
Future technologies such as soft SIMs in handsets will allow deeper integration 
8.31
between alternative small-cell networks, and facilitate switching between fixed and 
mobile networks. In turn, there are likely to be new forms of mobile network provision and changes in consumer propositions over time.  

## 9 Internet Networks Overview

 
Earlier sections of this document have focused on the access networks that 
9.1
communication providers (CPs) use to provide connections to customers, either as 
the direct physical line to the home via fibre or copper for fixed networks, or the radio 
coverage from masts for mobile networks. These connections are used to provide access to the internet and the vast range of internet services.  
 
This chapter considers three topics associated with internet networks and 
9.2
connectivity: internet service providers' (ISPs') management of data use by 
consumers, ISPs' interconnection arrangements and IP addressing.  
 
ISPs use various approaches to manage data use on their networks. They can apply 
9.3
caps to limit the amount of data a customer can use, or apply traffic management to limit customers' speeds or the applications they can use. We have found that: 
- 
Managing consumers' data use plays an important role in increasing the efficiency of network capacity management.  
- 
There has been increased pressure on ISPs to be as transparent as possible about their management practices. Broadly speaking, ISPs have simplified their packages and improved the information they provide to their customers, thereby improving transparency. 
- 
All major UK fixed and mobile internet access providers have now signed up to 
the Broadband Stakeholder Group's Open Internet Code of Practice171 and are 
committed to an effective self-regulatory model, a key part of Government policy 
on Net Neutrality.   
 
In order to allow their subscribers to access internet content, ISPs must interconnect 
9.4
with other network operators. Increasingly, ISPs are also making such internet interconnection arrangements with the content delivery networks (CDNs) and individual content providers which are the source of significant volumes of the data traffic which subscribers consume. We have found that: 
- 
Internet service providers are using a variety of different interconnection arrangements to manage the demand for content from their customers. 
- 
There has been a significant shift of data traffic to content delivery networks and peering interconnections, on both fixed and mobile networks. The proportion of traffic provided by the top four interconnection partners (Google, Netflix, Akamai and Limelight) has also increased. 
- 
The majority of peering traffic is still exchanged at locations in London, but this varies by the type of connection. For example, CDN traffic is distributed across the country more widely than peering and transit traffic. 
 
Some ISPs' approaches to managing use and interconnection arrangements may 
9.5
impact on net neutrality. While some approaches are beneficial to the user 
experience, and contribute to efficient use of the network, inappropriate use of these tools can have a negative impact on consumers.  
 
We also report on the use of IPv4 and IPv6172 addresses. The internet relies on these 
9.6
addresses to route data across the globe, but IPv4 addresses are running out. There are a number of options for continuing to meet the demand for IP addresses:  
- 
Trading and transfer of IPv4 addresses. Organisations with surplus IPv4 addresses can transfer their addresses to those who need them. 
- 
Using the technique 'network address translation' (NAT) to share a single IP address between multiple users, so that the remaining allocation of addresses is used more efficiently. 
- 
Introducing a new IP address system, IPv6, which uses a much larger address space to ensure that there will be enough addresses to meet the demand.  
 
ISPs estimate that they will run out of IPv4 addresses in the next two to five years. 
9.7
Many are thinking of deploying IPv6, and some are also using techniques such as carrier-grade NAT, to use their remaining IPv4 addresses more efficiently.   

## Managing Data Use Within Isp Networks Introduction

 
The growth of the internet has created an opportunity and a major challenge for 
9.8
network operators: they must consider how they will cope with the huge growth in 
data traffic. Networks must have the capacity to accommodate overall data volumes 
as well as peak instantaneous demand. Operators typically do this by:  
- 
Investing in new capacity in their own networks and in their upstream links to 
service providers. Dedicated upstream links to particularly popular content 
enable operators to deliver a consistently high quality experience to consumers 
accessing this popular content.   
- 
Strategically managing existing capacity, particularly during peak load 
conditions. ISPs have a number of ways to manage existing capacity over their 
networks. 
 
The three main approaches to managing customers' use are:  
9.9
- 
Usage caps **or data caps**: the user is limited to a certain amount of data 
consumption, for instance 10GB per month; 
- 
Traffic management (speeds): ISPs may impose speed limits on services and 
applications that place the most demands on the network and/or they may prioritise the types of traffic that are most affected by traffic congestion; for instance, real-time online services such as voice over IP (VoIP) and video streaming. Some ISPs may also limit the speeds of uploaded or downloaded data at peak hours. Even in the absence of data caps, such restrictions may 
have the unintended consequence of reducing the amount of data uploaded and downloaded during those times; and  

- 
Traffic management (application and service restrictions): ISPs may 
manage use by restricting users from connecting devices, such as their smartphones to their laptops to share the internet connection ('tethering'). ISPs may also restrict or block access to specific applications that place heavy demands on the network, such as video streaming or peer-to-peer file sharing. 
 
ISPs may use these different approaches individually or in combination.  
9.10
 
Managing consumers' data use can play an important role in increasing the efficiency 
9.11
with which network capacity is managed. The various approaches to managing use 
are generally deployed to deliver a consistent and satisfactory experience for all 
users. Managing use is often intended to ensure that users pay for the demand they 
place on the network (e.g. mobile packages, where customers pay for the data they use). In these cases, lighter users pay less for their use and are not penalised for the 
heavy consumption of other users. Charging consumers according to their use also 
reduces the need for high minimum service charges, and enables affordable access 
to the internet for a wide range of users. Traffic management practices can also be 
used to protect safety-critical traffic, such as calls to the emergency services.  
 
However, there may be other motivations behind some traffic management practices. 
9.12
In particular, it is possible that access providers might prioritise their own online 
services, or those supplied by a favoured partner, over equivalent services provided by others. The widespread adoption of such practices could damage online innovation and competition. 
 
More generally, we think it is critical that network operators ensure that there is 
9.13
adequate capacity on their networks available for 'best-efforts' internet access, under 
which they aim to convey all traffic on more or less equal terms. If online service providers cannot rely on 'best-efforts' delivery being of adequate quality, this could 
diminish the level of innovation that has been fostered by the "open internet".  We 
would be concerned if network operators managed traffic and services to a degree 
that left insufficient network capacity for best-efforts traffic.  

## Approaches To Managing Data Use

 
Operators have a number of approaches of managing use.  
9.14

## Fixed Broadband Usage Caps

 
Usage caps are a traffic management tool used by network operators to limit data 
9.15
use.  They are often used to design packages that fit consumers' varying data needs. 
 
Usage caps can be imposed in various ways. A typical cap will limit users to a certain 
9.16
amount of data per month. In other models, operators limit the amount of data use during specific times of the day (e.g. at peak periods).   
 
Depending on the package and provider, broadband data caps can range from 2GB 
9.17
to 750GB of data per month. All the fixed broadband operators173 now also offer at 
least one package with no data caps, while some providers exclusively offer 
'unlimited' broadband packages. Unlimited packages are popular: approximately 80% 
of fixed broadband customers are subscribed to uncapped packages.  

 
Exceeding a fixed broadband data cap can affect a consumer in a number of ways, 
9.18
such as additional data charges or a temporary reduction in access speed.  

## Mobile Usage Caps

 
Most mobile operators impose data caps on some of their packages. Many have 
9.19
offered unlimited data packages in the past, notably Three and Giffgaff, although Three announced this year that it would introduce caps, limiting the amount of data 
that customers can access via tethering174, even if their package includes 'unlimited' 
data.175 Giffgaff announced that it would remove the 'unlimited internet' component 
from two of its top pre-pay monthly plans.176 
 
The consequences of exceeding a mobile data cap are often similar to exceeding 
9.20
fixed broadband data caps. However, meeting a pre-pay tariff's data cap will 
generally result in a simple suspension of data services until more credit is added. 
 
Network operators may allow their subscribers to access 'zero-rated' applications or 
9.21
services (also described as 'sponsored data services').  A subscriber's use of a zerorated service will not count towards the data cap on their internet data package: for example, in Germany T-Mobile offers packages on which use of the music streaming service Spotify does not count towards the data cap. Although the data traffic of Spotify and competing music services may not be managed differently on the network, the traffic is treated differently in economic terms as the Spotify traffic does not count towards the customer's paid-for data allowance. In some circumstances, 
this may raise net neutrality concerns. 

## Traffic Management: Speed Restrictions

 
Traffic management is used by operators to control the speed of data transfer for 
9.22
certain applications or services in order to manage network capacity use. It is most often used where congestion occurs - at particularly busy times, or busy parts of the 
network. This can mean giving priority to services that are time-sensitive (like VoIP) 
and de-prioritising and/or actively slowing down services that are less timedependent, such as peer-to-peer (P2P) traffic.  
 
The type of traffic management employed varies across ISPs. Many ISPs do not 
9.23
apply traffic management and may advertise their service as 'truly unlimited', both in terms of data use and throttling of certain services (i.e. reducing data speeds for 
certain services).177 Others apply traffic management in some form, sometimes to 
different degrees across different broadband packages. In some packages, particular 
types of traffic are given greater priority, and consumers who particularly value a type of service can choose packages that prioritise such traffic.  
 
A common form of traffic management is to place restrictions on P2P178 services 
9.24
such as BitTorrent. This is because the design of some P2P software increases data use across a network to fill the available capacity. This can degrade performance for other applications or users sharing the same capacity. Furthermore, P2P downloads 
are not typically as time-dependent as other applications (such as music or video streaming, gaming and VoIP). In controlling P2P traffic, ISPs and operators can keep network infrastructure costs down without adversely affecting the typical user 
experience. However, the impact of traffic management on users of P2P services can be significant. In some cases speeds of P2P traffic can be reduced to a fraction of the speed of other traffic on the network. 

## Traffic Management: Application And Service Restrictions

 
ISPs and MNOs may also place restrictions on the types of applications and services 
9.25
that users can access. Rather than altering the speeds of certain applications and 
services in order to manage network capacity, this approach to traffic management 
completely blocks services, or entire classes of services, from a specific content or 
service provider. According to the Body of European Regulators of Electronic 
Communications (BEREC), the most frequently-reported restrictions are the blocking 
of P2P traffic on both fixed and mobile networks, as well as the blocking of VoIP 
traffic on mobile networks.179  
 
However, this type of restriction does not necessarily limit demand or enable fairer 
9.26
network management.180 Restricting access to services such as VoIP on mobile 
networks appears to consumers to be commercially-driven: its objective is to 
incentivise consumers to use the network operator's own voice service. 
 
MNOs in particular have been known to impose restrictions on the use of VoIP. For 
9.27
example, in the past, Vodafone UK customers were able to use VoIP services only on the more expensive packages. However, traffic management policies and usage restrictions are evolving over time in response to changing customer behaviour and competition in the marketplace. VoIP and video-calling applications such as Viber, Google Hangouts, Skype and Facetime are becoming increasingly popular among 
consumers.181 
 
UK MNOs now have stopped offering packages with VoIP blocks; Vodafone182 and 
9.28
EE are now signatories to the Open Internet Code of Practice.183  Virgin Media has 
also joined the Code, so all major fixed ISPs are also covered. We welcome these positive developments in transparency. 
 
As discussed in the section below, it is crucial that consumers are provided with clear 
9.29
information on each operator's specific policies, so that they can reasonably compare 
the options available to them.  

## Transparency

 
In the past few years, there has been increased pressure on mobile and fixed 
9.30
operators to be transparent about the ways in which they manage consumers' data 
use.  
 
ISPs are subject to an obligation184 to be open with consumers about their traffic 
9.31
management practices. Under the auspices of the Broadband Stakeholder Group 
(BSG), and with Ofcom and Government support and encouragement, the ISPs 
published the *Voluntary Industry Code of Practice on Traffic Management* in 
2011.185 186 Signatories to the Code publish the details of their traffic management 
practices. Each ISP must:  
- 
Provide the necessary information to consumers about what traffic management takes place, why and with what impact;  
- 
Provide customers with clear, easy-to-understand information on traffic 
management so that they can better compare broadband packages; and  
- 
Publish a common Key Facts Indicator (KFI) table, summarising the traffic management policy for each package on offer. These tables have been available on signatories' websites since July 2011. 
 
In 2013, Ofcom187 investigated whether consumer information on traffic management 
9.32
was sufficiently clear to consumers, resulting in the publication of its Consumer 
Guide to Traffic Management.188 The guide was developed following consumer 
research189 to understand how consumers are buying and using fixed broadband 
services, and their knowledge of traffic management policies. 
 
The research identified a number of ways in which the quality of traffic management 
9.33
information could be improved. Broadly, consumers participating in the research suggested that ISPs should communicate their traffic management policies in clearer and simpler language, use specific measurement criteria when 'fair usage' policies are applied, and explain succinctly how these policies affect their range of products. 
 
Following the publication of this research in 2013, and in line with its commitments, 
9.34
the BSG worked with ISP signatories to change the ways in which ISPs present traffic management information to their customers. They now provide introductory information explaining their policies, and the impact of the policies on their services, and have updated their KFIs to include glossaries of technical terms.      
 
We have reviewed the KFIs, and asked communications providers to confirm that 
9.35
they adhere to them. Our conclusion is that, broadly, transparency about traffic management practices has improved, and in general traffic management policies are less restrictive than previously. In particular, MNOs have dropped specific service blocks on mainstream packages. 

## Usage Cap Transparency

 
Transparency surrounding usage caps and 'fair-use' policies has been the subject of 
9.36
particular scrutiny. In the past, some ISPs advertised fixed and mobile broadband 
services as 'unlimited' when these services were in fact subject to a fair-use policy; in effect, a usage cap. Some consumers were being misled by the term 'unlimited', and 
many consumers signing up to such packages were not aware of the fair use policies. 
 
Guidance introduced by the Advertising Standards Authority (ASA) in 2011190 
9.37
addressed this problem. The guidance says that fixed and mobile broadband services should only be advertised as 'unlimited' when there are genuinely no 
restrictions on the amount of data that can be used.191  
 
Since the introduction of the guidance, the ASA has taken action against various 
9.38
broadband providers due to their usage cap advertising. For example, in 2013 the 
ASA banned Virgin Media from claiming: "Unlimited downloads. Download and browse as much as you like with no caps and no hidden charges", because there were restrictions in place that affected some customers' ability to download data 
and/or their downloads speeds.192 

## Net Neutrality

 
As already discussed, the growth in the use of the internet creates a challenge for 
9.39
network operators, who must consider how best to meet their subscribers' demands. 
They are likely to do so partly by investing in new capacity, and partly by rationing their existing capacity, using the various approaches described above.  
 
The different approaches to managing subscribers' data use may have different 
9.40
effects on users' experience of the openness of the internet - and these differences are at the heart of the net neutrality debate. Some argue that some network management practices by network operators and ISPs could be discriminatory, in particular by undermining the ease with which innovative services can launch and become successful. 
 
The net neutrality debate has become a significant issue on the international 
9.41
telecoms policy agenda. In 2013 the European Commission published a draft 
legislative package: *Connected Continent: Building a Telecoms Single Market*193 , 
which included proposals for net neutrality rules. Among the Commission's proposals were a prohibition on "discriminatory blocking and throttling", and rules for traffic management. At the time of writing, the Connected Continent regulation is still being negotiated, and the net neutrality provisions remain on the table.  
 
Ofcom's approach to net neutrality, as set out in our statement published in 2011194, 
9.42
recognises that widespread discriminatory behaviour by ISPs could put at risk the openness of the internet, and its continued operation as a platform for rapid and 
diverse innovation.  However, in the first instance, Ofcom believes that effective competition among ISPs should ensure that consumers benefit from the open internet's diversity of services and innovation, as long as:  

- 
Sufficient information is available to enable consumers to make the right purchasing decisions; and  
- 
Consumers are able to act on this information by switching providers, where 
appropriate.   
 
A key concern in relation to net neutrality is the risk that ISPs will seek to manage 
9.43
their subscribers' access to online services to further their own commercial objectives, to the detriment of end-users. For example, net neutrality concerns might 
arise in the case of a broadband provider blocking or restricting access to third-party 
video-on-demand (VoD) services such as Netflix to favour their own internet TV 
service. Similarly, an ISP might seek to charge online service providers for access to 
their subscribers, and block those who do not pay. The French ISP Free195 briefly 
blocked Google's ads in early 2013, in what was seen as an effort to force Google to 
pay to access consumers.196 
 
We consider that the widespread adoption of such practices could pose a risk to the 
9.44
operation of the internet as an open platform.  This could limit its potential to support 
the rapid growth and broad span of innovation which has characterised it until now.  
 
As outlined above, some traffic management can be beneficial if it improves the 
9.45
delivery of time-sensitive services such as streaming audio and video. It is therefore 
important to distinguish 'reasonable' from 'unreasonable' traffic management.  
 
The phrase "unreasonable traffic management" is used to describe practices that aim 
9.46
to further the commercial interests of the network operator, but do not appear to benefit the consumer, such as selective blocking of VoD services (as above) or VoIP on mobile networks.  
 
'Reasonable' traffic management practices are those which aim to improve the 
9.47
consumer's quality of experience;  for example, managing network congestion or 
blocking access to content identified as unlawful. We are of the view that 
'unreasonable' traffic management is highly undesirable.  
 
While we maintain that unreasonable traffic management, such as blocking VoIP, is 
9.48
highly undesirable, we believe that there is currently no evidence that such practices are harming UK consumers' overall ability to access the open internet, or impeding innovation. Indeed, unrestricted service options are available from a number of competitive providers, both fixed and mobile. As a result, we do not think there is a need to intervene now to restrict or modify the traffic management practices adopted 
by the main access providers.  

## Net Neutrality And Interconnection Arrangements

 
Historically, the net neutrality debate has focused on the management of access 
9.49
networks, and the potential constraints on innovation which this might cause. More 
recently, concerns have been raised over the interconnection arrangements between content providers and access network operators - illustrated most clearly in the public dispute between Netflix and Comcast.197 To some extent this wider focus is justified: interconnection arrangements can affect consumers' ability to access specific online services as much as traffic management in the access network. But it is important to use the appropriate frame of reference in examining commercial disputes over interconnection arrangements - the issues are not strictly the same as access network management, as interconnection is an essential aspect of internet operations, and interconnection agreements are primarily between network operators. Interconnection is discussed further below. 

## Interconnection With Other Networks Introduction

 
In the section above we discussed the techniques ISPs use to manage traffic within 
9.50
their networks. The ways in which they connect to content outside their network also 
affects consumers' ability to access the online services of their choice. 

## Types Of Interconnection

 
Traditionally, there were two main ways in which ISPs connected to content, service  
9.51
providers and other ISPs: 
- 
Peering: an agreement between two network providers to exchange traffic, 
either in private or via a public peering internet exchange; and  
- 
Transit: the ISP pays for bandwidth from a provider of core internet connectivity. 
All ISPs need a transit connection to provide access to services hosted on networks with which they are not directly peered. Transit is often used to connect to services hosted in other countries. 
 
More recently, content providers have begun using content delivery networks (CDNs) 
9.52
to store their content at locations closer to the end-user. The ISP connects to the 
CDN for a more direct, and potentially higher quality, route between the content and 
the end-user. For example, companies like Netflix use CDNs to place copies of their video library in multiple locations across the globe, making it easier to serve video to 
many customers simultaneously in multiple territories. 
 
The use of a CDN may also offer bandwidth savings for the terminating ISP, which 
9.53
does not have to use internet connectivity for which it is paying (e.g. potentially via a 
paid-for transit circuit) every time a piece of content is requested by a customer. It 
benefits the content provider as the customer has a better experience of accessing that content.  
 
Many CDNs are now being extended, to incorporate some or all of the data storage 
9.54
capacity that hosts end-users' content in 'caching servers'198 in the access provider's 
own network. This further reduces transit or backhaul connectivity costs and improves the customer experience. 
 
Peering takes place at a location agreed by both parties. In many cases these will be 
9.55
at internet exchange points (IXPs); locations built to facilitate peering. Each ISP 
installs a circuit from its network into a peering point and connects it to another 
network, allowing the exchange of traffic without incurring transit costs. As multiple networks all have a presence at the same physical location, it becomes cheaper for 
all these networks to interconnect with each other.  
 
In the UK a large number of public peering points - 'internet exchanges' - are located 
9.56
in London. The London Internet Exchange (LINX) and London Network Access Point 
(LONAP) are two of the largest not-for-profit organisations providing these 
interconnect locations. Some exchange points are located elsewhere: Leeds, 
Manchester, Edinburgh, and soon, Cardiff.199 A number of ISPs, often those with an 
international network footprint, also peer at other leading IXPs, such as AMS-IX in Amsterdam.  
 
Traditionally, peering took place between broadly equivalent actors (hence 'peers') in 
9.57
the internet value chain; i.e. access providers or 'Tier 1' providers of core internet 
connectivity. These arrangements were predicated on roughly symmetrical traffic flows, broadly equivalent benefits and, consequently, the assumption that each party 
should bear its own direct costs.  
 
Increasingly, however, peering arrangements are being put in place that involve 
9.58
actors in the value chain with highly asymmetric traffic flows. For example, the BBC has peering arrangements with a number of ISPs, so that its iPlayer services can be 
delivered over a peered link. This peering arrangement is advantageous to the ISP, as it frees up its transit connections for other traffic. This leads to improved speeds 
and reliability for the relevant services, thereby giving consumers a better 
experience.200   
 
The BBC and other large content businesses can also reduce costs201 by adopting a 
9.59
peering-based interconnection strategy, as this is typically cheaper than transit for delivering content at larger data volumes. However, in some instances and in some markets, such asymmetrical interconnection arrangements can incur fees payable 
from one party to the other.  
 
Content providers like Google, Netflix and Spotify are adopting a similar approach 
9.60
and are also embedding servers hosting their most popular and frequently-accessed 
content in ISPs' access networks, even closer to the end-users. Embedding servers in the ISPs' access networks may more properly be termed 'integrated CDN'; in other 
words, offering the same advantages as third-party CDNs such as Akamai and Limelight, but bringing the content even closer to the customer, so that transport 
costs are further reduced. This is, however, viable only for the largest content 
providers, whose scale makes the required investment economically viable.   
 
The extensive use of peering, particularly for this type of content delivery, may lead 
9.61
to differentiated performance, with content services that use CDNs or peering 
interconnection potentially facing lower delivery costs and/or higher quality. It might 
even be argued that this is another deviation from a truly neutral internet. In principle, 
CDNs and direct peering may have benefits for consumers, as it can allow them to 
receive services, particularly time-sensitive ones like video streams, at more reliable 
quality, and typically reduce costs for content providers and network operators.  
 
It remains to be seen, however, whether the adoption of lower cost or more efficient 
9.62
approaches to distribution - including CDNs and provider-specific peering 
arrangements - will lead to consumer detriment. Some of these arrangements may 
only be available to large-scale operators, allowing them to ensure high quality 
content delivery, while new providers may be unable to ensure that their services are 
accessible at satisfactory quality, and so may face difficulty in establishing 
themselves in the market. However, the extent of this risk is unclear, and may be mitigated by the fact that small content services can potentially access scaleappropriate CDN delivery, or can buy their connectivity from an ISP with good peering relationships.  

## Internet Interconnect Arrangements In The Uk Types Of Interconnections

 
Figure 103 below shows that fixed operators use a larger proportion than mobile 
9.63
operators of CDN traffic. The proportion of traffic via a CDN has increased for both types of networks since last year. 
 
This year, we have seen a significant shift of data traffic to CDN and peering 
9.64
connections, for both fixed and mobile networks, compared to the same analysis in 
the 2013 report. This is unsurprising, as growth in data consumption has been driven 
by the increase in online streaming.202 With the roll-out of faster mobile networks we 
expect the use of CDN and private peering to grow for mobile networks. Globally, 
Arthur D Little estimate that the number of CDN operators has grown significantly, 
from 25 providers in 2006 to 155 in 2013.203  
 
The proportion of traffic that is provided by the top four interconnection partners has 
9.65
also increased. For some fixed networks, the proportion of traffic delivered via Google, Netflix, Akamai and Limelight makes up around 60% of all interconnecting traffic. On mobile networks, this proportion is lower; between 30-40% of all 
interconnecting traffic. This shows that the source of internet data is increasingly consolidating into a small number of providers.  
                                               

## Location Of Interconnections

Source: Ofcom analysis of operator data 

 
Figure 104 shows the distribution of interconnecting traffic by the location and type of 
9.66
interconnect. Over 60% of all interconnect traffic is shared via locations in London. This proportion varies by the type of interconnection.  
 
Peering connections, including public and private peering, have the largest proportion 
9.67
of interconnect traffic exchanged in London. This is unsurprising, given that many 
operators are based in London. After London, around 20% of peering traffic is 
exchanged at other large co-location facilities in Europe, mainly in Frankfurt and Amsterdam.  
 
Our data suggest that only a small proportion of traffic is carried across the other 
9.68
regional interconnections in the UK. This is probably due to the smaller number of networks currently present at these locations; these internet exchange points are relatively new. LINX reports that approximately 50 networks are present in the 
internet exchange in Manchester and 11 in Scotland.204 By comparison, there are 
over 5000 networks at the internet exchanges in London.205  
 
Figure 104 also shows that CDN traffic is somewhat more dispersed across the UK 
9.69
than peering traffic, although the majority of the traffic is handed over in London. This 
is because the role of CDNs is to bring content closer to a customer. Therefore, more 
of the traffic is handed over to the CP's network at an interconnection point nearer to the customer.  
 

 
It is likely that many mobile operators will consider rolling out their CDNs closer to the 
9.70
customer because it may reduce the costs of conveying data through the core 
network, and improve the customer experience. EE is trialling a new technology in 
association with Nokia Networks called Liquid Applications, which could bring CDN 
capabilities to the mobile base station, to store popular content nearer to the 
customer.206  This type of local caching is already common in fixed networks. In some 
cases the servers are provided and managed by content providers such as Google 
(as discussed earlier). 
 
We expect the use of CDNs on both fixed and mobile networks to grow, as streaming 
9.71
of video increases. 

## Internet Addressing Introduction

 
The internet relies on a numeric address scheme to route data across the globe. For 
9.72
data to be delivered, each device connected to the internet must have access to a 
publicly routable internet protocol (IP) address. The current, widely deployed, version 
of IP is version 4 (IPv4) and provides around 4 billion unique addresses.  For 
example, the Ofcom website IPv4 address is 194.33.160.25. In this common notation, an IPv4 address is described as a 'dotted quad' notation. 
 
The US-based Internet Assigned Numbers Authority (IANA) oversees the distribution 
9.73
of IP address resources to the five regional internet registries (RIRs). The RIRs 
allocate blocks of IP addresses to telecommunications companies and internet service providers within their operational areas.  
 
IP address allocations in the UK are serviced by the RIR for Europe and the Middle 
9.74
East, Réseaux IP Européens Network Coordination Centre (RIPE NCC). This 
organisation is based in Amsterdam, and is established under Dutch law as a not-forprofit membership organisation. RIPE's diverse membership includes major telecommunications companies, internet service providers, academia, and 
commercial and public bodies. 
 
The internet has its origins within research and academic networks. The modern 
9.75
internet can trace its roots to a small, informally arranged network of networks. The rapid growth of internet use around the world has resulted in the demand for addresses far exceeding the number available in the IPv4 format. Although IPv4 
allows for approximately 4 billion IPv4 addresses, some of these are reserved for specific uses, e.g. private networks, carrier-grade network address translation or 
multicast.  
 
In 2011, IANA declared that the central pool of IPv4 addresses was "exhausted". 
9.76
Each of the RIRs is, in varying degrees, running out of its final block of IPv4 
addresses. Once a registry runs out, no further new IP addresses will be available. 
This may create a problem of scarcity for new entrants into the marketplace, because 
IP addresses will be limited. 
 
In an effort to slow the depletion of its limited IPv4 stock, since September 2012 the 
9.77
RIPE NCC has limited its assignment of IPv4 addresses, to new and existing 
members, to 1,024 addresses.207 This is a very small allocation, and unlikely to be adequate for many potential communications service providers.  

 
The Internet Engineering Task Force (IETF) has long been aware of the potential 
9.78
exhaustion of IPv4 addresses. In 1998 it standardised a successor to IPv4: internet 
protocol version 6 (IPv6).208 Work has been ongoing to further refine and develop 
IPv6 and related protocols  
 
IPv6 uses a much larger address space than IPv4: it allows for 340 undecillion209 
9.79
unique addresses. Many industry observers believe that the deployment of IPv6 is 
essential for the continued growth of the internet and is a key enabler for the 'internet 
of things'. However, the implementation of IPv6 will present some significant 
challenges: it requires investment in the network, by online service providers, and in 
updating or replacing consumers' equipment to handle the new-format IP addresses. 
 
The remainder of this subsection describes the current position in the UK in relation 
9.80
to the availability and utilisation of IPv4 and IPv6 addresses.  

## Overview Of Current Ip Addressing In The Uk Ipv4 Allocation And Use

 
In order for an IP network to connect to the public internet it must 'advertise' its 
9.81
existence on the internet. Ofcom commissioned an independent study to examine the 
levels of allocation and use of UK-assigned IPv4 and IPv6 address.210  The study 
used software functionality provided by RIPE NCC, RipeStat, which allows the exploration of public IP networks and the addresses they use in the global routing tables of other networks. Using these tools, the report authors were able to determine 
how much of the UK IP address allocation is in use and how much is not visible to the internet at large. (Note that the multinational nature of communication provider 
businesses often means that a UK company may have subsidiary organisations 
active in other countries, with their own IP address allocations provided by other 
regional internet registries. Quantifying and estimating the holding and use by UK 
entities IPv4 and IPv6 addresses will therefore always have an element of 
uncertainty.  We are confident, however, that the study presents a reasonably accurate picture of UK allocation and use.)  
 
Figure 105 depicts the total number of IPv4 addresses allocated and reachable on 
9.82
the public internet. The UK has approximately 70 million IPv4 addresses allocated by the RIPE NCC. Of this figure approximately 56 million IPv4 addresses are deemed as being reachable on the public internet. 
Source: RTFM LLC  
* Note: reachability data is available from 2004 using RIPEStat API  
 

 
We asked CPs to estimate the likely date of IPv4 exhaustion for their networks. They 
9.83
gave varying estimates of when they would run out of IPv4 addresses. Their 
estimates were between two and five years, based on the current rate of use.  

## Uk Legacy Address Space

 
Although UK Local Internet Registries (LIRs) now receive their IP address allocation 
9.84
from RIPE NNC, some organisations in the UK have IP addresses that were 
allocated before the formal establishment of the RIR system in 1997. These addresses are known as legacy IPv4 addresses, and were typically issued to Government, educational and commercial organisations requesting IP addresses at that time. The study undertaken by RTFM for Ofcom has calculated that there are about 53 million UK legacy IPv4 addresses. 
 
It should be noted that these legacy allocations were made when the internet was 
9.85
largely the preserve of academic and research networks, and the legacy address space is not directly managed by the five RIRs. There are a number of very largescale allocations in this 'legacy' address space that are largely, or completely, 
unused, and appear to be prime candidates for transfer or for trading to parties with IP address shortages. 
 
This study concluded that around only 20% of the UK legacy address space is 
9.86
routable on the public internet. This means that the remaining 80% of addresses are not being used on the public internet. They may, however, be in use in a private network setting, and this raises questions about efficiency. This figure has remained largely static since 2004.  
 
The UK legacy IP address space is dominated by two large assignments of 
9.87
addresses belonging to two UK Government departments, the Department for Work and Pensions (DWP) and the Ministry of Defence (MoD). These add up to over 33 million IP addresses. The study identified that neither the DWP nor the MoD IP address assignments were visible within global internet routing tables. It is reasonable to conclude that this address space is not in active use on the public internet. The figure below summarises the top five legacy IP address holders in the UK. 

Organisation 
Allocation 
Size 
Allocated Date 
51.0.0.0 
16777216 
01/09/1993 
UK Government Department for Work and Pensions 
DINSA Ministry of Defence 
25.0.0.0 
16777216 
01/01/1995 
BP 
149.177.0.0 
1245184 
13/05/1991 
British Telecommunications plc 
147.147.0.0 
393216 
01/01/1984 
Global Crossing VHSDR service 
171.28.0.0 
196608 
09/01/1995 

 
Figure 106 and Figure 107 show that other UK organisations are also holding 
9.88
considerable IPv4 address resources. There may be ways to bring these unused 
blocks of addresses into efficient use; for example, by recycling them to other UK- based access and service providers. This might be appropriate if there were 
concerns that the costs of IPv6 transition were prohibitive, and if IPv4 conservation 
methods caused significant problems. 

## Approaches To Manage The Demand For Ip Addresses

 
Although there remains a significant stock of unused IPv4 addresses, in the hands of 
9.89
UK institutions, demand for addresses continues to grow rapidly. In the absence of 
new supply, it will be necessary to consider how to access these unused stocks. There are three options: 
- 
trading IP addresses; 
- 
using the remaining allocation of addresses in a more efficient way; or 
- 
adopting IPv6 addressing   
 
To meet the demand for IPv4 addresses, an IPv4 address trading and transfer 
9.90
market has developed. Organisations with unused or surplus IPv4 address space211 
may effectively 'sell' or transfer it to entities seeking IPv4 addresses. This market 
incentivises owners of unused address ranges to make them available to others. We 
note that historically a value of up to $10 or more per address has been achieved. This may help alleviate any immediate shortfall currently being experienced, particularly by CPs or service providers which entered the market recently.  
 
Previously in this section we explained that RIPE has in place a final IPv4 address 
9.91
allocation policy.212 This policy limits the allocation of IPv4 addresses to 1,024 
addresses for each LIR from the final pool of IPv4 addresses held by RIPE.  RIPE's final allocation policy also requires that the requesting LIR has received an IPv6 allocation from an upstream LIR or the RIPE NCC to encourage the take-up of IPv6 addresses. 
 
However, the allocation of 1,024 IPv4 addresses may not be sufficient for some 
9.92
organisations. There is a transfer mechanism which currently permits the transfer of IPv4 address blocks between LIRs within the service area of the regional internet registry. Transfers from/to UK LIRs within the RIPE NCC service region began in 
2013; these are shown in the table below. 

| Size                 | Donors       |
|----------------------|--------------|
|                      |              |
| Recipients           | Date         |
| British Sky          | 06/05/2013 - |
| -                    |              |
| Easynet Global       |              |
| Broadcasting Limited | 05/08/2014   |
| Services Limited     |              |
| -                    |              |
| Telefonica UK        |              |
| Limited              |              |
| Linode, LLC          | 28/06/2013 - |
| -                    |              |
| Telecitygroup        |              |
| 14/08/2014           |              |
| International Ltd    |              |
| Gamma Telecom        | 08/04/2013 -   |
|----------------------|----------------|
| Holdings Ltd         | 23/04/2014     |
| 30,720               |                |
| -                    |                |
| Zytac Limited        |                |
| -                    |                |
| NetServices UK       |                |
| Limited              |                |
| -                    |                |
| Dark Group Ltd       |                |
| -                    |                |
| PAV I.T.             |                |
| SERVICES  PLC        |                |
| -                    |                |
| Zytac Limited        |                |
| 1,024                |                |
| -                    |                |
| Mailbox Internet Ltd |                |
| CentralNic Ltd       | 01/05/2014     |

Source: RTFM LLC 

## Efficient Use Of Remaining Addresses

 
Another way to manage the current availability of IPv4 addresses is to share the 
9.93
same address between multiple users using a technique called 'carrier grade network address translation (CGNAT). Typically, a CP can manage the sharing of a single 
address between multiple users by maintaining a register of the users of the common address, thereby 'translating' the public IP address to the correct end-user.  
 
Under some scenarios, the implementation of CGNAT can lead to complications, 
9.94
particularly for two-way services or those initiated remotely - as the end-user's IP address is masked by the address presented to the public network. As noted in last year's *Infrastructure Report Update,* this practice looks set to grow in order to allow 
use of 'IPv4 only' user equipment until it reaches the end of its life.    

## Adoption Of Ipv6 Addressing

 
Mobile operators are generally looking to introduce IPv6 addressing, as support for 
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IPv6 is built into the standard for LTE, so 4G networks running on LTE handsets are 
already compatible. However, further software upgrades or configuration changes within the network and in consumer devices may be required before mobile operators can begin to use IPv6 addresses. In the meantime, CGNAT is already in widespread use on mobile networks. 
 
Fixed operators are also considering CGNAT or a dual-stack approach, where IPv4 
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and IPv6 run in parallel. Unlike mobile, there are no upcoming changes in the 
technology incorporating IPv6, and therefore these have to be introduced separately. 
 
None of the major CPs we contacted are currently offering IPv6 addresses for their 
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residential/non-business users, although IPv6 services are available from some 
smaller fixed broadband providers, such as Andrews and Arnold. However, most major CPs told Ofcom they will be rolling out IPv6 addressing in the next 12 months.  
 
As mentioned, a potential barrier to the introduction of IPv6 addresses is the 
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availability of compatible equipment in the home. Most of the main fixed CPs that we contacted reported that the majority of the routers provided to customers were already IPv6-compatible. In aggregate, approximately 70% of consumer routers 
provided by these operators are IPv6-ready.  For these routers, only a firmware upgrade was necessary. However, customers owning older routers will require new IPv6-compatible hardware. 
 
Although residential CPs are deploying IPv6-ready equipment, there is some 
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evidence that take-up of IPv6 is not progressing very quickly. Ofcom commissioned an independent study to examine the current state of UK-assigned IPv4 and IPv6 
addresses among UK LIRs.  

|                                     |
|-------------------------------------|
| LIR Total                           |
|                                     |
| 1186                                |
| LIRs with IPv6 allocations          |
|                                     |
| 876                                 |
| LIRs with no IPv6 allocations       |
|                                     |
| 310                                 |
| LIRs with only IPv6 allocations (no |
| IPv4)                               |
|                                     |
| LIRs with reachable IPv6            |
|                                     |
| 332                                 |
| LIRs with unreachable IPv6          |
| 544                                 |

Source: RTFM LLC  

 Figure 109 above shows that nearly a quarter of UK LIRs213 have been allocated with 
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IPv6 addresses. However, only 38% of these (or 28% of all LIRs) have IP addresses which are publicly reachable. Therefore the vast majority of UK LIRs cannot be 
currently reached using IPv6 addresses.  
Source: RTFM LLC 

20 

 The Ofcom-commissioned study also considers the take-up of IPv6 addresses since 
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2000.  As shown in Figure 110, while the allocation of IPv6 addresses and the number of reachable addresses continues to grow, the rate of growth for both has 
slowed.  

## Domain Name System - A Uk Perspective Introduction

 Although IP addresses are used to route data packets across networks, including the 
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internet, internet users more typically use domain names in the form www.ofcom.org.uk. The domain name system (DNS) is needed to translate the 
domain name into an IP address, i.e. to convert www.ofcom.org.uk to *194.33.160.25.*  
 DNS is a globally distributed and hierarchical system and is primarily used to display 
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a human-readable domain name for an IP address on internet-connected devices 
and systems. DNS also offers other service such as reverse IP address / DNS lookups, cryptographic key publishing and service discovery.  
 The US-based Internet Corporation for Assigned Names and Numbers (ICANN) 
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currently coordinates the global co-ordination of DNS via its Internet Assigned 
Numbers Authority (IANA) function. 
 Aside from the familiar generic top-level domains (gTLD), such as .com, .net, .org 
9.105
etc., each country is assigned a two-letter country code - .uk is the country code toplevel domain (ccTLD) for the United Kingdom. In 2014 new gTLDs were deployed 
into the global DNS system; examples of new UK-centric gTLDs are .cymru, .london 
and .scot. 
 Nominet is the .uk ccTLD DNS registry that oversees most of the .uk namespace. 
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(.gov.uk and .ac.uk are managed by the Joint Academic Network (JANET)).This organisation supplied Ofcom with some contextual data and information for this report concerning DNS and IPv6. In this section we summarise these data, namely: 
- 
take-up of domain name security extensions (DNSSEC); 
- 
take-up of IPv6 among UK domain names; 
- 
security enhancements within the .uk DNS namespace; and  
- 
new generic topic-level domain names. 

## Domain Name System Security Extensions (Dnssec)

 DNS is critical to the proper running of the internet, as users rely on the distributed 
9.107
servers to return the correct IP address for the website they wish to access. DNS is a critical service allowing internet users to remember only familiar domain names, 
rather than having to remember an IP address.  
 However, as the internet has evolved - from a small trusted community of research 
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and university campus networks to the global scale we know today - malicious actors have started to seek to subvert and take advantage of systems at the heart of the internet, such as DNS. For example, cyber-criminals will attempt to subvert the local domain name system in an attempt to redirect traffic to malicious sites that they host, 
which they can use to infect end-user terminals with malware, or harvest sensitive personal information such as bank details.  

 In order to secure this critical system, the Internet Engineering Task Force has 
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developed a cryptographic means of authenticating DNS query responses. Domain 
name system security extensions (DNSSEC) provide an authenticated 'chain of trust' 
from the global root DNS server to the CP DNS server. This means that CP DNS servers are able cryptographically to verify the DNS query response; in particular, that the IP address response is coming from a legitimate source.  This gives a degree of assurance; ordinarily, this would mean that CPs' DNS services check the validity of the IP address within a DNS query response. This prevents tampering or fraudulent query responses which may lead to consumer harm.  
 The UK's Nominet played a key role in the enhancement of DNSSEC.214 
9.110
 In 2011 Ofcom commissioned an independent study to examine the adoption rate of 
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DNSSEC and the barriers to adoption.215  

## .Uk Dnssec Growth

 Nominet, the UK ccTLD DNS registry, confirmed that of the 10.5 million domain 
9.112
names in the .uk registry, a comparatively small, but increasing, number DNS domains are DNSSEC signed.  In 25 September 2014 the number of DNSSEC- signed domains was 12,301 (up from 6,736 on 5 July 2013). 

## Ipv6 Within The .Uk Dns Namespace

 For the 2013 Infrastructure Report Nominet supplied Ofcom with details of IPv6 
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address adoption among its membership. This year, Nominet supplied updated 
indicative data. Nominet estimates that approximately 8.6% of Nominet domains can be reached via IPv6 addresses, a slight drop from last year. It should be noted that IPv6 traffic volume is indicative only. Nominet is unable to provide absolute figures on IPv6 adoption, as some registrar DNS name servers may be located outside the UK and not are readily visible to Nominet.  

## Security Enhancement Within The .Uk Dns Namespace

 In addition to DNSSEC, Nominet has introduced a number of other features to 
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enhance security: 
- 
Domain locking. this is a service offered to Nominet registrars that allows 
registrants to choose to lock their DNS settings at the registry level.216 Under 
this measure, the DNS details of a domain name, including the IP address of the website, cannot be changed unless unlocking is explicitly requested by an authorised representative; and   
- 
Two-factor authentication. This provides increased security for Nominet registrars when accessing Nominet's systems.  

## New Generic Top-Level Domains (Gtlds)

 In 2011 the board of ICANN voted to expand the range of suffixes, i.e the generic 
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top-level domains (gTLDs) available within the global DNS system217. This has gone 
beyond the familiar DNS suffixes .com and .org to include a wider variety of domain endings.  Examples of new endings include .accountants, .rentals and .vodka. 
 In April 2014 London launched its own top-level domain Dot London (.london), 
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offering an alternative to existing domains such as .uk or .com.  In the first five 
months following Dot London's launch in April 2014, close to 45,000 registrations have been received from businesses, organisations and individuals around the world. 
 The UK ccTLD Registry, Nominet, also operates the registry service for two new 
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gTLDs: .cymru and .wales. The ICANN-accredited resellers, registrars contracted via 
Nominet, will offer both .cymru and .wales domains. DNSSEC is enabled, but not mandatory for .wales and .cymru gTLDs. The new .cymru and .wales domain will be available for registration in early 2015 and will support domains registered in both Welsh and English languages. 
 

## Annex 1 1 Methodology

This report uses new data gathered from the largest operators in each sector, as well as information already held by Ofcom. Where possible we have reused data already submitted to Ofcom by industry, in order to minimise the input required from stakeholders. In the main, we have only gathered data from the communications providers who make up a significant proportion of the residential market.  
For fixed networks, we used input from the four networks making up over 80% of that market, and from KCOM for services in Hull. In the case of mobile networks and digital terrestrial broadcast networks, we gathered data from all the network operators Much of the data presented in this report is based on the analysis of the new data provided by the operators. In this annex we summarise our approach to this analysis.   

## Fixed Broadband Networks Coverage

Our data on coverage of fixed broadband services is collected from the three main fixed network operators, BT, KCOM and Virgin Media.   
For the overall coverage of fixed broadband, reported in section 3, coverage is reported on a base of residential and small business premises (where we refer to 'premises' or 'households' in this report we are referring to the sum of residential and small business postal delivery points). We have excluded PO boxes and large organisations. In section 4, where we report on the availability of superfast broadband for SMEs, we use a base of only SME premises, for SMEs with at least one employee. This section also only reports on the coverage of networks provided by BT, KCOM and Virgin Media.  
We use premises data from Ordnance Survey AddressBase218 (June 2014 version), LPS 
OSNI Pointer219 for Northern Ireland and National Statistics Postcode Lookup (NSPL)220.  
Where two network operators are present in the same postcode, our source data is unable to indicate the degree of overlap between these networks. We estimate the coverage value for each postcode based on the average of the 'best case' (where there is least overlap) and 
'worst case' (where there is most overlap). This is the same methodology as by the consultancy IHS when compiling data for the European Commission's Digital Agenda Scorecard. 

## Take Up, Speeds And Data Use

We gathered data from the main fixed broadband Internet Service Providers (BT, KCOM, Sky, TalkTalk and Virgin Media) on both their retail services and the services they provide to other ISPs as a wholesale service.  
Our analysis of broadband speeds is based on information provided by these ISPs on the sync speed of each active line. This gives a measure the maximum possible connection speed achievable between the ISP's access network and the consumer premises. Line speed measurements are typically a few Mbit/s lower than sync speed measurement and they typically vary throughout the day depending on the level of congestion in the ISP's network. For cable networks, we have used the headline speed of the broadband package for each line. Due to the nature of the network, cable network providers have greater control of the speeds they can provide to customers on a line. They typically set a sync speed higher than the headline speed to ensure that end users can experience the advertised speeds. We set certain speed thresholds in some of our analysis, of 2Mbit/s, 10Mbit/s and 30Mbit/s. We include any ADSL/ADSL2+/VDSL modem sync speed below 2.2Mbit/s in our assessment of sub 2Mbit/s broadband as some data is used in protocol overheads and is therefore not available to the end user. We do not apply a margin to 10Mbit/s or 30Mbit/s because these thresholds are derived differently. We use 10Mbit/s because our data suggest that an average sync speed of 10Mbit/s is where data use begins to appear to not be constrained by speed. We use 30Mbit/s because this is our threshold and the European Commission's threshold for superfast broadband. 

Along with information about the sync speed of each line, we also gathered information about the postcode of that line. This provides the source data for our geographic analysis.  
Our analysis of data use uses information on the amount of data downloaded and uploaded on each line for June 2014. We also collected data on the total data use between the hours of 6pm - midnight, to assess data use at 'peak times'. Our analysis considers all lines where the amount of data downloaded in June was greater than zero. The analysis of overall traffic mix and encrypted traffic are calculated from the individual traffic mix provided by each ISP weighted by the total data downloaded by customers of that network. 

## Mobile Coverage

Our data on coverage of mobile networks is collected from the four mobile network operators, EE, O2, Three and Vodafone as 100m x 100m pixels referenced against the OSGB221 grid system for their coverage in March 2014 for 2G networks and June 2014 for 
3G and 4G networks. As 4G coverage is progressing rapidly we provide an update on 4G coverage based on coverage in October 2014. 

Premises coverage is calculated from a base of 28.3m postal delivery points taken from the Ordnance Survey AddressBase222 (June 2014 version) and LPS OSNI Pointer223 database for Northern Ireland. Roads data is taken from Ordnance Survey Meridian and LPS OSNI data sets.  We set the following signal strength thresholds when estimating coverage. 

 
Metric 
Outdoor 
In-car and in-door 
2G 
RxLev 
-86 dBm 
-76 dBm 
3G 
RSCP CPiCH 
-100 dBm 
-90 dBm 
4G 
RSRP 
-113 dBm 
-103 dBm 
 

## Data Use

We also gathered data on the amount of data uploaded and downloaded on each mobile cell in these networks.  
The analysis of overall traffic mix and encrypted traffic are calculated from the individual traffic mix provided by the four network operators weighted by the total data downloaded by customers of that network. 

## Femto Cells And Public Wi-Fi Femto Cells

Mobile network operators who have more than 1000 Femto cells on their network provided information on the postcodes where these Femto cells were issued.  

## Public Wi-Fi

Our data on public Wi-Fi was gathered from the main providers of this service (Arqiva, BT, EE, KCOM, O2, Sky and Virgin Media). These public Wi-Fi providers reported on the total data downloaded and uploaded at each of their public W-iFi access points and the postcode of these access points. Where they were able to do so, some operators also provided information on the proportion of data downloaded and uploaded on 2.4GHz and 5GHz Wi-Fi. 

## Broadcast Dtt And Dab Coverage

Our coverage metrics for coverage of digital television (DTT) and digital radio (DAB) represents the coverage of the national DTT and DAB services only. The table below sets out the networks and the multiplex owners for each of the multiplexes which are included in this analysis. 

Network 
Operator/Name 
Classification  
(DTT only) 
Public service Broadcast 
DTT 
BBC (BBC A) BBC (BBC B) Digital 3 and 4 (D34) 
Commercial 
DTT 
SDN (SDN) Arqiva (ARQA) Arqiva (ARQB) Arqiva (COM7) 

## Other Networks

Cable - Cable television services are assumed to be available where cable broadband services are available (see fixed networks). Satellite - Our reported figures for satellite coverage is the maximum theoretical level achievable. A variety of practical reasons mean that the availability of satellite services is likely to be lower. Please see our explanation in section 6 for further details.  

## Internet Internet Interconnection

We collected data from fixed internet service providers and mobile network operators about the nature of their internet interconnection (peering, transit or CDN), the capacity of that connection, the total volume of data through that interconnection in June 2014 and the physical location of that interconnection. 

From this, we calculated the proportion of traffic by each type of interconnection for each CP and weighted this by the total data used by their customers to estimate the overall mix of internet interconnection traffic. 

## Annex 2 2 Glossary

2G Second generation of mobile telephony systems. Uses digital transmission to support voice, low-speed data communications, and short messaging services. 

3G Third generation of mobile systems. Provides high-speed data transmission and supports multi-media applications such as video, audio and internet access, alongside conventional voice services. 

4G Fourth generation of mobile systems. It is designed to provide faster data download and upload speeds on mobile networks. 

Access network An electronic communications network which connects end-users to a service provider; running from the end-user's premises to a local access node and supporting the provision of access-based services. It is sometimes referred to as the 'local loop' or the 'last mile'. 

ADSL Asymmetric Digital Subscriber Line. A digital technology that allows the use of a standard telephone line to provide high-speed data communications. Allows higher speeds in one direction ('downstream' towards the customer) than the other. 

Backhaul The part of the communications network which connects the local exchange to the ISP's core network Base station This is the active equipment installed at a mobile transmitter site. The equipment installed determines the types of access technology that are used at that site. 

## Bduk Broadband Delivery Uk

Bit-rates The rate at which digital information is carried within a specified communications channel. 

Bonding A technique which could be used in DSL networks to improve data speeds by using multiple copper lines between the cabinet and the customer's premises.  
Broadband A data service or connection generally defined as being 'always on' and providing a bandwidth greater than narrowband connections. ccTLD Country Code Top-Level Domain. A top-level domain reserved for a country (e.g. .uk)  
CDN Content Delivery Network - Networks of servers based in many geographic locations designed to improve the speed and quality of content delivery by routing requests to the closest server.  
CGNAT Carrier Grade Network Address Translation - a technique that makes it possible to use fewer public IPv4 addresses to support more subscribers. 

Core network The central part of any network aggregating traffic from multiple backhaul and access networks.  
Data packet In networking, the smallest unit of information transmitted as a discrete entity from one node on the network to another. 

DCMS Department for Culture, Media and Sport. DNS Domain Name System - a system that translates domain names into IP addresses. 

DOCSIS Data Over Cable Service Interface Specification. It is a standard for the high speed transmission of data over cable networks.  
DSL Digital Subscriber Line. A family of technologies generally referred to as DSL, or xDSL, capable of transforming ordinary phone lines (also known as 'twisted copper pairs') into highspeed digital lines, capable of supporting advanced services such as fast internet access and video on demand. ADSL and VDSL (very high speed digital subscriber line) are variants of xDSL). 

ENISA European Network and Information Security Agency - a European Union agency responsible for cyber security. Femtocell A small base station, typically installed indoors to improve indoor mobile coverage. A residential femtocell uses the consumer's broadband connection to offload the mobile data onto the fixed network.  
FTTC Fibre to the Cabinet. Access network consisting of optical fibre extending from the access node to the street cabinet. The street cabinet is usually located only a few hundred metres from the subscribers' premises. The remaining segment of the access network from the cabinet to the customer is usually a copper pair. 

FTTH Fibre to the Home. A form of fibre optic communication delivery in which the optical signal reaches the end user's home.  
GPON Gigabit Passive Optical Network. A point to multipoint network (as opposed to a point to point network), where a single optical fibre is used to serve multiple premises using passive splitters at higher speeds.  
GSM Global Standard for Mobile telephony. This is the standard used for 2G mobile systems.   
Headline connection speed Marketed speed. HFC Hybrid Fibre Coaxial. A combined optical fibre and coaxial cable (a cable made up of a conductor and a tubular insulating layer) commonly used in cable networks.  
IP Internet Protocol. This is the packet data protocol used for routing and carrying data across the internet and similar networks.   
IPTV Internet Protocol Television. The term used for television and/or video signals that are delivered to subscribers or viewers using internet protocol (IP), the technology that is also used to access the internet. Typically used in the context of streamed linear and on-demand content, but sometimes for downloaded video clips.  
IPv4 - the fourth and most widely used version of the Internet Protocol. It defines IP 
addresses in a 32-bit format, which looks like 111.111.111.111  
IPv6 - the successor to IPv4. It uses 128-bit addresses, increasing the number of possible addresses.  
ISP Internet Service Provider. A company that provides access to the internet.   
Leased lines A transmission facility which is leased by an end user from a public carrier, and which is dedicated to that user's traffic. 

LINX London Internet Exchange. A not-for-profit membership organisation that provides peering services to Internet Service Providers.  
LIR Local Internet Registry - A body that is responsible for the distribution of IP addresses at a local level.  
LLU Local Loop Unbundling. LLU is the process where incumbent operators (in the UK this is BT and KCOM) make their local network (the lines that run from the customers' premises to the telephone exchange) available to other communications providers. The process requires the competitor to deploy its own equipment in the incumbent's local exchange and to establish a backhaul connection between this equipment and its core network. 

LTE Long Term Evolution. This is a 4G technology which is designed to provide faster upload and downloads speeds for data on mobile networks.   
MNO Mobile Network Operator, a provider who owns a cellular mobile network. 

Mobile Broadband Various types of wireless, high speed internet access through a mobile telephone or a mobile data dongle. 

Modem Sync Speed The modem sync speed represents the highest possible speed at which data can be transferred across the line. 

MVNO Mobile Virtual Network Operator. An organisation which provides mobile telephony services to its customers, but does not have allocation of spectrum or its own wireless network and instead, buys a wholesale service from a mobile network operator. 

Narrowband A service or connection providing data speeds up to 128kbit/s, for example via an analogue telephone line. 

NEAT National Emergency Alert for Telecoms - The telecom's industry's process for information and resource-sharing during an emergency. Not-spot An area which is not covered by fixed or mobile networks. 

Peer to Peer (P2P) A distributed application that uses end users' computers as nodes to deliver service applications. 

Point-to-Point A network topology where the end user is connected to the network via a dedicated fibre.  
PSTN Public Switched Telephone Network. The network that manages circuit switched fixed-line telephone systems.  
RIPE NCC Europe and the Middle East, Réseaux IP Européens Network Coordination Centre - The Regional Internet Registry with responsibility Europe, the Middle East and parts of Central Asia. It oversees the allocation and registration of IP addresses in these areas. 

RIR  Regional Internet Registry. Provide blocks of IP addresses to telecommunications companies and Internet Service Providers within an allocated region.  
SIM Subscriber Identity Module. A SIM is a small flat electronic chip that identifies a mobile customer and the mobile operator. A mobile phone must have a SIM before it can be used.  
Smartphone A mobile phone that offers more advanced computing ability and connectivity than a contemporary basic 'feature' phone.  
Superfast broadband The next generation of faster broadband services, which delivers headline download speeds of greater than 30 Mbit/s. 

SLU Sub-Loop Unbundling. This is where the unbundling of the access line takes place at the street side cabinet (rather than the exchange as for LLU) for a communications provider to gain control of the access line to the customer.  
Telecommunications Conveyance over distance of speech, music and other sounds, visual images or signals by electric, magnetic or electro-magnetic means.  
Transmitter A device which amplifies an electrical signal at a frequency to be converted, by means of an aerial, into an electromagnetic wave (or radio wave). The term is commonly used to include other, attached devices, which impose a more simple signal onto the frequency, which is then sent as a radio wave. The term is sometimes also used to include the cable and aerial system referred to above, and indeed the whole electrical, electronic and physical system at the site of the transmitter. 

UMA Unlicensed Mobile Access. A technology that provides roaming between GSM and 
802.11 Wi-Fi UMTS Universal Mobile Telecommunications System. The 3G mobile technology most commonly used in the UK and across Europe. 

Unbundled A local exchange that has been subject to local loop unbundling (LLU). 

Usage cap Monthly limit on the amount of data that users can download, imposed by fixed and mobile operators for some of their packages.  
VDSL Very High Speed DSL. A high speed variant of DSL technology, which provides a high headline speed through reducing the length of the access line copper by connecting to fibre at the cabinet. 

Vectoring A technique used in DSL networks to increase the data speeds by using real time digital signal processing techniques to reduce the interference on the line.  
VOD Video-on-demand. A service or technology that enables TV viewers to watch programmes or films whenever they choose to, not restricted by a linear schedule (also see 'push' VOD and 'pull' VOD.  
VoIP Voice over Internet Protocol. A technology that allows users to send calls using internet protocol, using either the public internet or private IP networks.  
Weightless  A low power, wide area network technology standard designed to work in many different spectrum bands. Wi-Fi A short range wireless access technology that allows devices to connect to a network through using any of the 802.11 standards. These technologies allow an over-the-air connection between a wireless client and a base station or between two wireless clients.  
WiMAX A wireless MAN (metropolitan area network) technology, based on the 802.16 
standard. It can be used for both fixed and mobile data applications.  
WLR Wholesale Line Rental. This is a regulatory instrument requiring the operator of local access lines to make services available to competing providers at a wholesale price.  
xDSL The generic term for the Digital Subscriber Line (DSL) family of technologies used to provide broadband services over a copper telephone line. 

 

## Annex 3 3 Mobile Coverage Scenarios

Mobile coverage estimates presented in this report are based on signal strength predictions provided by the MNOs using computer models. These models have been refined over time by comparing predictions with real world measurements. While we have found the models to be broadly accurate, predicting signal strength at a specific location is highly complex and can be affected by a number of factors. These include the complexity of local topography (such as hills and valleys) and the presence of building and other obstacles, such as trees. As such, prediction is subject to a margin of error. When estimating outdoor coverage we have applied a signal strength threshold which we consider is sufficient to provide a reliable signal in the large majority of locations, taking into account the potential error margins associated with the MNOs signal strength predictions. Mobile phone signals are weakened as they pass through solid objects such as the walls of buildings or the body of cars. Signal strengths are therefore generally weaker indoors and incar than they are outdoors.  We have reflected this in our analysis by applying a fixed signal loss of 10dB (this being the measure of mobile signal strength) to MNOs' outdoor signal strength predictions when estimating indoor and in-car coverage. The choice of appropriate signal threshold is a matter of judgment. We have undertaken sensitivity analysis to assess the impact on estimate coverage of applying different signal strength thresholds. The results are presented below. We currently use a signal strength threshold of -86 dBm for our 2G 
outdoor coverage figures, -76dBm for indoors and in-car.  
Our central case estimate of 3% of premises in partial not-spots and 0.3% of premises in complete not-spots is based on a signal strength threshold of -86 dBm.  
The percentage of premises in not-spots is higher if we assume a signal strength threshold of -76 dBm. We believe that this could be a reasonable representation of indoor premises coverage, as signals are weakened by building material and thick walls. At this level,1.7% of premises are in complete not-spots and 15.5% are in partial not-spots. The percentage of premises in not-spots is lower if we assume a signal strength threshold of 
-88 dBm or -92 dBm. These thresholds are considered by some MNOs to be more appropriate for the measurement of 2G mobile coverage. With these thresholds, the percentage of premises in complete not-spots is modelled to be as low as 0.1% and in partial hotspots, 1.1%. 

 
For roads coverage, our central case estimate is based on in-car coverage. For in-vehicle coverage, the 2G signal strength required could be as much as -76 dBm, similar to the case for buildings, as attenuation of signals through vehicles is higher than in an outdoor setting. In this situation, 33% of A and B road length could be in partial not-spots, with 9% in complete not-spots. 

For 3G networks we have applied a signal strength threshold of >= -100 dBm RSCP CPiCH 
for outdoor coverage and -90dBm for indoor and in-car. For 4G networks we have applied a signal strength threshold of >= -113 dBm RSRP for outdoor coverage and -103dBm for indoor and in-car. 

 
We estimated that the outdoor coverage of the UK land mass is 68%, with 11% of the UK's land area in complete not-spots and 21% in partial not-spots. When we use thresholds suggested by some MNOs, 15% of the UK's land area is in a partial not-spot and 7% is in a complete not-spot. 

## Annex 4 4 Research Reports

http://stakeholders.ofcom.org.uk/binaries/research/t echnology-research/2014/performance-eval.pdf 

In the process of compiling this report, Ofcom commissioned a number of external research reports to inform our analysis. The following reports are available on our website at the links below. 

Report on Internet Performance Evaluation, Actual Experience 

http://stakeholders.ofcom.org.uk/binaries/research/t echnology-research/2014/cable-sfbb.pdf 

'Future capability of cable networks for superfast broadband', Analysys Mason 
 

http://stakeholders.ofcom.org.uk/binaries/research/i nfrastructure/2014/new-tech.pdf 

'Roadmaps for the transition to new fixed and mobile voice technologies', Analysys Mason 

http://stakeholders.ofcom.org.uk/binaries/research/i nfrastructure/2014/broadcast-dev.pdf 

'New service developments in the broadcast sector and their implications for network infrastructure', Analysys Mason 

Study into UK IPv4 and IPv6 allocations, RTFM 
http://stakeholders.ofcom.org.uk/binaries/research/t echnology-research/2014/rtfm.pdf