DSL to double by 2008

Broadband penetration will top 18 million in two years' time

The number of installed broadband lines in the UK will rise from just under 10 million now to nearly 18.5 million or 64 percent of home and business internet connections by the end of 2008, according to new research from Point Topic.

Rural areas are currently experiencing the fastest growth. But even with the current high penetration levels, the future forecast is for a declining growth rate, leading to a much tougher market for ISPs.

Another factor that will impact the market is BT reaching 1.5 million "unbundled" customers. The telco giant currently has 850,000 of these customers, but after 1.5 million have been unbundled or April 2007 - whichever comes first - Ofcom will allow BT Wholesale to set its own broadband pricing.

Comms strategist Steve Kennedy predicted that only larger players would survive after this.

But Current Analysis' Sandra O'Boyle pointed out, "Not everyone is going to want the triple- or quad-play packages the large ISPs are proposing - at least until the pricing becomes too attractive to resist."