September 12, 2006, 13:25 BST
ntl:Telewest's March merger made it the UK's biggest broadband service provider, but it's likely to cede the top position back to BT Retail by the end of the year, according to a new study.
A report released by Point Topic on Tuesday, covering UK ISP market share through Q2 2006, found that the cable provider's ability to keep adding broadband subscribers has been hampered by geographic limitations. As a result, ntl:Telewest's broadband growth has slowed considerably, while BT has forged ahead with its DSL services.
At the end of March, ntl:Telewest was 5 percent ahead of BT Retail in broadband subscribers. By the end of June the gap had narrowed to 2.4 percent, according to Point Topic.
At this rate, BT will once again be number one by the end of the year, with 25 percent of all the UK's broadband subscribers — 3 million subscribers in total, Point Topic said.
"Once again, it illustrates the inherent difficulty of competing against the incumbent in this type of market," said Point Topic chief executive Tim Johnson, in a statement.
Those figures cover BT Retail, but the company also has a large wholesale operation, which got a boost on Monday with a deal under which Vodafone will launch itself into the broadband business as a BT reseller.
Point Topic found that the ntl group, encompassing the ntl, Telewest and Virgin ISPs, grew by only 3.1 percent in the second quarter, below the market average and a steep drop from its growth of 10.3 percent in the last quarter of 2005.
Meanwhile, BT has gone from 22.4 percent of the market in September 2005 to 24.3 percent in the second quarter of this year. That is BT's fourth successive quarter of growth, Point Topic said.
ntl:Telewest is ultimately limited by the reach of its network, and competing telcos have been unable to get BT to release its grip on its network via local loop unbundling, Point Topic said. Meanwhile, BT has been able to focus on straightforward marketing to bring in new customers.