New report by PMP Strategy, commissioned by MS3 sheds light on the challenges and opportunities in full fibre.
An independent report by PMP Strategy, commissioned by Hull-based wholesale fibre operator MS3 Networks, sheds light on the current state of broadband in the areas of Hull, Scunthorpe and Grimsby. Following MS3’s expansion its full fibre network across the three areas in 2022, the Fibre impact study dives deep into the current broadband landscape and what its entry into the market means for local consumers.
MS3 Networks was originally founded to create competition for KCOM, which has long had an effective monopoly of many aspects of telecommunications in Hull and its surrounding areas. Expansion of MS3’s full fibre network began in Hull and is now passing over 1,000 new homes and businesses each week in the city. The company has also expanded into neighbouring regions across North Lincolnshire and, in September 2022, MS3 commenced builds in Scunthorpe, Grimsby and Cleethorpes and has now passed around 65,000 homes in those towns.
Divided into individual studies for Hull, Scunthorpe and Grimsby, the Fibre impact study paints a detailed picture of broadband use and accessibility in areas that have long suffered from a lack of choice. Looking at Hull, the report finds that, with an existing fibre-to-the-premise (FTTP) network from KCOM, the city was once ahead of the rest of the country in its full fibre rollout.
However, with the rest of the UK benefitting from substantial fibre investment, Hull is increasingly lagging compared to cities of equivalent size that are now more likely to have a similar quality of broadband but with more choice and at a lower cost. Neither BT Openreach nor Virgin, the UK’s two main gigabit broadband infrastructure providers, serve Hull, meaning none of the major ISPs in the UK, including Sky, Talktalk and Vodafone provide consumer broadband in the area.
The report also shows that the problem is not just a lack of choice. New fibre players entering the market across the UK, often offering lower prices, rouses even more competition among ISPs. However, KCOM’s effective monopoly in Hull, which is recognised by Ofcom, means broadband prices remain high — the highest in the UK, as both Ofcom and MS3’s report notes. As a result, consumers in Hull are paying in the region of £200 extra per year for broadband, compared to households in the rest of the UK.
With MS3’s network bringing more choice, the situation is changing, and the cost savings aren’t to be ignored. The report found that between the direct cost benefits for those switching to an ISP on MS3’s network, and an indirect benefit for those staying with KCOM if it were to reduce its prices by five per cent, annual savings for Hull households would total £14.5 million.
Scunthorpe and Grimsby could also benefit from greater choice, the report finds. While both areas are served by the UK’s major broadband players, which make use of BT Openreach and Virgin’s network, these providers offer standardised national pricing that may not reflect the lower cost incurred to serve these urban areas. New entrants with a tight geographic focus are therefore in a position to offer more attractive prices that better reflect their true costs.
It’s not just the direct cost savings on broadband that MS3 is impacting, however. The report found that in Hull, the deployment of MS3’s network is estimated to add 370 jobs to the wider economy in addition to those involved in the network deployment itself and add £35 million to the city’s GDP.
“We’re offering solutions to several broadband challenges in these areas,” says Guy Miller, CEO of MS3 Networks. “First, there is the unique position of Hull and its long-suffering under a broadband monopoly. High prices, limited choice and no network diversity mean Hull has a very poor fixed broadband penetration rate of 69 per cent, compared to the national average of 87 per cent, depriving many of its citizens of the full benefits of the internet.
“While Grimsby and Scunthorpe have more choice in provider, the areas are still limited in options that suit everyone’s needs. For instance, we know that MS3 offers lower wholesale prices to ISPs and for higher speed products than many of the larger providers. Those lower wholesale costs for ISP partners translate to prices for consumers and businesses that have previously been unavailable to them,” continued Miller.
“Our mission is to provide greater choice of broadband supplier, meaning more local people can reap the benefits full fibre internet can have on their work, education and social lives. Our latest report clearly demonstrates broadband challenges still remain in Hull, Grimsby and Scunthorpe, but it also shows the opportunity MS3 has to change the narrative for people in the area.”
To receive a full copy of this report, please email adam.kelly@ms-3.co.uk. For more information about MS3 Networks and its upcoming build projects, visit here.