Critical year for NTL

By Matt Whipp

Posted on 3 Jun 2003 at 12:25

According to a report by Forrester Research, next year will prove critical if NTL is to capitalise on its current broadband success.

'Ntlworld has clawed its way from bankruptcy to being the ISP/portal with the highest number of
broadband subscribers in the UK, doubling its traffic share during the year,' said Forrester Analyst Hellen K. Omwando, author of the research. However, she warned that it will have to 'turn to its affiliated digital TV platform to cross-promote traffic and cross-sell non-access-related services and content,' as its user base becomes saturated.

Omwando said that 'this year is critical,' and that NTL will have to win 'the battle for eyeballs, wallets and content,' especially in the run up to a merger with Telewest that she deems inevitable.

The report predicts AOL will rely on access to make most of its money in the UK, with the launch of AOL 8, but Omwando said that she expects the ISP to also consider creating a 'bring-your-own-access' model whereby it could make the most of compelling content from Time Warner to hook into the audience of other ISPs. Again, she expects NTL to take advantage of this.

Of the ADSL ISPs, the reports suggests that BTOpenworld, as the most expensive method of getting ADSL, 'must pick a price-insensitive niche such as home businesses or up-market consumers that want to play it safe with the BT brand' if it is to apply some damage control to the cannibalisation by the cheaper wires-only option.

Tiscali may be able to offer tiered services more akin to NTL's style, it simply doesn't have the brand strength, says the report. 'Tiscali just doesn't have a good brand,' said Omwando. 'Everybody know that they went on a shopping spree buying second tier ISPs.' The problems of amalgamating the various user bases to one service is causing the ISP to lose more than 30 per cent of the new customers.

Forrester advises Tiscal to use this year to court the business of SMEs.

Lycos.co.uk, suggests the report, has 'run out of steam' and should either retreat or seek a buyer. It advises Freeserve to concentrate on the dial-up market, where it is far more dominant. Finally, the report predicts MSN will continue to rely on its technology to attract advertisers, which account for more than 80 per cent of its income, and that Yahoo! will line its pockets with the results of Inktomi's paid-for search technology.