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The number of UK residential and small business broadband connections continued to grow during the fourth quarter of last year, as cheap broadband packages helped the sector to weather the economic downturn.

According to Ofcom’s latest Telecommunications Market Data Update, the total number of broadband connections grew to 17.3 million in the three-month period to December 31st. This represents a rise of 2.1 per cent from the third quarter of the year.

The industry’s strong fourth-quarter performance means that the number of broadband connections in the UK has grown by 11 per cent in the space of a year, with 1.7 million new connections added over the 12-month period.

Ofcom’s data also revealed that BT Retail’s share of the market slid slightly. The telecommunications regulator detected a 0.1 per cent fall to 26.3 per cent. Meanwhile, Virgin Media’s (VM) cable network now boasts 21.3 per cent of the market, whilst BT-based broadband providers saw their subscriber numbers slip from 3.7 million to 3.5 million.

News of developments comes as VM yesterday issued a statement to deny that it is planning to move into the wholesale broadband market. The cheap broadband provider acted after a report from the Guardian claimed that the company is planning to rent out its fibre optic broadband network to rival internet service providers. If VM was to go ahead with such a scheme it would have the potential to seismically change the trends detected by the study.

Meanwhile, Ofcom’s telecommunications industry reports continue to be regarded by many as giving an incomplete view of the broadband sector. This is principally because the regulator does not measure mobile broadband, which has been a massive growth area over the last year. If this area of broadband suppliers' business had been measured by Ofcom, it is likely to have suggested an even brighter outlook for the sector.

This is especially true given that the period measured included Christmas when mobile broadband dongles enjoyed strong sales. O2 in particular benefited from huge uptake and recently announced it has now sold over one million dongles.

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