Broadband subscriptions in the UK exceeded expectations in the last 6 months of 2008 reaching 17.4 million by the end of the year and topping Point Topic’s forecasts by 0.2%.

“DSL operators had a stronger fourth quarter than projected, in particular the local loop unbundlers. While cable did well it didn’t exceed our forecasts,” says Tim Johnson, Chief Analyst at Point Topic.

The success of O2 was the biggest new story of 2008 as far as the fixed broadband market was concerned. Starting the year with only 71,000 broadband lines, it added 270,000 more to increase its market share by 1.5%. Sky has a good 12 months too and built on its accomplishments in previous years to achieve even bigger gains, adding 727,000 lines to reach almost 2 million lines

These successes have contributed to DSL increasing its share, from 78.0% to 78.6% of the UK broadband market with almost all the balance being provided by cable and only an estimated 0.2% using other technologies such as fixed wireless and satellite.

However during the year there was only a 10.6% growth in broadband overall, a sharp decline from the 19.9% in 2007. Much of the slowdown came in the second half of the year when market saturation combined with the advancing recession to cut the number of adds from almost 1 million in the first half to only 675,000 in the second.