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Monday, August 18, 2008

Highlights from Ofcom's 2008 report on the UK Communications Market

UK Regulator Ofcom does a sterling job of putting out useful research documents about the real state of the market for communications services, including quite a lot of original surveys and analysis, plus extra detail versus the normal widely-parrotted stats on subscriptions and the like. It also seems to phrase its questions in consumer surveys in a fashion intended not to give biased views - something which is conspicuously different from much of the PR-led "research" that I see.

Ofcom's just released a huge new report on the current state of the industry, incorporating telecoms, broadcasting and related services.

Some interesting insights I've spotted so far:

  • Quite a lot of discussion of the resilience of fixed-line comms in the face of the mobile onslaught. Rather than direct fixed-mobile substitution, it appears that the UK sees more mobile-initiated incremental use of voice. Fixed minutes have dropped about 17bn minutes in total over 6 years, but mobile call volumes have risen by 38bn minutes. The UK outbound call total is still around 60/40 fixed:mobile, and 88% of homes still have a fixed line.
  • The proportion of mobile-only households has been pretty static for the past few years, currently at 11%. This is considerably lower than elsewhere in Europe (eg 37% in Italy), and is possibly reflecting the prevalence of ADSL. Most mobile-only users are from lower socioeconomic groups.
  • 44% of UK adults use SMS daily, against 36% using the Internet
  • More than 100k+ new mobile broadband connections per month in the UK in H1 2008, with the rate of sign-up accelerating. 75% of dongle users are now using their mobile connection at home.
  • Nearly half of adults with home broadband use WiFi
  • 11% of UK mobile phone owners use the device to connect to the Internet, and 7% use it to send email. (It looks like the survey Ofcom commissioned didn't define "the Internet", so this might include some closed WAP usage too - consumers probably don't have a full view on what "the Internet" is at a technical level).
  • VoIP usage appears to have fallen from 20% of consumers in late 2006, to 14% in early 2008. However, I suspect that this masks the fact that many instances of VoIP (eg BT's broadband circuit-replacement service, or corporate IP-PBXs), don't make it obvious to the user.
  • Over two-thirds of mobile broadband users also have fixed-line broadband
  • UK mobile subscribers send an average 67 SMS per month (or 82 / month per head, taking account of multiple subs-per-person). MMS use is only 0.37 messages per user per month.
  • Slight increase in overall fixed-line subscriptions in 2007 - attributed to business lines.
  • Overall UK non-SMS mobile data revenues were flat in 2007 vs 2006 at £1bn. I reckon that's because the data pre-dates the big rise in mobile dongle sales, and also reflects price pressures on things like ringtones. Ofcom also attributes this to adoption of flatrate data plans vs. pay-per-MB.
  • UK prepay mobile ARPU has been flat at £9 / month for the last 4 years. That's a big issue for operators wanting to sell data services to prepay subs in my view.
  • 17% of mobile subscriptions in the UK were on 3G at end-2007, although there's not much detail on the actual usage of 3G for non-voice applications.
  • Overall, UK households allocate 3.3% of total spending to telecom services. That's been flat since 2003 - ie the slice of the pie isn't getting any bigger relative to food/rent/entertainment/travel etc.
  • 94% of new mobile subscriptions are bundled with handsets.
  • 11% of UK adults have >1 SIM card. Among 16-24yo users, this rises to 16%. There's an estimate that of the second devices in use in the UK, 1m are 3G dongles, 0.7m are BlackBerries or similar, and 8m are genuine "second handsets". There's also another 8m "barely active" devices that are used as backups, or legacy numbers that get occasional inbound calls or SMS

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