UK residents pay 38 percent less for telecoms services than five years ago

UK residents are paying 38 percent less than they did five years ago for broadband, mobile phone and fixed lines, says Ofcom in its latest report (The Communications Market 2007). Local loop unbundling is a major driver of cheaper broadband services. UK residents are paying 38 percent less than they did five years ago for broadband, mobile phone and fixed lines, says Ofcom, the UK telecoms regulator, in its latest report (The Communications Market 2007). Local loop unbundling is a major driver of cheaper broadband services.

The report is hundreds of pages long so I will highlight a few key points relating to broadband, converging communications markets, and mobile services.

- households spent less on telecoms services even though they consumed more; like-for-like prices fell by 9% in 2006.

- more than half of UK households have broadband and the average advertised speed is 4.6 Mbps although actual speeds experienced by users are lower (depending on quality and length of line from the home to the exchange and number of simultaneous users);

- average broadband speed doubled in one year (1.6 Mbps in 2005 to 3.6 Mbps in 2006 and rising to 4.6 Mbps at end of June 2007), despite drop in broadband cost, reflecting competition in the market;

- 72% of UK households were connected to an unbundled exchange (as of March 2007, an increase from 45% in March 2006);

- local loop unbundling (LLU) allowed operators to locate their equipment in a BT exchange so they were no longer depending on BT’s wholesale products and could offer independent service bundles to end users. IPTV is slowly being introduced by LLU operators;

- UK has the largest number of wireless hotspots and hotzones in Europe;

- 78 percent of people who own digital video recorders use them to skip the ads;

- online advertising accounts for 25 percent of total press advertising;

- at the end of 2006, there are 70 million active mobile phone subscriptions and further growth is driven by multiple handset or SIM ownership (note: it’s like the Netherlands where the operators offer SIM only subscriptions);

- of the 70 million active UK mobile subscriptions, 45.3 million are on prepay, 24.4 million on contract; operators are trying to move the prepay customers to contracts 12 months or more to reduce churn and increase revenue per user. People on contracts generate four times more revenue than prepaid customers;

- only 5% of the mobile operators’ revenue in 2006 came from non-SMS data revenue (meaning, few are buying the operators’ data plans);

- there were only 7.8 million 3G connections (so 10% of the total number of mobile connections) in the UK, but they expect this number to increase as more handsets get Internet capability (i.e. being able to show HTML pages correctly rendered on a small screen), prices for 3G data plans drop and operators migrate their users to 3G networks;

- bundled communications services are more popular and majority of broadband customers take it as part of a bundle;

- here’s a good one: the alarm clock is the one device that the mobile phone’s alarm feature has replaced followed by the camera;

- each person consumes more than 7 hours of media and communications services cumulatively per day (!);

- women 25-34 spend over 20% more time online than men;

- people were not as satisfied with their Internet connections as they were with their fixed line and mobile services because the speeds of access were less than advertised, slow or no connection during busy periods, etc.

- growth in Wi-Fi use has been astronomical: 29% of households had Wi-Fi in April/May 2007 versus 5% two years ago;

- people spent most time on Ebay, followed by Bebo, the UK social networking site; Google is no. 1 in search, with 43% more unique users visiting Google.co.uk than the nearest rival, MSN.com;

- over 60% of 10-year olds own a mobile phone, rising to over 90% of 15-year olds;

- more than 75% of 11-year olds say they own a TV, game console and mobile phone.

I will be digging through the Ofcom report for more goodies. Stay tuned for another post.

Link: http://www.ofcom.org.uk/research/cm/cmr07/