The Communications Market Report: International
UK communications deals cheaper than in other major countries
The communications sector’s total global revenues in 2012 were £1,228bn, growing by 2.5% year on year (incorporating the telecoms, television, postal and radio sectors).
Telecoms industries saw the largest absolute increase in revenues in 2012, which grew by £22bn to £865bn. Proportionally, television revenues grew fastest among the communications industries, by 4.1% in 2012 to £252bn.
The number of fixed line connections per 100 people continued to fall across all our comparator countries. The rate of decline was slowest in the UK where many customers continued to take a fixed line to receive fixed broadband services at home. The UK now has 53 fixed line connections per 100 people.
Mobile take up continued to exceed population size across all our comparator countries with the exception of China. However, in China the number of mobile connections per 100 people more than doubled in the last five years, up from 40 to 83.
Smartphone ownership is now commonplace among comparator countries. Excluding Japan, which has a very high take up of advanced featurephones not readily available in other countries, the US was the only country to report a smartphone take-up level of less than 50% in our online survey. The majority of respondents in all other countries reported that they now use a smartphone. Take-up in the UK was 66%.
Fifteen per cent of UK fixed broadband connections were superfast at the end of 2012. This was the fifth highest proportion among our comparator countries, after Japan (64%), the Netherlands (35%), Sweden (29%) and Australia (20%), and was the highest proportion among the EU5 countries.
People in the UK are the most frequent online shoppers. Almost three-quarters (73%) of the online population in the UK are buying goods for delivery over the internet on at least a monthly basis, and almost one quarter are shopping online at least weekly.
People in the UK are more likely to trust online retailers More than eight in ten of respondents in the UK (83%) agreed that they trust online retailers to ship them the correct item and four in five (80%) agreed they trusted online retailers to advertise products accurately.
In the UK 77% of online respondents reported that they received a bundle of services from the same supplier as their broadband. This was higher than in all of the other comparator countries.
Prices in the UK compared favourably to those in the other five countries covered by our price benchmarking work in 2013. The lowest ‘weighted average’ single-service prices for three of the five baskets used in our analysis, and the lowest ‘best-offer’ prices for two baskets, were found in the UK.
The UK was one of the two cheapest nations for all five of the households types used in our pricing analysis in terms of weighted average stand-alone prices, and for four of the households when looking at the lowest prices available. Overall, across all five households and both of these pricing metrics, the UK ranked top among the six countries included in the analysis.
Italy also performed well, having the lowest ‘best-offer’ (including multi-play) prices for two baskets and the lowest ‘weighted average’ price for one basket. Similarly, France had the lowest best-offer’ (including multi-play) prices for one basket and the lowest ‘weighted average’ price for one basket.
Low basket prices in the UK were largely due to lower mobile prices. The UK had four of the lowest ‘weighted average’ stand-alone prices and six of the lowest ‘best-offer’ prices for the eight mobile connections used in our analysis.
Global TV revenues increased in 2012, by 4.1% year on year, to £252bn, driven by an increase in both subscription and net advertising revenues (up 4.4% and 4.6% respectively).
The UK leads the way in digital conversion and is one of only three countries to have 100% of all main TV sets receiving digital TV (DTV) in 2012. In the UK, Spain and Italy, 100% of all main TV sets received DTV in 2012.
Almost half (48%) of UK TV homes now have a HD service, 15pp above the average for all European ICMR countries (33%). The UK also has the highest ownership of digital video recorders (41% of households) among all countries included in the research.
UK consumers are the most likely to access TV content over the internet, with over a third (36%) of internet users claiming to do this every week.
Consumers in the UK are most likely to watch catch-up TV on their smart TVs, mobile phones and tablets. Over three-quarters (77%) of UK smart TV owners access catch-up TV on that device, while a third (34%) of tablet owners and one in ten (12%) smartphone owners use their devices to watch catch-up TV.
Despite the increase in online TV, scheduled linear television remains popular, with viewing either up or unchanged in the majority of comparator countries. At four hours per day, the UK has one of the highest levels of scheduled linear TVviewing among comparator countries, 19 minutes more than the average for all 17 ICMR countries.
Radio revenues among the 17 comparator countries analysed in this report grew for the third consecutive year in 2012, increasing by 2.5% to reach £23.5bn.
In the UK the value of the radio market grew by 2.8% to £1.2bn, due to growth in local advertising and sponsorship as well as an increase in licence fee revenues.
Revenue growth is driven by increases in advertising and subscription revenues. The largest absolute increase in revenue was in the US, where advertising and subscription revenues contributed to a combined growth of £420m.
Among countries with licence fees, revenue growth is highest in the UK. Of all of the comparator countries with licence fees, only the UK experienced growth in revenues, and it is also the only country where both advertising and licence fee revenues increased.
DAB take-up among radio listeners is highest in the UK. Almost half (48%) of regular radio listeners claimed ownership of a DAB digital radio set. Among our European comparator countries, Spain and Italy had the next highest take-up, with almost a fifth of radio listeners in each country claiming ownership.
One fifth (21%) of those with a mobile phone in the UK use it to listen to the radio, but listening to ‘music I own’ is more popular. Of all the countries that we surveyed, only mobile phone owners in Italy, Spain and China are more likely to use their mobile phone for this purpose.
More than a third of all advertising spend in the UK is online, with 36% of advertising being attributed to the sector in 2012.
The UK had the greatest spend per head on mobile internet advertising in 2012, rising by almost £5 to £8.04 per person. This is the first year on record that Japan did not have the greatest spend: it had the second highest at £7.50 per person. The surge in mobile internet advertising has been driven by an increase in smartphone take up along with the growth of in-search, in-app and Facebook advertising.
Three in four (75%) mobile users in Spain used their handset to access the internet in August 2013, the highest take-up of the mobile internet among the comparator countries analysed. The UK had the second highest take-up, with just over 71% of mobile users using the internet on their device.
Smartphone take-up was the highest in the UK and Spain. Seventy-five per cent of mobile users owned a smartphone in Spain in August 2013. The UK had the second highest take-up, with seven in ten mobile users (71%) owning a smartphone, followed by the US (61%), and France, Germany and Italy (60%).
Social networks remain among the most searched-for terms online. ‘Facebook’ was the most searched-for term on the web for 14 of our 17 comparator countries.
Mobile internet users in the US and the UK are the most active social networkers. Two in five mobile internet users in the US (41%) and the UK (40%) used their handset to visit a social networking site almost every day in August 2013.
Users in the UK and the US are the most likely to pay a subscription for TV, film, and music streaming services. Of all respondents who accessed films weekly, more than half (57%) in the US and 45% in the UK paid a subscription fee for the service.
Total revenues increased by £2bn to £607bn in 2012. Fixed voice revenues fell by 8.9% during the year, due to falling call volumes (down 15%) and line numbers (down 3.2%). Mobile voice revenues increased by 3.1% (as did mobile data revenues), by 10.4%, while fixed broadband revenues increased by 5.2%, as the number of connections grew by 8% during the year.
Fifteen per cent of UK fixed broadband connections were superfast at the end of 2012 - this represents the highest proportion among the EU5 countries and fourth highest among Ofcom’s comparator countries, after the Netherlands (35%), Sweden (29%) and Australia (20%).
France was the only comparator country where fixed call volumes increased in 2012. Total fixed-line voice call volumes fell by an average annual rate of 5.5% to 1.5 trillion call minutes between 2007 and 2012. Fixed call volumes increased in France by an average annual rate of 1.3%. In the UK, volumes fell at an average annual rate of 7.3% in the same period, mainly due to fixed to mobile substitution.
The UK had the lowest proportion of total revenues that were generated by data services in 2012 at 31%. Japan had the highest proportion with 55%.
Take-up of dedicated mobile broadband connections fell for the first time in the UK, Spain and Ireland in 2012. The main driver of falling mobile broadband use with a dongle/datacard/data-only SIM is likely to be consumers accessing data services on smartphones, meaning that the drop in mobile broadband use with a dongle/datacard will be more than offset by rising use of data services on mobile handsets.
In the UK, 89% of superfast broadband users were happy with their overall service in September 2013. This was the highest proportion among our comparator countries. In all of our comparator countries, superfast broadband users were more satisfied than non-superfast users with their overall service.
The UK is still one of the cheapest countries in which to send a standard sized domestic letter. It costs 60p to send a First Class standard sized letter in the UK, the same price as in China. Among our European comparators, it is only cheaper to send a letter with the same dimensions in Ireland (49p) and Poland (46p).
A higher proportion of online UK adults send invitations, greetings cards or postcards in comparison to the other countries that we surveyed. More than a third (35%) of respondents in the UK had sent this type of mail in the past month. Those in Germany were least likely to have sent electronic greetings cards, with around a fifth (18%) doing so.
People in the UK receive more items of mail in a week than those in Italy, Australia and Spain. The average number of items received by people in the UK was 6.8, on a par with Germany (6.4) but far less than those in France where the average number of items received was highest (12.5).
The UK is among the countries with the highest proportion of consumers who had received a parcel in the past month. Six in ten (61%) of people claimed to receive parcels, on a par with France and Germany. Those in Italy and Spain were least likely to have received a parcel in the past month.
People in France and the US were the most likely to send mail to businesses, such as formal letters or payment for bills. More than eight in ten (84%) respondents in France had sent this type of mail, while seven in ten (69%) in the US had done so. Just under half of respondents in the UK had sent mail to businesses in the past month.