The Consumer Experience 2014

Ofcom’s annual reports into the consumer experience of the fixed and mobile, internet, digital broadcasting and postal markets

This is Ofcom’s ninth annual report on the consumer experience of telecoms, the internet, digital broadcasting and postal services.

It discusses the results of our research programme, which measured how well consumers have fared over the past year in their use of these services.

In summary the report covers the following areas:

Changing use of communications - overview of the key changes occurring across the communications markets and the postal sector.

Digital Day 2014 - an in-depth study of the findings from the Digital Day 2014 consumer research, focussing on the findings among those participants aged 65 and over.

Availability of services and providers - details the range of options and coverage of providers and services; e.g. 3G mobile and superfast broadband.

Take-up of services and devices - demographic analysis of what services and devices consumers have, and consumers’ use of postal services.

Consumer choice and value - with a focus on purchasing and pricing, this research covers how consumers are choosing to purchase the services they have, how these are changing (e.g. bundles, contracts), how UK prices have changed over time and how they compare internationally.

Consumer interest and activity - provides the latest update on consumer participation including switching levels, ease of switching across the communications markets, and satisfaction with current services and providers.

Consumer protection - highlights the latest consumer protection issues and where there may be a need for intervention

This report has been published alongside the Consumer Experience Policy Evaluation,which considers the key findings and trends emerging from the research and uses these to assess the impact of Ofcom’s policy work and activities.

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Household ownership of communications services remains broadly unchanged, but ownership of devices such as tablets and smartphones continues to rise.

Take-up of tablet computers has continued to increase over the past year, from 29% to 46%, while take-up of smartphones has also continued to rise, albeit at a slower rate than in previous years, from 56% to 63%. As a result smartphones are now the most dominant connected device in the household, alongside laptops.

Two-fifths (40%) of internet users say their laptop is their most important device for connecting to the internet, although it has lost ground to newer devices.

Some 15% of all internet users said a tablet was their most important device for connecting to the internet (up from 8% in 2013), rising to 35% among tablet owners.

Twenty-three per cent of internet users said a smartphone was their most important device for going online (up from 15% in 2013), rising to 33% among smartphone users.

More homes are getting superfast broadband, with over a quarter of all broadband connections now superfast.

Rising proportions are also accessing the internet on their mobile. Fifty-eight per cent of consumers said they used their mobile phone to access the internet (up from 53% in 2013). However, take-up of mobile broadband via a dongle (or built-in connectivity in a laptop, netbook or tablet) has fallen for the past two years, from 13% in 2012 to 6% in 2014.

Use of VoIP services continues to grow, and a third now use this method of communication, driven by use among younger people (16-34 year olds) and those in socioeconomic group AB.

Ninety-seven percent of premises are able to access a basic broadband service, with download speeds of more than 2Mbit/s; 85% can access a standard service, with speeds of 10Mbit/s or more; and 75% can access superfast speeds of 30Mbit/s or more, due to the roll-out of fibre, and cable upgrades.

Growing take-up of broadband connections with a headline speed of ‘up to’ 30Mbit/s or higher is driving increases in actual fixed broadband speeds. The average speed of UK residential fixed broadband connections continues to increase, and Ofcom research shows that the average actual download speed of these services increased from 14.7Mbit/s to 18.7Mbit/s in the year to May 2014.

Digital terrestrial coverage is almost universal following digital switchover, while DAB digital radio services are available to over nine in ten (94.7%) households.

The number of communication providers remained fairly stable in 2014. There are at least 12 major suppliers of bundled residential communications services, 113 fixed-line operators and four mobile network operators.

There are currently 527 television channels, 13 of which are public service channels and their HD and +1 variants, with the remaining 514 being commercial channels. Consumers have 560 analogue radio services in the UK, including local and UK-wide commercial stations, BBC local, UK-wide and community stations, and 245 stations available on DAB, of which 59 are digital-only brands.

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The majority (79%) of households continue to own both a fixed-line and a mobile phone, with a further 5% fixed-line only and 16% mobile-only.

Just over a quarter (28%) of 16-24s are in mobile-only households, with mobile-only households more prevalent in urban (17%) than rural areas (9%).

Take-up of the internet remains stable, with four in five (83%) households able to access the internet at home. Seventy-eight per cent of households use either fixed and/or mobile broadband, 5% have access only via their mobile phone and 1% use a dial-up internet connection.

Four in five UK adults access the internet, either at home or elsewhere, with increases since 2013 for 16-24s (95% to 98%), 65-74s (53% to 65%) and women (81% to 84%).

Ownership of any type of connected device is unchanged since 2013, at 82%. Within this overall figure, however, there are some significant changes: a decline in ownership of laptops (from 66% to 63%) and increases for smartphones (from 56% to 63%) and tablets (from 29% to 46%).

Smartphone ownership has increased (to 63%), but growth appears to be slowing. Growth since 2013 has been mainly driven by 45-64s (up from 44% to 58%).

Around half of all UK adults access multichannel television at home through Freeview, with 34% only using Freeview. This compares to 30% only using satellite and 14% only using cable.

Just over six in ten (61%) adults receive pay-TV, an increase since 2013 (from 58%). The increase for pay-TV is evident across all age and socio-economic groups.

While the majority of disabled consumers have access to a mobile phone in their household, personal use of this device is lower than average. Personal use of a mobile phone is lowest among those with a mobility (66%) or visual impairment (68%), and highest among those with a hearing impairment (73%). This compares to household ownership levels of 80%, 83%, and 86% respectively.

Just under two-thirds (64%) of postal users claim to be reliant on the postal service. Levels of those claiming to be ‘very reliant’ on the postal service increases with age, with 17% of 16-24 year olds stating they were ‘very reliant’ on the postal service, compared to 33% of those aged 65-74 and 35% of those over 75 years old.

Just over six in ten (63%) adults said the number of items they send by post had remained at the same level in the past two years. Twenty-one per cent of adults claimed that their use of post had decreased in the past two years and 16% claimed it had increased.

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Average UK household spend on communications services fell in real terms in 2013.

On average, UK households spent £117.24 per month, £2.09 (1.7%) less than in 2012. This was equivalent to 5.5% of total household spend, unchanged from 2012 and a 0.1 percentage point increase compared to 2008.

Eighty four percent of consumers with responsibility for paying for communications services reported that they had no difficulties paying for these services within the last year.

Three percent of consumers with a responsibility for paying for communications services reported being behind in payments or in debt within the last year. Those aged 16-34 were more likely than older age groups to have experienced communications debt in the last year.

Ofcom mystery shopping shows that communications providers’ sales agents asked at least one question to the shoppers to ascertain their needs to be able to offer an appropriate package. In three-in-ten mystery shops over the phone, five or more pieces of information were gathered by sales agents.

Mystery shopping found that mobile operators provided ‘appropriate’ advice when the shopper mentioned future financial uncertainty in over 9 in 10 shops. The sales agents asked questions to make sure that the package offered was suitable and gave a wide range of advice, e.g. including recommended SIM-only, mentioned low cost tariffs, using pay-as-you-go or short contracts.

The number of consumers with bundled services rose from 60% in 2013 to 63% in 2014. Many consumers have a fixed-line mainly, or only, for broadband. Our research found that 14% of consumers with a fixed-line said they never used it to make phone calls, and 42% of all fixed-line users said their main reason for having one was to get broadband.

Prices fell for six of the eight mobile usage profiles included in our analysis in 2014. Overall, the total 'weighted average' price of these eight mobile connections (which have varying use of voice calls, SMS and data services) fell by 3.9% in real terms in the year to July 2014.

There was a mixed picture in pay-TV pricing.

The lowest price available for a basic stand-alone pay-TV service increased by £1 per month (8%) to £17 per month in the year to July 2014. This was 14% lower than the lowest price of a similar service in 2011 (£20 per month). The 'lowest available' price for an HD premium pay-TV service fell by £3 per month (5%) to £63 per month in the year to July 2014.

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Switching levels have declined since 2013 in all communications markets except digital TV.

The largest decline is noted in the mobile market, down four percentage points since 2013 (11% in 2013 vs. 7% in 2014).

Reviewing finances, poor service and seeing better deals are the main triggers that prompted consumers to review their choice of provider.

In the fixed-line and digital TV markets the main trigger that prompted switchers to start looking for a new provider was a general review of finances (39% and 42% respectively).

Poor service from current provider was the main trigger for engaging in each of the mobile (35%) and fixed broadband markets (36%).

Most switchers considered it ‘easy to switch’; between 80% and 92% considered it very, or fairly, easy to switch provider.

But when prompted with a range of potential difficulties, half of switchers said they experienced at least some of these.

In the fixed broadband market the main difficulties were ‘provider persuasion to stay’ (21%) and ‘arranging start and stop times’ (16%). In the fixed-line market ‘provider persuasion to stay’ (28%) was also the top mention, followed by ‘obtaining information on switching from previous supplier (11%).

Over nine in ten (91% - 96%) consumers in each market are ‘very satisfied’ or ‘satisfied’ with their overall service. Dissatisfaction levels stand at between 7% and 11% across markets, highest in the fixed broadband market. Dissatisfaction with value for money is highest for stand-alone fixed broadband purchasers (13%) and lowest for stand-alone mobile purchasers (8%).

Three-quarters of broadband customers are satisfied with the speeds they are getting while online. Dissatisfaction was highest among the more engaged segments, and stood at 26% among ‘engaged’ fixed broadband customers and at 19% among those classified as ‘interested’.

Just under nine in ten (87%) adults are satisfied with the postal service overall. Those aged over 75 were the most likely to state they were satisfied with the postal service (91%). Two-thirds of postal users are satisfied with the value for money provided by the postal service.

The internet continues to dominate as the main source of trusted information. The ‘internet in general’ was by far the most often-cited source of accurate information for finding out about providers offering bundles (72%); broadband speeds, prices and providers (70%); ways of receiving multi-channel TV, packages and providers (63%); fixed-line providers, price plans and packages (58%); and mobile handsets, price plans, tariffs and providers (58%).

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Broadband customers are the most likely to say they have had a reason to complain (12%), followed by mobile (7%), and fixed-line (6%) customers.

One in ten (10%) adults reported that they had reason to complain about Royal Mail’s service in 2014. The most common cause of complaint was mis-delivered mail and in 2014 6% of adults said they actually complained.

Telecoms continues to dominate complaints received by Ofcom. The level of telecoms complaints between September 2013 and October 2014 generally fluctuated at between 6000 and 7000 per month, although some months were exceptions. This compares to about 1500 complaints about broadcasting standards and around 25 per month relating to postal services.

Complaints about fixed-line mis-selling have decreased significantly since a peak of around 1,200 in April 2005. From early 2011 complaints about fixed-line mis-selling remained below 600 a month, and have steadily declined since then to a low of 261 in December 2014.

Mobile mis-selling complaints have decreased over the past seven years, from a high of 756 in January 2008, to 204 in January 2009. There has been a continuation of this decline since 2009 and in the past 12 months they have fallen from a peak of 180 complaints a month in October 2013 to 101 in August 2014.

There are indications of a further decline in the incidence of unexpectedly high bills (UHBs) for mobile. Five per cent of mobile contract customers said they had experienced bill shock in 2014. This indicates a continued decline from 8% reported in 2013 and 10% reported in 2012.

The mean average amount of bill shock in the total mobile market was £36 (£37 for mobile contract), which is £10 less than reported in 2012. Almost a quarter (24%) of those who experienced mobile phone bill shock indicated that it was between £11 and £20 more than their usual bill.

Consumers who purchase their fixed-line as a single service are more likely than customers in other communications markets to receive only a paper bill. Forty-four per cent of consumers who purchase a stand-alone fixed-line service receive only a paper bill. This compares to the other communications markets, in which receipt of paper bills ranges between 18% (bundles of services) and 11% among mobile contract customers.

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