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The Consumer Experience 2013

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

This is Ofcom’s eighth 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.

Consumer segmentation - overview of recent research designed to segment consumers in the communications market according to their attitudes towards, and engagement with, communications technology and services.

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 Ofcom’s 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.

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. There is also a supplement this year on Cost and Value.

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Take-up of smartphones has continued to increase rapidly over the past year, with over half of all adults now claiming to own one (56%). Take-up of tablet computers has more than doubled over the year, rising from 12% in 2012 to 29% in 2013.

Just over half of consumers now report accessing the internet on their mobile. Fifty-three per cent said they personally used their mobile phone to access the internet (up from 49% in 2012). 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 17% in 2011 to 12% in 2012 and 8% in 2013.

Superfast connections almost tripled over the past year. Between Q1 2012 and Q1 2013 take-up of non-corporate superfast broadband connections increased; from 6.5% of all broadband connections to 17.5%. Half of all internet users say their laptop is their most important device for connecting to the internet. Forty-six per cent of internet users chose their laptop as the most important device to connect to the internet, followed by the desktop PC (28%).

Eight in ten consumers are aware of VoIP services - although only three in ten use the service. Awareness of VoIP rose in 2013 to 83%, from 78% in 2012. Use of the service also continued to rise - with just over three in ten (31%) claiming to currently use VoIP; this is three times the level of take-up in 2008 (10%).

A quarter of adults (24%) claimed that their use of post had decreased in the past two years, with two thirds claiming to replace some post with email. The second most common method was text messaging, with just over a quarter of adults (27%) using this method instead of post.

Digital terrestrial television (DTT) has near-universal coverage of 98.5% of UK households, as the UK completed digital switchover in late 2012.

Digital radio services are available to over nine in ten (94.4%) households. Following the launch of new multiplexes around the UK, the proportion of UK households that are served by local commercial multiplexes has also increased; from 66.4% to 71.7%.

The number of communication providers remained fairly stable in 2013. There are at least 13 major suppliers of bundled residential communications services, 114 fixed line operators and 4 mobile network operators.

There are currently 519 television channels, 13 of which are public service channels and their HD and +1 variants, with the remaining 506 being commercial channels. Consumers have 553 analogue radio services in the UK, including local and UK-wide commercial stations, BBC local, UK-wide and community stations, and 212 stations available on DAB, of which 50 are digital-only brands.

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Fixed-line ownership has stabilised in the UK - ownership levels have remained at 84% for a fourth consecutive year.

The majority (79%) of households continue to own both a fixed line and a mobile phone, with a further 4% fixed-line only and 16% mobile-only. Mobile-only households also continue to be more prevalent in urban (17%) than in rural areas (9%). Take-up of the internet remains stable, with four in five (82%) households able to access the internet at home. Seventy-eight per cent of households use either fixed and/or mobile broadband, 4% have access only via their mobile phone and 1% use a dial-up internet connection.

Around half of all UK adults access multi-channel television at home through Freeview. Thirty-seven per cent of all adults only use Freeview to access multichannel television at home; this compares to 31% only using satellite and 14% only using cable.

Just under six in ten (58%) adults receive pay TV. Following the slight decline in take-up of pay TV for some age groups in 2012, take-up has remained stable for all age groups.

Two-thirds of consumers claim to have access to digital radio services.

Just under two-thirds (64%) of postal users claim to be reliant on the postal service, while over nine in ten consumers are satisfied with the ‘delivery to neighbour’ scheme for post. Of the 28% of postal users who had experienced the ‘delivery to neighbour’ scheme, more than nine in ten (94%) stated they were either satisfied, or very satisfied, with the scheme, with over three in four (77%) being very satisfied.

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The increase in bundled purchasing continues. The proportion of consumers who purchase service bundles has risen steadily over recent years, and by Q1 2013 60% of UK homes took more than one communications service from the same provider, up from 57% a year previously.

Average UK household spend on communications services fell in real terms in 2012. On average, UK households spent £113.61 per month on communications services in 2012, £1.55 (1.3%) less than in 2011 and £12.28 (9.8%) less than in 2007. This was equivalent to 5.4% of total household spend in 2012, slightly lower than in 2011 and unchanged from 2007.

The average revenue of residential broadband connections increased by 1.2% to £16.38 per connection in 2012, largely due to take up of superfast broadband. Increasing average revenue per residential fixed broadband connection is to a large extent a result of consumers switching to superfast broadband services, (i.e. those with an advertised speed of 30Mbit/s or more), which typically command a price premium over standard broadband services. In the year to May 2013 the proportion of UK residential fixed broadband connections that were superfast increased from 8% to 19% .

The premium price for superfast broadband services is falling. Our analysis shows that the lowest available prices for a basket of fixed voice services with a standard fixed broadband connection, and the price for the same fixed voice services with a superfast broadband connection, both continued to fall in the year to July 2013. The rate of decline in the price of the basket including superfast broadband (8.2%) was higher than that of the standard broadband basket (3.2%) in 2013, and the difference between the lowest price available for each of the baskets (i.e. the premium for superfast broadband services) was just over £8 per month, down from £10 per month in 2012 and £12 per month in 2010.

UK mobile prices fell for most of the usage profiles used in our analysis in 2013. Our analysis shows that the total ‘weighted average’ price of eight mobile connections with varying use of voice, SMS and data services fell by just under a quarter (22.6%) in real terms in the year to July 2013. The weighted average price of all but two of these connections fell during the year.

The lowest price available for a stand-alone basic pay-TV service increased by 7% to £12 per month in 2013, although this was lower than the lowest price of a similar service in 2008 (£16 per month). The lowest price available for stand-alone HD premium pay-TV services was £66 per month in 2013, up from £55 in 2008 and an 8% increase since 2012.

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A fifth (20%) of consumers switched at least one communications service in the past 12 months. Overall, yearly switching levels remain broadly unchanged at around one in ten in each of the fixed-line (9%), mobile (11%) and fixed broadband (9%) markets. The total level of switching main digital TV provider remains lower, at 3%, and 4% among those with a pay-TV service.

Cost and poor service are both common reasons why consumers say they switch communications provider. Cost was stated by between 54% and 62% of switchers in each of the fixed voice, fixed broadband, mobile and digital TV markets. ‘Poor service’ was mentioned as a reason for switching by around half as many in each market, ranging from 20% in the mobile market to 29% in the fixed broadband market.

In the mobile market ‘reception’ (15%) and ‘handsets’ (13%) are market-specific factors that drive consumers to switch provider with a minority switching ‘in order to obtain a 4G service’ (5%). The desire for ‘faster speeds’ is a key driver among fixed broadband switchers (15%), as is the ‘choice of channels’ for TV switchers (18%).

Satisfaction i is one of the most-mentioned reasons for not switching provider, among those who have only considered doing so. Around three in ten consumers who ‘looked but didn’t switch’ in each of the fixed voice, fixed broadband and mobile markets cited satisfaction as the reason they didn’t. These proportions have risen significantly since 2012.

A minority (around one in ten) of switchers, who spoke to their previous provider, said they were put under pressure to stay. Contact with losing providers is most common among fixed line and fixed broadband switchers, where around three-quarters (73% and 76% respectively) said they had been in contact with their previous provider.

The majority of switchers (between 84% and 92%) considered it very or fairly easy to switch provider. But for some switchers (between 6% and 14%) changing provider was ‘difficult’. The fixed broadband market continues to have the highest levels of stated difficulty in switching, at 13%.

The majority of consumers remain satisfied with their services overall, with dissatisfaction highest for fixed broadband, at one in ten. Dissatisfaction stands between 5% and 11% across markets. Levels of overall satisfaction remained fairly consistent between 2012 and 2013 across each of the communications markets, with little variation in dissatisfaction across demographic groups within each market.

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 (93%). Two-thirds of postal users are satisfied with the value for money provided by the postal service.

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Telecoms issues dominate complaints to Ofcom, with levels broadly in line with 2012. The level of telecoms complaints is similar to 2012, at between 6000 and 7000 per month, although some categories have fallen. This compares to about 1000 complaints about broadcasting standards and around 40 per month relating to postal services.

Complaints to Ofcom about abandoned and silent calls peaked in April 2013 and have declined since then. In October 2013 there were 2,857 complaints, this followed a peak of 3,900 in April 2013. Ofcom’s market research has found that experience of nuisance calls fell between February, when eight in ten (82%) people reported receiving a nuisance call on their landline in the previous four weeks, and July, when seven in ten (68%) people reported a nuisance call on their landline. It has remained broadly constant since then.

The issues causing unexpectedly high bills (UHBs) in the mobile contract market remain broadly unchanged from last year. Making calls to numbers not included in the call allowance, and lost/stolen mobiles remain the main cause of UHBs in the mobile contract market, each at 3% of mobile contract customers. Exceeding voice allowance (1%) and using data without an allowance (1%) are the next most common causes.

The average amount of bill shock in the mobile contract market shows signs of decline. In 2013 the mean average amount of bill shock in the mobile contact market was £40, compared with £46 in 2012. However, many UHBs in the mobile contract market were for less than this average, which is influenced by a small proportion of bills at the higher end of the scale (i.e. £100+ more than expected).

Complaints about fixed-line and mobile mis-selling have decreased over the past twelve months. From a peak of 1200 complaints in April 2005, the downward trend in fixed-line mis-selling complaints has continued over the past year, with overall fixed-line mis-selling complaints averaging 442 per month for 2013. Mobile mis-selling has also decreased over the past 12 months, from a peak of 270 complaints a month in October 2008 to around 190 a month in 2013. Furthermore, since their high of around 60 complaints per month in 2008 monthly cashback complaints have significantly reduced to single digits over the past two years.

Broadcasting complaints to Ofcom continue to focus on content standards. In October 2013 there were 1,642 broadcasting complaints, of which 1,581 were about television and 61 were about radio. These levels were broadly in line with those seen in 2012.

A minority (15%) of those eligible were referred to alternative dispute resolution (ADR) by their provider, with higher satisfaction with outcomes noted among those who used the ADR scheme. Overall, 29% of eligible complainants were satisfied with the final outcome of their complaint; this compared to just under half (47%) of those who used the ADR scheme.

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