Ofcom's third International Communications Market Report

Ofcom's third International Communications Market Report into the £876 billion (€1,049 billion) global  communications market looks at take-up, availability and use of broadband, landlines and mobiles, TV and radio in 12 established industrial economies and in four fast growing economies: Brazil, Russia, India and China.

Covering 2007, the report finds that UK consumers are getting a good deal for their money when buying communications services compared with people in other countries.

It also found that of the larger countries surveyed, the UK has more households with digital TV on their main set, at 86%, up 9% on the previous year as switchover gets underway.

This compares with the US where 70% of households have a digital TV, up 15% over the past 12 months. France was next at 66% of households with digital TV, and it had the highest growth during the period - an increase of 25%.

Consumers across the seven main countries surveyed are also making more sophisticated choices. High Definition (HD) services were relatively new in 2006, but now take-up of HD subscriptions has been huge, especially in the UK, US and Canada. Take-up doubled during 2007 to around 9 million subscribers across the seven larger countries surveyed.

Although the US has the highest number of households with HD subscriptions at 6 million (6.2%) the number of HD households in Canada is nearly 2 million, representing 17.6% of households. The UK leads Europe with 700,000 HD households (6%), higher than the combined number of HD households in France, Germany and Italy (500,000).

More households are choosing to pause, record, store and fast-forward TV programmes with a Digital Video Recorder (DVR). Ofcom's report shows that the UK leads the way with 30% of people saying they own a DVR. The recorders are also popular in Italy (21%), Canada and the US (20%) and least popular in Japan (7%). Across the seven largest countries, around 28 million pay-TV homes had a DVR in 2007, up from 14 million on the previous year.

According to price comparison research commissioned for the report, consumers in the UK continue to get a good deal when buying communications services. There are two reasons for this.

Firstly, competitive markets are driving prices down and, secondly, consumers are shopping around for good deals through bundling -taking multiple services from single communications providers.

The lowest prices for consumers, outside the US, are available when some services are bought in a bundle from the same provider. A typical basket of services which includes a landline, four mobile phones, basic pay-TV and broadband is available in the UK for £104 (€124) a month when they are purchased together within a triple-play deal, with Italy offering the next lowest price at £114 (€136.58), and then France at £131 (€156.95).

When these services are bought separately, the lowest prices a typical family will pay are in Italy (£116 a month), followed by the UK (£123). The same basket is £144 in France, £153 in Germany, £188 in the US and £248 in Spain.

Mobile growth was particularly high in emerging markets with 216 million new mobile subscriptions in Brazil, Russia, India and China.

 

In 2007, China alone had more than 88 million new connections - more than the total number of subscriptions in the UK (74 million). Take-up in Russia increased nearly 1,000% from 12 connections in a hundred people in 2002 to 123 connections in 2007 and exceeded the population in this country for the first time.

The number of calls made from mobile phones has also increased in 2007. People in the Republic of Ireland spent the most time on calls at 179 minutes per month. People in the Netherlands were next at 176 minutes per month, then people in Sweden at 144 minutes per month. Japan was the only country which bucked this trend, spending 2 minutes less time talking on their mobiles at 181 minutes, choosing instead to send an email from their mobile or an instant message. People in the UK, spent 136 minutes per month talking on mobiles in 2007, 23 minutes longer than in 2006.

Sending a text message remains a popular method of communication. People in the Republic of Ireland send the most texts at 154 messages each month. This is nearly double the UK figure at 81 texts per month.

People in Poland send more texts than their US counterparts -108 and 107 texts every month, respectively. These two countries saw the highest growth in text messaging. People in the US now send 140% more texts than they did five years ago and people in Poland sent 90% more during 2007.

Mobile broadband became much more popular with an estimated 60 million subscribers worldwide who were able to access the service via a dongle or a mobile phone by the end of October 2008. In the UK, monthly mobile dongle sales reached 163,000 in July 2008. The total number of dongles in use in Sweden increased from 92,000 to 376,000 during 2007. Mobile social networking has also started to take off - 800,000 mobile subscribers in the UK and 4 million in the US access social networking sites using their mobile devices.

The take-up of these new services is having an impact on traditional industry revenues as consumer behaviour changes.

With the growing popularity of pay television services, and the rising take-up of DVRs, advertising revenues no longer account for the main source of commercial TV funding. Advertising accounted for 49% (£81 billion) down from 50% on last year, while subscription revenues were at 43% (£71 billion) - up by 2% on the year.

Some 60 years since the first TV advertisement was aired in the US, subscription revenues overtook advertising revenues in the US for the first time in 2007 (£111 compared to £110 per person).

Advertising is increasingly shifting online. In the UK, online advertising accounted for £1 in every £5 of advertising (19%) - the highest among the countries surveyed and up by a third in 2006. Sweden followed at 17% (up from 13%) with the USA next on 13% (up from 10%).

People spent less time making fixed-line voice calls in 2007 than in 2006 in every country covered by the report as people increasingly used mobile phones. In the UK, people spent five minutes less per head making calls on a fixed line in 2007 than in the previous year, but 23 minutes longer making mobile calls.

 

Converged communications

  • People in all the countries surveyed are spending much more time online. The US leads the way at just over 15 hours per week in 2007 - up from 11 hours in 2004. The UK is second at nearly 14 hours per week, an increase of nearly 6.5 hours a week in 2004, the highest increase amongst the countries surveyed.
  • The US and UK are also leading the trend of watching TV online. People in the US watched nearly 26 TV programmes per person in 2007, more than three times higher than in the UK with nearly 8 TV downloads per person. This increase has been driven by popular free to view TV (including the iPlayer in the UK, and the recently launched Hulu service in the US).
  • Canadians remain in the vanguard of social networking with 55% of internet users visiting a social networking site. Half of UK internet users (50%) accessed a social networking site, an 11% increase since 2007.
  • Across all the countries surveyed, more women than men are using the internet. Some 56% of Italian women use the internet compared to 44% of Italian men. Japanese and Spanish women follow at 55%, with the UK and France having an equal gender split. Women in the US are bucking this trend, at 48% compared with 52% of men using the internet.

Telecoms

  • Increasingly people are relying on their mobile phone as their main device to make telephone calls. Italy has the highest number of mobile-only households at nearly 40%. Around a third of all households in Poland are mobile-only followed by a quarter of all Spanish households and a fifth of all homes in the Republic of Ireland.
  • Japan has the highest number of 3G phones with 83% of mobile users in the country having a 3G connection in 2007, up over 50% since 2004 when only 13% had 3G services. Italy is second with 27%, followed by the Republic of Ireland at 26%, with the UK at 17%. Canada has the lowest take-up of 3G mobiles at just 1% of connections.
  • Average broadband take-up was 56% of households in 2007, compared with 12% in 2002. The UK is above average, with 60% of households connected. The Netherlands leads the way with 81% of households followed by Canada at 66% of households. Sweden and the US were close behind at 62% and 61% respectively.
  • There are also signs that growth rates in the broadband sector are slowing. Among the countries covered by the report, only the USA and Germany saw a higher growth rate in 2007 than in 2006.

Broadcasting

  • The number of TV households grew by over 50 million in China between 2002 and 2007.

  •  Viewers in the US watch the most television of the countries surveyed, at 4.5 hours on average. Polish viewers watch more television than the other European countries at 4 hours a day and people in Sweden watch the least at 2.6 hours a day. UK viewers watch 3.6 hours a day on average.

     



  • Time spent listening to the radio is highest in Poland where listeners spend an average of 4.8 hours each day tuning in, with the Republic of Ireland following at 4.2 hours. People in Spain, at 1.8 hours, and Japan, at 2.2 hours per day, are least likely to listen to the radio. In the UK people tune into the radio for 3 hours a day on average.

  • Online radio listening in the UK is increasingly popular, with a third of people saying they listen via the internet at home. There was also a similar level of online listening in Germany (34%) and Italy (31%). France had the highest level of online radio listening at 37% whilst this was lowest in Japan, at 17%.

The full report can be found here: www.ofcom.org.uk/research/cm/icmr08/

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