Connected Research

Union policy research in the 21st century

UK communications market report

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Ofcom has today published its annual communications market report. August is a funny time to produce such a beast (it does run to 332 pages!), given that large parts of the chattering classes are away on holiday and those that are left, even in the quality press, are apparently not capable of reporting it without putting a bit of social spin on it: thus, we’re all now tweeting though the kids are already getting out (The Guardian); while we no longer sit down to watch tele together (The Times). Well, reporting dry facts never sold many newspapers (and, I strongly suspect, won’t sell online access subscriptions, either) – but there are a few issues here which do raise interesting matters of communications policy.

You can of course make your own mind up via Ofcom’s own reporting – in the meantime, here’s a fairly random selection of what occurred to me as I wandered through the Telecoms section of the report (oh – and bring a mirror with you; some of the labelling on the charts runs a little awry and, in one case (Figure 4.21) looks as though it’s written in Georgian):

– the value of the UK telecoms market has grown by 73% in the eleven years between 1998 and 2008 to a total of £31bn (the small increase over 2007 reflects the downturn, with telecoms revenues being a typical bellwether for the state of the economy). However, the fixed line voice market has declined by 19% to a figure of 9bn and it has been in decline since 2000, when it reached a peak of £12.3bn. Fixed line voice telecoms represented 62% of the communications market in 1998, but just 29% now. (Figure 4.2)

– the mobile voice market was larger than the fixed voice market for the first time in 2005, and has grown by over 200% since 1998, now to a value of £11.5bn. (Figure 4.2)

– in terms of all telecoms revenues, those sourced from fixed line service represent a slim majority but, on current trends, will be smaller than the mobile sector next year. (Figure 4.4)

– households equipped with mobile broadband now number over 3m (12%), with an increasing number on pre-pay contracts. (Figure 4.11)

– mobile broadband users are predominantly young people while, of the total number of broadband subscribers in the DE socio-economic group, the take-up of mobile broadband only is the same as the percentage of subscribers with both fixed and mobile connections. (Figure 4.12)

– the net number of pre-paid mobile subscribers fell for the first time in 2008 as post-paid contracts grew sharply to reach 39% of total subscriptions. The predominant reason for the growth in the post-paid market is SIM-only connections, although there is some evidence that the market here may have peaked. (Figures 4.20; 4.23; 4.43)

– in terms of number of subscribers, the largest telephone company in the UK is not BT but O2. BT had 20.6m subscribers in 2008 (18.7% of the total); O2 had 21.5m (19.5%). (Figure 4.29 and surrounding text)

– monthly fixed-line revenues fell by 20% between 2003 and 2008 to £22.78. Access charges rose by 1.4% in the period but call costs fell by 7.3%. (Figure 4.32)

– the number of exchange lines fell by 4.9% between 2003 and 2008 to a total of 33.2m (Figure 4.35), driven by the increase in the number of homes with mobile connections only, the proportion of which has doubled since 2003 (Figure 4.62). One-fifth of households in the DE socio-economic category are mobile only (Figure 4.63), while 26% of adults aged between 15-24 live in mobile only households – largely, these will be students (Figure 4.64).

– SMS messaging accounted for 18% of mobile operators’ revenues in 2008 (Figure 4.39), driven by the continued rise in the number of SMS messages sent, which is not far from having trebled since 2003 (Figure 4.73)

– including Tesco Mobile (O2) and Virgin Mobile (T-Mobile) subscribers, the number of subscribers of in each of the mobile operators was as follows: O2 – 21.5m (28%); Vodafone – 17.7m (23%); T-Mobile – 16.8 (21.9%); Orange – 16.4m (21.4%); 3UK – 4.5m (5.9%). (Figure 4.42)

– household monthly spending on all telecoms services declined by 4% between 2003 and 2008 to reach £65.01. The amount spent on internet and broadband, and mobile data and text, services increased, but the amount spent on fixed line telecoms dropped by 29%. (Figure 4.55)

– a higher percentage of households have a mobile connection (92%) than a fixed line one (87%) – the crossover point was 2006. (Figure 4.61)

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Written by Calvin

06/08/2009 at 2:33 pm

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