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December 3, 2010

UK consumers early adopters of new technologies, says Ofcom

66% of UK households to have access to next-generation broadband by 2015

By CBR Staff Writer

UK consumers are some of the earliest adopters of new communications technologies, and are among the best connected for broadband, mobile and digital TV, according to new research by Ofcom.

The UK has also experienced fastest growth in smartphone take-up and its consumers are also enjoying lower prices for communications services than many consumers across the world.

Ofcom’s fifth International Communications Market report into the global communications market has considered the availability and use of broadband, landlines, mobiles, TV and radio in 17 countries, and concluded that UK households are among the best connected.

The research reveals that across the six countries it surveyed, expenditure on communications services remains resilient with people less likely to cut down on communications services, and in particular broadband (6-7%), than they are on other are as such as nights out (39-56%) or holidays (29-51%).

The market researcher said that the UK households have comparatively high levels of take-up of communications services, with among the highest take-up of landlines, fixed broadband connections, mobile connections and digital TV at the end of 2009.

Germany has the highest landline take-up with 85% of the population having a landline (84% in the UK), Italy has the highest mobile take-up with 95% of the population owning a mobile phone (91% in the UK), and the Netherlands has the highest fixed broadband take-up (85 connections per 100 households, compared to 70 in UK).

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However, the UK is behind other countries in take-up of VoIP services with only 5 subscribers for every 100 people, compared with 26 in France and 20 in the Netherlands.

Although the UK did see an average 27% annual increase in VoIP subscribers between 2006 and 2009, VoIP services tend to be more popular in countries where there is high demand for international calls or where broadband is available to consumers without the need for a landline services (also known as naked DSL).

The desktop PC is still the most popular device used to access the internet at home, followed by the laptop.

However, in the UK the laptops are the most popular device used to access the Internet at home, used by 69% of Internet users and it is the only country surveyed where more than half of 18-24s (60%) use a device other than a desktop PC to use the Internet.

Mobile Internet is also popular with people in the UK with 29% of Internet users saying they use their mobile to access the Internet at home, second only to those in Japan at 43%.

Fourteen per cent of UK and US consumers also use their games consoles to access the Internet, compared with 7% of Internet users in Germany.

The report revealed that the UK saw the highest growth in smartphone take-up in the past year with a 70% rise in subscriber numbers between January 2009 and January 2010, compared to 11% in Italy.

Italy has the highest take-up of smartphones overall among the comparator European countries with 26 subscribers for every 100 people, followed by Spain (21 subscribers) and the UK (18 subscribers).

Spain, closely followed by the UK, also has the highest proportion of subscribers paying over £35 or €50 per month for their smartphone services (seven and six subscribers for every 100 people, respectively).

High value subscribers are more likely to use premium handsets such as the iPhone and they are also more likely to have more bundled minutes and data, suggesting that subscribers plan to use their phones more often and for more functions.

The UK experienced significantly faster growth in high value subscribers than any other European country with 61% growth, compared to Spain with just 4% growth.

While downloading mobile apps varies little across comparator countries, use of mobile mapping and direction services has grown fastest in the UK (86% increase since 2009) with nine in every 100 people in the UK using these services, compared to 5 in every 100 people in France and Germany.

People in the UK are using their mobile phones for social networking more than in other countries, with 24% of UK consumers compared to 13% of people in Germany.

Younger people in the UK are more likely to visit social networking sites on their mobiles than in other countries, with 45% of 18-24s and 38% of 25-34s saying that they did this.

The number of social networkers is also higher in the UK than other comparator countries among 18-24s and 55-64s with 86% of 18-24s in the UK saying they use the Internet for social networking, compared to 77% in France and 48% in Japan.

Forty-five per cent of 55-64s in the UK say they use the Internet for social networking compared to 30% in Germany and 13% in Japan.

Overall, Italy has the highest percentage of adults who use the Internet for social networking at 63.4% closely followed by the UK and the US at 63.2%.

Mobile messaging also continues to grow across the globe with Australia having the highest average use at 254 text and picture messages per person per month.

The UK is second biggest text messaging nation in Europe after Ireland, with 140 messages per person per month (218 per person per month in Ireland).

Further, the research revealed that overall, prices for communications services in the UK compare favourably to those in the comparator countries France, Italy, Germany, Spain, and US.

The UK is cheaper for four out of the five baskets (landline phone, mobile phone, broadband) Ofcom compared, but once pay TV is also included, pricing in the UK is comparatively more expensive.

The research also showed that Internet users in the UK say they made more than double the number of online purchases in the past six months than Internet users in any other major European country except Poland (19 and 14 online purchases respectively) and the next country was Germany with nine purchases.

In addition, the total value of online purchases Internet users said they made in the past six months was highest in the UK with £1,031. This was nearly double the amount spent by Internet users in the next-placed country, Germany with £595.

Despite super-fast broadband being available in some parts of the comparator countries, fewer than one in 50 households in the UK, France, Italy, Germany and Spain had a superfast broadband connection at the end of 2009.

This compares to 34% of Japanese households, however, around the world there are large scale deployments of superfast networks and the UK compares well with its target of 66% of households to have access to next-generation broadband by 2015.

Mobile broadband speeds have also increased among the comparator countries with HSPA+ and LTE services technologies being deployed in most countries throughout 2009 and 2010, with maximum theoretical downloads speeds of 100MBit/s now available in Sweden.

However, consumers in UK and France can only achieve maximum theoretical download speeds of 7.2MBit/s via HSPA networks as they are yet to deploy these new technologies.

Telecoms revenues also declined in seven of the 17 comparator countries, up from three in 2008 and mobile revenues are not keeping pace with increases in take-up and use, with mobile connections increasing by 16.3% and call volumes increasing by 14.7%, but revenues increased by just 2.7%.

In broadband, the UK was unique as the only country where fixed broadband revenues fell in 2009, as a result of increased take-up of lower cost LLU-based broadband services as part of double and triple play bundles.

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