UK consumers better connected as digital communications grow globally
----------------------------------

OFCOM's recently-published annual International Communications Market report analyses trends in the £873bn global television, radio and telecommunications sectors in 2006.

It compares the UK with eleven other countries: France, Germany, Italy, the Republic of Ireland, the Netherlands, Poland, Spain, Sweden, Japan, Canada and the United States. Excerpts from key findings are included below.

The report also contains an insight into four countries that are at different stages of development in their communications markets: Brazil, Russia, India and China.

Main findings

Digitally connected: UK ahead in many areas

Broadband take-up continues to increase in the UK with over half of all households connected at the end of 2006, putting the UK slightly ahead of the US for the first time.

UK adults spend more time on social networking sites than their European neighbours, with four in ten UK adults saying that they regularly visit the sites. The UK adults who visit the sites spend an average of 5.3 hours each month on them and return to them an average 23 times in the month.

In the UK and the US, women use the internet more often than men. In the US, 52 per cent of internet users are women and in the UK the internet is used equally by men and women except in the18-34 age group where women spend more time online than men (57 per cent compared with 43 per cent).

Advertisers in the UK spend more money per person on internet advertising than any other country, at £33. This is twice as much as France, Germany and Italy combined. At 14 per cent of total revenues, spend in the UK on online advertising overtook magazine advertising for the first time and was more than the total spend on outdoor, cinema, and radio advertising combined.

The price of services: UK among the cheapest

The report also compares the prices of communications services for five typical household types in the UK, France, Germany, Italy and the US.

In all countries, buying more than one service from the same operator or ‘bundling’ generally provides much better value for money than buying a separate single service.

In the UK, around 40 per cent of households already take a bundled service. A typical family household in the UK with two parents and two children, who use a basket of communications services that includes a landline, basic pay-TV and the internet, will pay £39.50 a month on a triple-play deal. This compares with £27.22 in France and £39.77 in Germany. The same family in the US will pay £69.54.

The UK is also at the low end of pricing among the five countries analysed. The UK had the lowest average prices for a basket of communications services for two of the five households considered, and the second-lowest for two others. Key trends

Convergence

Accessing the internet from a mobile phone is growing in popularity. In Japan, where over half of mobile phones use a 3G network, mobile users are three times more likely to send an email from their mobiles as they are a text message. However, Europeans send more text messages with 75 per cent of mobile phone users in the UK, France, Germany and Italy sending SMS messages regularly.

Mobile handsets are increasingly being used in other ways than for making calls. The report shows that over half of Europeans use their mobiles to take photos and, in the UK, a quarter of users record their own video clips and listen to music through their mobile. In the UK, 33 per cent of mobile users send picture messages on their mobile, 16 per cent use it to connect to the internet and 10 per cent use their mobile for email.

More people in France watch IPTV, than in the other countries surveyed. At the end of 2006 there were 1.5 million IPTV subscribers in France which helped to drive take-up of bundles of communications services in the country. This compares to 43,000 subscribers in the UK.

Radio

Listening to radio over the internet – which offers a choice of dedicated online stations and also established terrestrial radio stations – is growing, The research shows that a third of the total population of the seven main countries in the report have listened to radio online.

Telecoms

High-speed broadband is becoming increasingly popular in many of the countries surveyed although the level of availability varies significantly from country to country. Japan, is the clear leader among the countries analysed with around 30 per cent of broadband connections being delivered via fibre. In the UK, Virgin Media has announced that it is to upgrade the majority of its cable network to deliver speeds of 50 Mbit/s.

Broadband is the fastest growing communications sector accounting for 9 per cent of total telecoms revenue across the 12 countries in 2006. The total number of broadband connections increased by more than 600 per cent between 2001 and 2006. This growth has been driven mainly by DSL broadband which is now the largest broadband platform in all the countries analysed except the US and Canada.

Consumer research commissioned for the report shows that in most countries, apart from Japan, the majority of consumers are satisfied with the speed of their broadband connection. Consumers are most satisfied in the US, at 85 per cent. 68 per cent of UK broadband were satisfied with their broadband speed, while satisfaction was lowest in Japan, at 41per cent.

The report also asked consumers for the ‘advertised’ or ‘headline’ speed of their home connection and what they thought the actual speed of their connection was. The biggest gaps in perceived headline and actual speeds were in the UK and Japan where a quarter of respondents claimed to receive a service that was less than the advertised speed of 8Mbit/s or higher.