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Communications Market Report 2012

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Communications Market Report 2012 Communications Market Report 2012 Research Document Publication date: 18 July 2012 Contents Introduction 3 Key Points 4 1 The market in context 17 2 TV and audio-visual 113 3 Radio and audio 181 4 Internet and web-based content 219 5 Telecoms and Networks 279 6 Post 359 7 Glossary & Table of Figures 389 1 Introduction This is Ofcom’s ninth annual Communications Market Report. The report contains statistics and analysis of the UK communications sector and is a reference for industry, stakeholders, and consumers. The report also provides context to the work that Ofcom undertakes in furthering the interests of consumers and citizens in the markets we regulate. The report contains data and analysis on broadcast television and radio, fixed and mobile telephony, and internet take-up and consumption. Ofcom gained the responsibility and powers to regulate postal services in the Postal Services Act 2011, and for the first time this report contains information on the postal market. As Digital Switchover nears completion in October 2012, 98% of UK households now have digital television. Total internet access has edged up to eight in ten homes, in part aided by the continued rise of smartphone ownership (39%). Furthermore, each UK household on average owns three different internet-enabled devices. With the growth in smartphone users, there has been an increase in the consumption of mobile data. Consumers’ use of mobile data more than doubled in the 18 months to January 2012, while the number of SMS and MMS messages grew to an average of 200 messages per person per month. By contrast, the volume of voice calls on fixed lines continued to shrink, and, for the first time, the total call minutes made from mobile phones also fell. These are just some of the findings contained within this year’s report. The first section of the report examines ‘the rise of text-based communications’ (page 33) and the differences in take-up and use between older and younger people of various communications services in ‘the generation gap’ (page 49). The report goes on to detail the attitudes and behaviours of consumers to tablet computers and e-readers (page 61) before considering the media intentions of consumers in the forthcoming London 2012 Olympic and Paralympic Games (page 75). This section concludes by comparing the nations’ communications markets with the UK average and offering insight into the developing hyperlocal media sector. The remainder of the report covers television and audio-visual content (page 113), radio and audio content (page 181), internet and web-based content (page 219), telecoms and networks (page 279), and post (page 359). In each we set out in detail an analysis of industry and consumer data. Finally, to make this report and its resources more useful to stakeholders, we are publishing all of the data and charts in a searchable resource. This can be found at www.ofcom.org.uk/cmruk. Companion reports for each of the UK’s nations are once again published alongside this report; these can be found at www.ofcom.org.uk/cmr12. We publish this report to support Ofcom’s regulatory goal to research markets constantly and to remain at the forefront of technological understanding; it also fulfils the requirements on Ofcom under Section 358 of the Communications Act 2003 to publish an annual factual and statistical report. It also addresses the requirement to undertake and make public our consumer research (as set out in Sections 14 and 15 of the same Act). The information set out in this report does not represent any proposal or conclusion by Ofcom in respect of the current or future definition of markets. Nor does it represent any proposal or conclusion about the assessment of significant market power for the purpose of the Communications Act 2003, the Competition Act 1998 or any other relevant legislation. 3 Key Points Key points: the market in context Key market trends (page 23) • UK communications industry revenue decreased in nominal terms by 0.3% in 2011 to £53.2bn1. While total operator reported telecoms revenues fell by 1.9% in 2011 to £39.7bn, TV revenues increased by 4.9% to £12.3bn, and radio revenues grew by 3.5% to £1.2bn. • Availability of superfast broadband services increased during 2011. BT and Virgin Media’s superfast broadband services are available to an estimated 60% of UK homes (March 2012), which represents a seven percentage point increase on the previous year. • As digital switchover nears completion in 2012, digital terrestrial television availability rose to 97%2, a rise of 12 percentage points year on year. • Broadband take-up continues to increase steadily and in Q1 2012 stood at 76% of UK households, up two percentage points compared to the same period last year. This figure comprises those households with fixed and/or mobile broadband3 home access. While fixed broadband take-up rose to 72% in Q1 2012, mobile broadband decreased to 13%. • Take-up of connected devices has increased. Smartphone ownership rose to 39% of UK adults in Q1 2012, up 12 percentage points on 2011. Tablet ownership rose to 11% of UK households, up 9pp year on year, whereas smart TV4 ownership stands at 5% of TV homes. Internet access via a mobile phone only remains low; just 3% of smartphone owners rely solely on their phone for internet access, with no change in this figure year on year. • Total home internet access continued to edge up to reach 80% of UK households in Q1 2012. Home internet access is defined as a net figure for fixed broadband/mobile broadband/narrowband and smartphone access. • Fixed voice and broadband is the most popular communications bundle. Twenty seven per cent of households now take this type of bundle, whereas 19% of UK homes have a triple-play bundle of fixed voice, broadband and multichannel TV (up 3 pp on 2011). Overall, take-up of bundled communication services continues to grow, with 57% of UK homes taking a bundle in Q1 2012, against 53% in 2011. The rise in text-based communications (page 33) The means by which UK consumers can communicate has transformed over the past five years, as new digital devices and services such as smartphones and social networking grow in popularity. Ofcom’s new research explores UK adults’ personal communications preferences and use. 1 Based on industry revenue measured by Ofcom. This figure excludes the postal market. Mail market revenues stood at £6.7bn in 2011. 2 Calculations based on the estimated proportion of homes that can receive17 services. 3 Mobile broadband is defined as access via from a mobile network - connecting via a USB stick or dongle, or built-in connectivity in a laptop or netbook or tablet computer. 4 Smart TVs are defined here as those with inbuilt internet functionality. 4 • UK adults of all ages say that they prefer to communicate face-to-face with their friends and family. Eighty-three per cent of adults prefer to speak in person to friends and family. This applies to younger and older people alike, with 75% of 16- 24s saying this is the case, compared to 85% of those aged 65+. • However, two-thirds (64%) of adults say that technology has changed the way they communicate, while just under six in ten (57%) say that new communications methods have made their lives easier. Those aged under 35 are the most likely to agree with this statement – 72% of 16-24s and 73% of 25-34 year olds. Older people are less likely to agree – only 30% of over-65s agreed that new communications methods have made life easier. • Looking at the overall ways in which people communicate with friends and family on a daily basis, 68% use any text-based methods and 63% use any voice-based services5, whereas around half (49%) catch up face-to-face. • Overall, 96% of 16-24 year olds say that they use any text-based services to communicate with friends and family on a daily basis, compared to 21% of those aged over 65. Any voice-based services are used in this context by 74% of 16-24 year olds and almost half (49%) of over-65s. Whereas 63% of 16-24s catch up face to face on a daily basis compared to 37% of those aged 65+. • Text messages are the most-used method for daily communication with family and friends. Fifty eight per cent of UK adults text friends and family at least once a day. This is followed by just under half (49%) communicating face-to-face and a similar proportion talking on a mobile (47%) every day. Social networking is used daily to communicate by about one third (32%) of adults. • For younger people, text-based services dominate communication with friends and family on a daily basis. Around nine in ten 16-24 year olds send texts, and three-quarters (73%) use social networks. Face-to-face communication is less popular (63%) as are mobile phone calls (67%) and landline calls (15%). • This contrasts with people aged 65+, for whom landline calls are the most popular form of personal communication (42%), followed by 37% who catch up face-to-face, and 17% call on a mobile on a daily basis. Fifteen per cent of over-65s use text messages daily while just 4% use social networking. • Overall, post is the preferred way of sending a greeting, such as for a birthday, with 58% of UK adults doing this. However, for 16-24 year olds it is less popular (31%) than text-based digital communications such as text messages (53%) and social networking (41%).
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