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The Market in Context

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The Market in Context The market in context UK CMR 2011 Figure 1.1 Communications industry revenue 1 year 5 year 60 54.3 54.8 53.4 53.4 growth CAGR 50.8 52.6 bn) 1.2 1.1 1.1 1.1 1.1 1.1 11.0 11.2 Total 10.5 10.6 11.1 11.8 0% 1.0% 40 nominal (£ Radio 2.3% -0.6% – 42.1 42.5 41.2 20 39.2 40.8 40.5 TV 6.2% 2.4% Revenue Telecoms -1.7% 0.7% 0 2005 2006 2007 2008 2009 2010 Source: Ofcom / operators Note: Includes licence fee allocation for radio and TV 1 Figure 1.2 Digital communications service availability, 2008 and 2009 UK UK Platform UK 2010 England Scotland Wales N Ireland 2009 change Fixed line 100% 100% 0pp 100% 100% 100% 100% 2G mobile1 96% - n/a 99% 85% 84% 87% 3G mobile2 95% - n/a 99% 84% 82% 54% Cable broadband3 48% 48% 0pp 51% 37% 23% 30% LLU4 89% 85% 4pp 91% 81% 84% 75% FTTC5 23% - - 23% 8% 14% 81% Digital satellite TV 98% 98% 0 - - - - Digital terrestrial TV6 85% 81% 4pp 85% 99% 98% 66% DAB BBC Network7 92% - - 94% 87% 78% 79% DAB commercial 85% - - 90% 75% 59% - Sources:network Ofcom (Digital and: One)8 Sources: Ofcom and operators: 1. Based on Q2 2011. Proportion of population living in postal districts where at least one operator reports at least 90% 2G area coverage. Source from GSM Association / Europa Technologies 2. Based on Q2 2011. Proportion of population living in postal districts where at least one operator reports at least 90% 3G area coverage. Source from GSM Association / Europa Technologies. Data are not comparable with previous report due to changes made by the mobile operators in the methodology used to calculate coverage 3. Proportion of homes passed by Virgin Media’s cable broadband network, June 2010; 4. Proportion of homes connected to an LLU-enabled BT local exchange, December 2010; 5. Proportion of homes connected to an FTTC-enabled BT local exchange, June 2011; 2 6 Calculations based on the estimated proportion of homes that can now receive at least 17 channels versus the coverage of the DTT signal prio Figure 1.3 See Figure 4.14 – same chart 3 Figure 1.4 Digital radio listening by age group, (monthly) Proportion of households 100% 80% 60% 96% 91% 40% 54% 46% 20% 39% 32% 32% 12% 27% 4% 2% 0% Source: Ofcom research, Q1 2011 Base: All who listen to the radio (n=2811) Q: Use digital radio at least monthly 4 Figure 1.5 Take-up of bundled services over time Proportion of households 60% 53% 50% 50% 46% 11% 10% Other 40% 39% 7% 2% 40% 2% 5% 6% 2% Fixed voice, dial-up and 1% multichannel TV 29% 29% 3% 3% 16% 30% 1% 17% Fixed voice and multichannel 3% 5% 4% 1% 20% TV 1% 4% 7% 12% 4% Fixed voice and dial-up 20% 5% 7% 5% Fixed voice, broadband and 22% 24% 10% 3% 19% multichannel TV 17% 16% 12% 9% Fixed voice and broadband 0% Q1 2005 Q1 2006 Q1 2007 Q1 2008 Q1 2009 Q1 2010 Q1 2011 QG1. Do you receive more than one of these services as part of an overall deal or package from the same supplier? Source: Ofcom technology tracker 5 5 Figure 1.6 Average time per day spent using communications services 250 242 219 200 185 173 150 2005 100 2010 50 28 15 15 12 7 13 Minutes perperson perday Minutes 0 Television Radio Internet - fixed Phone - fixed Phone - mobile Source: Ofcom / BARB / RAJAR / Nielsen Netratings (home use only) Note: Daily figures were calculated from monthly data on the assumption that there are 30.4 days in the average month; the exception was for internet consumption where the quoted figures relate to May 2004 and May 2009, and 31 days were used; the internet consumption figures include the use of online applications such as streaming media and only include use at home; mobile telephony figures are estimated assuming that the average time taken to send and receive a text message is 35 seconds. 6 Figure 1.7 Overall satisfaction with communication services 94 94 94 93 100 88 91 91 89 89 87 90 86 88 83 83 80 35 32 33 32 Satisfied 32 34 34 32 34 40 37 41 46 60 40 44 40 56 57 57 57 59 62 61 61 55 Very 50 50 46 42 42 Proportion of users(%) 20 39 satisfied 0 2011 Q1 2011 Q1 2011 Q1 2011 Q1 2011 2008 Q1 2009 Q1 2010 Q1 2008 Q1 2009 Q1 2010 Q1 2008 Q1 2009 Q1 2010 Q1 2008 Q1 2009 Q1 2010 Q1 Fixed Mobile Fixed Mobile telephony telephony Broadband Broadband Source: Ofcom research Note: Shows the proportion of users with each service, includes only those who expressed an opinion. 7 A2 – Which one of these would you miss doing the most? Base: All adults aged 16+ (3244 in 2005, 2905 in 2007, 1824 in 2009, 2117 in 2010), adults aged 16-24 (530 in 2005, 413 in 2007, 253 in 2009, 295 in 2010), adult Source: Ofcom research, fieldwork carried out by Saville Rossiter-Base in April to May 2009 and September to October 2010 Figure 1.8 Which media activity consumers would miss the most 100% 3% Watch videos/DVDs 6% 4% 5% 4% 5% 7% 6% 4% 3% 3% 4% 12% 4% 13% 5% 4% 4% 5% 8% 6% 4% 13% Listen to a portable 9% 10% 16% 8% 18% 3% 12% music device/MP3 player 80% 6% 17% 11% 4% Play console/computer 12% 13% 13% 32% 19% 7% 15% games 33% 28% 12% 6% 60% 15% 2% 10% 12% 4% Listen to music on a hi- 17% 8% 10% 6% fi/CD or tape player 8% 28% 18% Read newspapers/ magazines 40% 21% 26% Listen to the radio 11% 57% 52% 50% 48% 50% 49% 44% 44% 20% 36% Use a mobile phone 28% 22% 23% Use the internet via 0% computer/laptop 2005 All 2007 All 2009 All 2010 All 2005 2007 2009 2010 2005 2007 2009 2010 adults adults adults adults 16-24 16-24 16-24 16-24 55-64 55-64 55-64 55-64 Watch television A2 – Which one of these would you miss doing the most? Base: All adults aged 16+ (3244 in 2005, 2905 in 2007, 1824 in 2009, 2117 in 2010), adults aged 16-24 (530 in 2005, 413 in 2007, 253 in 2009, 295 in 2010), adults aged 55-64 (412 in 2005, 344 in 2007, 276 in 2009, 336 in 2010) Circles show statistically significant change between 2009 and 2010. Source: Ofcom research, fieldwork carried out by Saville Rossiter-Base in April to May 2009 and September to October 2010 8 Figure 1.9 Average household spend on communications services 150 6% Radio 4.78% 4.77% 4.74% 4.66% 4.63% 4.66% Television prices) £106.50 £104.22 £101.49 £98.41 2.69 2.70 £96.42 £93.61 100 2.72 2.57 4% 2.54 2.54 2010 28.24 27.75 Fixed internet 27.85 27.28 27.95 27.97 10.39 11.01 9.91 10.22 Mobile services 10.38 9.48 50 2% 37.20 36.63 36.26 spend total % of As 34.87 33.02 31.34 Fixed voice £ per month ( per £ month 27.97 26.13 24.76 23.48 22.52 22.27 As a %age of total 0 0% household spend 2005 2006 2007 2008 2009 2010 Source: Ofcom / operators 9 Figure 1.10 Average monthly household spend on communications services, 2010 prices 150 6% Radio 4.78% 4.73% 4.77% 4.74% 4.66% 4.63% 4.66% 4.48% prices) 4.31% £106.50 Television 4.12% £105.07 £104.22£101.49 3.82% £99.43 2.49 2.69 £98.41 £96.42 100 £95.80 2.70 2.72 £93.61 4% £90.89 2.89 2.57 2.54 2010 2.95 2.54 £83.01 2.77 27.72 28.24 27.75 Fixed internet 2.77 26.28 27.85 27.28 23.30 26.22 27.95 27.97 21.08 8.99 10.39 7.31 11.01 9.91 6.34 6.07 10.22 Mobile services 4.06 10.38 9.48 50 23.24 25.90 30.05 35.22 37.20 2% spend total % of As 19.63 36.63 36.26 £ per month ( per £ month 34.87 33.02 31.34 Fixed voice 35.47 35.24 34.67 32.91 30.65 27.97 26.13 24.76 23.48 22.52 22.27 As a %age of total 0 0% household spend 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Source: ONS Notes: Radio data prior to 2004 was compiled using a different methodology and is not directly comparable to subsequent figures TV includes PPV from 2004 onwards 2010 % of average household spend uses an estimate of household spend based on data for the previous four years 0 Industry revenues ended the decade at £53. 4bn Communications industry annual revenue, real terms Total ) 58.0 59.1 59.3 58.7 nn 56. 7 57. 0 60 54.3 54.1 1.3 1.3 1.3 55. 9 1.3 1.3 1.2 1.1 53.4 49.5 1.3 1.3 12.2 12.0 11.9 1.1 1.4 11.5 11.5 11.6 11.6 11.1 11.3 11.7 Radio 10.2 40 djusted (£b TV 43.9 45.2 45.6 46.1 45.5 44.2 43.1 20 38.0 42.0 41.5 40.5 enue –RPI a vv Telecoms Re 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Note: Includes licence fee allocation for radio and TV 0 Figure 1.12 Real terms broadcasting advertising spend 6 5.9 5.4 0.7 5.2 5.3 5.2 5.4 4.9 2010 10 year 0.6 4.9 5 0.6 0.6 0.6 0.7 4.6 4.5 growth CAGR 0.5 0.5 0.5 4.1 0.4 ) 4 0.4 bn Radio -0.7% -5.0% 3 spend 5.2 4.5 4.7 4.6 4.7 4.8 4.4 4.3 4.1 4.1 2 3.7 TV spend 10.7% -2.4% Revenues (£ 1 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Source: Ofcom calculations based on AA/Warc Expenditure Report.
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