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Ofcom analyst briefing The Communications Market Report 2014
7 August 2014
1
Agenda
Market Overview Jane Rumble, Head of Media Research and Market Intelligence
The telecoms industries Nick Collins, Senior Telecoms Analyst
The audio-visual industries Jonathan Fenn, Senior Media Analyst
Internet and web-based content Andrew Jackson, Senior Convergence Analyst
Post Steven Cape, Senior Analyst, Market Intelligence
2
Market overview
Jane Rumble, Head of Media Research and Market Intelligence
3
TV reported the largest rise in revenues
Source: Ofcom/ operators Note: Includes licence fee allocation for radio and TV, Figures are in nominal terms
£billion
Communications industry revenue: telecoms, TV, radio, post
Page 21 Figure 1.1
41.6 41.1 40.5 39.4 39.3 38.6
11.2 11.1 11.8 12.4 12.5 12.9 1.1 1.1 1.1 1.2 1.2 1.2 7.0 6.8 6.7 6.9 7.3 7.5
60.9 60.1 60.1 59.8 60.2 60.2
0
20
40
60
80
2008 2009 2010 2011 2012 2013
Total
Post
Radio
TV
Telecoms
Annual change
5 year CAGR
0.2% -0.2%
2.9% 1.6%
-2.1% 0.9%
3.4% 2.8%
-1.7% -1.5%
4
Falling household spend on communications
Source: Ofcom / operators/ ONS Notes: Adjusted for CPI; includes VAT.
27.59 25.67 25.49 23.80 22.85 22.32
52.32 49.95 49.32 48.70 48.23 45.65
11.77 11.59 11.28 11.79 12.49 13.19
29.68 29.75 30.68 31.01 30.59 30.61
126.73 122.19 121.48 120.40 119.20 117.08
5.3% 5.4% 5.4% 5.4% 5.5% 5.5%
0%
1%
2%
3%
4%
5%
6%
0
50
100
150
2008 2009 2010 2011 2012 2013
Post
Radio
Television
Fixed internet
Mobile services
Fixed voice
% of total spend
£ per month (2013 prices)
Page 32 Figure 1.12
Take-up of connected devices grows
5
39%
14% 11% 5%
51%
22% 24%
7%
61%
24%
44%
11%
0%
20%
40%
60%
80%Q1 2012 Q1 2013 Q1 2014
Source: Ofcom research Page 24 Figure 1.3
6
Source: Ofcom research, data as at Q1 of each year
Proportion of households/ adults (%)
90 90 93 93 92 92 93 94 94 95
91 90 90 88 87 85 85 84
84 84
60 60 64 67 70 73 76 79 80 82
31
41
52 58
68 71 74 76 75 77
65 65 67
72 72 73
20 21
32 39
49
57
12 15 17 13
5 8 0
20
40
60
80
100
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Mobile telephony
Fixed telephony
Internet connection
Total broadband
Fixed broadband
Internet on mobile(personal)Mobile broadbanddongle or datacard
Nearly six in ten consumers now report accessing the internet on their mobile
Page 25 Figure 1.4
7
Proportion of media and communications time, by age
Source: Ofcom
37%
24%
31%
34%
39%
45%
49%
2%
5%
3%
2%
1%
1%
1%
1%
3%
1%
1%
10%
2%
8%
12%
13%
13%
15%
2%
1%
3%
2%
3%
2%
1%
5%
9%
5%
5%
3%
3%
2%
2%
1%
1%
1%
2%
3%
6%
5%
5%
6%
6%
5%
4%
4%
16%
23%
20%
18%
14%
10%
7%
5%
9%
7%
4%
3%
3%
2%
11%
11%
12%
10%
10%
10%
10%
5%
7%
5%
5%
6%
5%
3%
All adults16+
16-24
25-34
35-44
45-54
55-64
65+
TV or films on a TV set TV or films on another device Short video clips Radio on radio setRadio on another device Other audio Print media Voice commsText comms Games Other internet media Other non-internet media
Average time spent hours:mins
9:16
10:15
11:20
10:54
11:46
14:07
11:07
Page 60 Figure 1.40
Young people spend as much time on text comms as watching TV or films
8
The audio-visual industries
Jonathan Fenn, Senior Media Analyst, Market Intelligence
9
Overall TV revenues were up by 3.4%
Source: Ofcom/broadcasters. Note: Figures expressed in nominal terms.
Total TV industry revenue, by source
4,384 4,655
5,027 5,428 5,512
5,879
3,488 3,143
3,496 3,630 3,551 3,697
2,554 2,555 2,563 2,585 2,671 2,600
793 736 715 723 750 736 0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
2008 2009 2010 2011 2012 2013
Subscriptionrevenue
Netadvertisingrevenue
BBC incomeallocated toTV
Otherrevenue
£11,088 £11,220
6.7%
4.1%
6.0%
1.2%
-1.9% -1.5%
£m 1 year 5yr CAGR
Growth to 2013
£11,801 £12,366 3.4% 2.8%
-2.7% 0.4%
£12,485 Total £12,911
Page 161 Figure 2.36
£2,204m £1,896m £2,144m £2,159m £2,054m £2,059m
£449m £445m
£518m £563m £563m £669m
£835m
£802m
£834m £908m £910m £968m
£3,471m
£3,136m
£3,486m £3,619m £3,551m
£3,697m
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
2008 2009 2010 2011 2012 2013
Commercialmultichannels
Commercial PSBportfoliochannels
Main commercialPSB channels
TV advertising revenues up 4%
10
TV net advertising revenues, by source: 2008 - 2013
£m
0%
1 year 5yr CAGR
Growth
-1%
4% 1%
6% 3%
14% 8%
Source: Ofcom/broadcasters. Note: Figures expressed in nominal terms. Page 163 Figure 2.38
11
Online TV revenues: 2007 - 2013
£m
17.1 39.6 41.0 44.3 61.8 15.0 18.8 22.3 24.5
63.5
111.7
32.2
73.5 112.8
146.4
183.9
21.4 49.6
72.7
140.6
183.3
257.7
363.6
0
50
100
150
200
250
300
350
400
2007 2008 2009 2010 2011 2012 2013
FTV AdRevenues
Subscriptions
PPVtransactions
DTOtransactions
Annual Growth
41% 26% 76% 74% 40%
Total
Source: IHS
Online TV revenues grew 41% YoY
Page 130 Figure 2.4
12
Spend on network TV programmes: 2012 - 2013
£1,772m £2,093m
£848m £747m
£814m £794m
£691m £708m
£492m £486m
£310m £298m £232m £246m £250m £260m £192m £179m
0
1,000
2,000
3,000
4,000
5,000
6,000
2012 2013
Channel 5
Other PSB portfolio channels
BBC digital channels
BBC Two
Channel 4
Other digital channels
ITV1/ITV Breakfast
BBC One
Film/Sport channels
+3.7% £m 1 yr change
£5,601m £5,811m
+4%
-1%
+2%
-12%
+18%
-2%
+6%
-4%
-7%
Increase in programme spend driven by sports channels
Source: Ofcom/broadcasters. Note: Figures expressed in nominal prices Page 167 Figure 2.42
13
224.9 219.2 216.4 205.6
17.2 22.2 24.2 26.2
0
50
100
150
200
250
2010 2011 2012 2013
Timeshift
Live
Average minutes of viewing per day by activity
Source: BARB
4hr 2m 4hr 2m 4hr 1m 3hr 52m
Aver
age
min
s/da
y
TV viewing fell below 4 hours in 2013
Page 154 Figure 2.30
14
343 345 347 341 311 316 314 309
269 270 269 256
234 232 227 216 199 196 196 185 169 165 157 148 151 147 142 134
0
50
100
150
200
250
300
350
2010 2011 2012 2013
Adults 65+
Adults 55-64
Adults 45-54
Adults 35-44
Adults 25-34
Adults 16-24
Children
The decline was seen across all ages
Source: BARB, Network
Average minutes of television viewing per day, by age, all homes
Average mins/day
Page 181 Figure 2.56
15
69%
50%
82%
16%
16%
12% 5%
13%
2% 5%
7%
3% 3% 6%
1% 2% 8%
0%
20%
40%
60%
80%
100%
All adults 16-24 65+
Short video clips
Streamed TV or films (paid-for)
Catch-up TV or films (free)
DVD / Blu-ray
Recorded TV
Live TV
16-24s spend less time watching live TV
Proportion of watching activities, by age group
Source: Ofcom Page 64 Figure 1.45
16
1% 2% 1% 4%
7% 6% 6% 8%
19% 17%
40%
2% 2% 3% 3% 3% 3% 5% 6% 7% 8%
14%
20% 22%
38%
0%
10%
20%
30%
40%
50%
Q1 2013 Q1 2014
BBC iPlayer remains most popular online VOD service Claimed use of selected online VOD services
Source: Decipher mediabug Page 145 Figure 2.19
17
42
47
38
24
12
20
9
9
0% 20% 40% 60% 80% 100%
H2 2012
H2 2013 TV total
PC/Laptop
Tablet
Smartphone
% Share
We are increasingly turning to TV sets and tablets to access on demand content
Estimated share of the UK long-form ‘pull’ VOD market, by device (programmes/films only)
Source: 3Reasons LLP. ‘TV total’ includes VOD via set-top box, internet-enabled sets and TVs connected by games consoles.
Page 147 Figure 2.21
Take-up of smart TVs among UK TV households
18
7 %
12 %
0 5 10 15
2013
2014
% of UK homes with a smart TV
Smart TV take-up is growing and more people are connecting them
Source: Ofcom technology tracker. Data from Q1 of each year
Consumers’ use of internet connection on smart TVs
18%
Yes
No
82%
23%
77%
2014
2013
Page 132/3 Figure 2.5/7
Source: Ofcom research, Q Have you ever used the internet connection on your smart TV set?
19
Internet and web-based content
Andrew Jackson, Senior Convergence Analyst, Market Intelligence
Mobile internet audiences grow while laptop and desktop audiences remain flat
20
0
10,000
20,000
30,000
40,000
50,000
60,000
Mar
-12
Apr
-12
May
-12
Jun-
12Ju
l-12
Aug
-12
Sep
-12
Oct
-12
Nov
-12
Dec
-12
Jan-
13Fe
b-13
Mar
-13
Apr
-13
May
-13
Jun-
13Ju
l-13
Aug
-13
Sep
-13
Oct
-13
Nov
-13
Dec
-13
Jan-
14Fe
b-14
Mar
-14
Laptop and desktop audience Mobile audience Digital audience
YoY growth YoY growth
11.0% 6.6%
4.2%
Source: comScore MMX, MMX-MP, and GSMA MMM, UK
Active audience on laptop, desktop, and mobile devices Unique audience (000)
1.5%
5.7%
Page 266 Figure 4.20
Tablets are preferred over laptops, desktops and smartphones
21
29
17 22
30
2 Laptop
Desktop
Smartphone
Tablet
Other
Most important device for internet access by device ownership Adults who own a desktop, laptop, smartphone and a tablet (%)
Source: Ofcom research, Q1 2014 Page 275 Figure 4.32
We spend 22 billion minutes a month on Google websites
22
0.91
1.00
1.20
1.99
2.51
3.09
3.65
4.06
14.77
22.07
0 5 10 15 20 25
Sky Sites
Glam Media
Amazon Sites
AccuWeather Sites
eBay
Microsoft Sites
BBC Sites
Yahoo Sites
Google Sites
Source: comScore MMX Multi-Platform, UK, March 2014
Top ten internet properties among the digital audience, by time spent Total Minutes (billions)
Page 285 Figure 4.39
Digital advertising was worth £6.3bn across internet, TV and press brands
23
3,219
4,516
575
184
537
990
1,882
3,794
4,642
6,300
0 1000 2000 3000 4000 5000 6000
Cinema
Radio
Out of home
Direct Mail
Press brands
TV
Internet
Non-Digital
Digital
Source: AA/Warc Expenditure Report, July 2014
UK advertising expenditure: 2013 Expenditure (£ millions)
Page 248 Figure 4.2
Digital display advertising grew by more than 22% in 2013
24
Source: IAB / PwC Digital Adspend 2008 – 2013
Digital advertising expenditure, by type: 2008 - 2013 £ millions
684 755 1,050 1,280 1,479 1,862 1,942 2,097
2,245 2,708
3,087 3,495
713 658 718
759 818
887
3,350 3,541 4,097
4,822 5,448
6,300
0
2000
4000
6000
2008 2009 2010 2011 2012 2013
Other
Classifieds
Paid for search
Display
Page 249 Figure 4.3
Mobile advertising spend doubled to more than £1bn in 2013
25
29 38 83 203
529
1,031
20 21 32
39 49
61
0
20
40
60
80
100
0
200
400
600
800
1000
2008 2009 2010 2011 2012 2013Mobile Advertising Expenditure Internet on mobile phone take-up
Source: IAB / PwC Digital Adspend 2008-2013; Ofcom consumer research.
Mobile advertising expenditure, and mobile internet take-up Expenditure (£ millions) \ UK adult take-up (%)
Page 251 Figure 4.5
Take-up of DVDs and Blu-Ray discs holds steady between 2005 and 2014…
26
93 92 88 81 84 79
31
80
0
20
40
60
80
100
Books Music CDs Video Cassettes DVDs*
2005
2014
Source: Ofcom Media Literacy Research 2005, Kantar Media Omnibus 2014 * Includes Blu-Ray discs in 2014
Take-up of physical media Adults (%)
Page 253 Figure 4.8
…but average DVD and Blu-Ray disc collection size increases
27
89 90
45 45
86 84
36
68
0
20
40
60
80
100
Books Music CDs Video Cassettes DVD discs*
2005
2014
Source: Ofcom Media Literacy Research 2005, Kantar Media Omnibus 2014 * Includes Blu-Ray discs in 2014
Size of physical media collection Adults with collection (%)
Page 254 Figure 4.10
There are generational differences in music consumption…
28
63 72
85 91 91 89
82 70 67
47
32
11
88
70 58
39
22
7
0
20
40
60
80
100
16-24 25-34 35-44 45-54 55-64 65+
Physical Music Collection Digital Music Collection Music Streaming
Source: Kantar Media Omnibus 2014
Take up of physical music, digital music and music streaming, by age Adults (%)
Page 258 Figure 4.15
…but digital video streaming has leap-frogged digital video ownership for all ages
29
40
25
6
82
66
28 29 17
4 0
20
40
60
80
100
16-34 35-54 55+
Download To Own Video Streaming SVOD
Source: Kantar Media Omnibus 2014
Take up of digital video services, by age Adults (%)
Page 259 Figure 4.16
30
The telecoms industries
Nick Collins, Senior Telecoms Analyst
31
Summary • Total telecoms revenue but fixed broadband revenue
• Total fixed lines but retail fixed voice revenues
• Fixed call volumes while non-traditional communication • Retail mobile revenue as SMS use • Mobile data connections and use of mobile data services
• ADSL broadband connections while superfast broadband take-up
Total telecoms revenues fell by 1.7% in 2013
32
Source: Ofcom / operators / IDC Page 324 Figure 5.26
10.7 10.5 10.1 8.9 8.3 7.9
13.4 12.9 12.5 12.3 12.3 12.4
14.8 15.0 15.1 15.4 15.9 15.6
2.8 2.7 2.7 2.7 2.7 2.7
41.6 41.1 40.5 39.4 39.3 38.6
0
10
20
30
40
50
2008 2009 2010 2011 2012 2013
Corporatedata services
Retail mobile
Retail fixed
Wholesaleservices
Revenue (£bn)
Average household telecoms spend fell by 2.9% in 2013
33
Source: Ofcom / operators / ONS Page 346 Figure 5.54
27.59 25.67 25.49 23.80 22.85 22.32
52.32 49.95 49.32 48.70 48.23 45.65
11.77 11.59 11.28 11.79 12.49 13.19
£91.67 £87.21 £86.09 £84.29 £83.58 £81.17
3.9% 3.9% 3.8% 3.8% 3.8% 3.8%
0%
1%
2%
3%
4%
0
50
100
2008 2009 2010 2011 2012 2013
Fixed internet
Mobile voice &data
Fixed voice
As a proportion oftotal householdspend
£ per month (2013 prices) As a % of total expenditure
Total outgoing UK fixed and mobile voice call minutes fell by 3.9% in 2013
Source: Ofcom / operators Page 326 Figure 5.28
141 128 123 111 103 92
85 90 98 103 105 110
33 36 33 29 27 24
259 255 254 243 235 226
0
100
200
300
2008 2009 2010 2011 2012 2013
Pre-paymobile
Post-paymobile
Fixed
Billions of minutes
Fixed voice
Retail fixed voice revenues declined by 1.7%
36
Source: Ofcom / operators
Page 328 Figure 5.32
5.3 5.0 5.0 5.2 5.3 5.5
1.4 1.3 1.2 1.1 1.0 0.9 0.6 0.5 0.4 0.4 0.3 0.3
1.7 1.6 1.5 1.2 1.0 0.9
1.3 1.2 1.1 1.0 0.9 0.8
10.2 9.6 9.3
8.9 8.6 8.4
0
2
4
6
8
10
2008 2009 2010 2011 2012 2013
Other calls
Calls to mobiles
International calls
UK geographiccalls
Line rental
Revenue (£bn)
The real price of a basket of residential fixed voice services increased in 2013
37
Source: Ofcom / operators
Page 353 Figure 5.62
18.37 17.56 17.98 18.01 18.39 18.71
1.22 1.00 0.92 0.76 0.69 0.63 2.15 2.14 2.21 2.15 2.01 1.97
21.74 20.70 21.11 20.92 21.08 21.30
0
5
10
15
20
25
2008 2009 2010 2011 2012 2013
Calls to mobiles
International calls
Fixed access &UK geographiccalls
£ per month (2013 prices)
-4.8% 2.0% -0.9% 0.8% 1.1% Annual change -0.7%
The decline in fixed voice call volumes accelerated in 2013
38
Source: Ofcom / operators Page 330 Figure 5.34
91.9 85.1 82.8 74.6 69.0 60.8
7.1 6.7 6.7
6.5 5.8
4.9
13.5 12.3 11.8
10.3 9.4
8.4
28.2 23.7 21.7
19.7 18.3
17.5
140.7 127.9 123.0
111.1 102.5
91.6
0
50
100
150
2008 2009 2010 2011 2012 2013
Other calls
Calls tomobiles
Internationalcalls
UK geographiccalls
Minutes (billions)
39
Source: Ofcom research, data as at Q1 of each year Page 351 Figure 5.60
Use of non-traditional communication services is increasing
80 71
52
22 17
4
81 78
54
28 24
8
83 78
53
35 32
14
0
20
40
60
80
100
Mobilemessaging
Email Socialnetworking
sites
VoIP (voicecall only)
Mobile instantmessaging
Video calls
2012
2013
2014
Proportion of respondents (per cent)
The ability to video call and lower prices are the main advantages of using VoIP
40
Source: YouGov online survey Page 314 Figure 5.13
2%
9%
15%
17%
28%
38%
44%
55%
57%
61%
Other
I can see whether others are online
Call quality is better if the connection is fast enough
I can use three-way calling
I can send/receive message or data files while talking
I can receive and make calls from wherever I am
I can use video communication
Costs less than using my landline
Costs less than using my mobile phone
I can see people through video calling
% of all adults in the UK who use VoIP
The total number of fixed lines increased by 2.4%, although business lines fell in 2013
41
Page 331 Figure 5.36 Source: Ofcom / operators
23.5 23.4 23.8 23.9 24.4 25.0
10.7 10.2 9.7 9.4 8.8 8.3
34.2 33.5 33.4 33.3 33.2 33.4
0
10
20
30
40
2008 2009 2010 2011 2012 2013
Business
Residential
Lines (millions)
Fixed broadband services
Almost four in five UK premises are able to receive superfast broadband services
43
Source: Ofcom / operators, June 2014 data
Proportion of premises (per cent)
9 11 1
35 40
1
34 35
31
78 85
34
0
20
40
60
80
100
UK UK Urban UK Rural
Fibre-only
Cable and fibre
Cable-only
Nations reports Figures 5.2, 5.3 and 5.4
The number of ADSL broadband connections fell for the first time in 2013
44
Source: Ofcom / operator data Page 332 Figure 5.38
Connections (millions)
8.1 8.0 7.8 8.1 7.5 6.6
5.5 6.4 7.5 7.9 8.8 9.2
3.7 3.8 4.0 4.1 4.3 4.4 0.1 0.4 1.1 2.3
17.3 18.2 19.5
20.6 21.7 22.6
0
5
10
15
20
25
2008 2009 2010 2011 2012 2013
Others
Fibre
Cable
LLU-ADSL
Non-LLUADSL
Over a quarter of the fixed broadband connections were superfast in Q1 2014
45
Source: Ofcom / operator data Superfast is defined as a package having a headline speed greater than 30Mb/s
Page 310 Figure 5.8
0.1 0.1 0.1 0.2 0.4 0.6 0.8 1.1 1.4 1.9 2.3 3.2 3.9 4.4 5.0 5.6 6.1
0.3 0.4 0.5 0.9 1.8 2.8 4.1 5.2 6.4 8.8
10.9 14.9
17.5 19.9
22.3 24.6
26.7
0
10
20
30
0
2
4
6
8
10
2010
Q1
Q2
Q3
Q4
2011
Q1
Q2
Q3
Q4
2012
Q1
Q2
Q3
Q4
2013
Q1
Q2
Q3
Q4
2014
Q1
Superfastconnections(left axis)
Superfast as a% of allconnections(right axis)
Per cent Connections (millions)
46
Average price of a fixed broadband connection increased in real terms in 2013
Source: Ofcom / operators Page 356 Figure 5.66
£19.29 £17.81 £16.44 £16.55 £16.81 £16.96
0
5
10
15
20
2008 2009 2010 2011 2012 2013
£ per month
Average actual speed
-11.2% -7.7% +0.7% -7.7% +1.6% +0.9% Annual change
4.1Mbit/s (April)
6.2Mbit/s (November)
3.6Mbit/s (November)
7.6Mbit/s (November)
12.0Mbit/s (November)
17.8Mbit/s (November)
Increasing superfast broadband take-up is driving fixed internet revenue growth
47
Source: Ofcom / operators Page 332 Figure 5.37
0.1 0.1 0.1
3.1 3.2 3.2 3.4 3.7 4.0
3.2 3.3 3.2 3.4 3.7
4.0
0
1
2
3
4
5
2008 2009 2010 2011 2012 2013
Broadband
Narrowband
Revenue (£bn)
48
Source: Ofcom research, data as at Q1 of each year
Satisfaction with fixed broadband speed has increased
Page 359 Figure 5.71
45 42 39 39 41 47
36 38 41 41 39 37
81 80 80 80 81 84
0
20
40
60
80
100
2009 2010 2011 2012 2013 2014
Fairlysatisfied
Verysatisfied
Proportion of all adults with service (per cent)
Mobile telecoms
The total number of mobile subscriptions fell for the first time in 2013
50
Source: Ofcom / operators Note: Excludes M2M connections.
Page 338 Figure 5.45
Subscriptions (millions)
47.5 47.6 44.9 42.5 39.9 36.1
30.0 33.0 36.7 39.8 43.5 46.9
77.5 80.6 81.6 82.4 83.4 83.1
0
20
40
60
80
100
2008 2009 2010 2011 2012 2013
Post-pay
Pre-pay
Falling SMS use resulted in a decline in retail mobile revenues in 2013
51
Source: Ofcom / operators
Page 334 Figure 5.40
6.3 6.1 6.4 6.8 7.3 7.8
5.1 4.7 4.3 3.9 3.7 3.3
2.8 2.7 2.6 2.5 2.4 1.8
0.6 1.6 1.8 2.1 2.5 2.7 14.8 15.0 15.1 15.4 15.9 15.6
0
5
10
15
20
2008 2009 2010 2011 2012 2013
Out-of bundledata
Out-of-bundlemessaging
Out-of-bundlecalls
Access andbundled services
Revenue (£bn)
The real price of a basket of mobile services fell by 3.5% in 2013
52
Source: Ofcom / operators
Page 360 Figure 5.72
10.09 9.19 9.26 9.64 10.10 10.12
5.07 4.16 3.49 2.92 2.47 1.99
5.77 3.56 2.88 2.43 2.26 2.19
£20.93
£16.90 £15.63 £14.99 £14.82 £14.30
0
5
10
15
20
25
2008 2009 2010 2011 2012 2013
Meteredmessaging
Metered voice
Line rental fee,UK landlinecalls andinclusive calls,texts and data
£ per month (2013 prices)
-13.7% -19.2% -7.5% -4.1% -1.2% -3.5% Annual change
53
More than half of new post-pay mobile contracts cost less than £20 a month
Source: GfK Retail and Technology UK Ltd
Page 361 Figure 5.74
12 12 12 13 15 18 17 18 20 24 26 26 29 30 29 27 30 31 32 34 35 20 21 23 23 22 20 19 18 17 18 19 20 20 18 16 13 13 12 15 16 19 10 13 13 13 13 13 15 16 14 13 13 11 11 9 11 11 11 13 12 10 11 7
10 10 11 11 14 15 17 21 14 12 10 10 10 12 13 13 13 12 11 9 14
13 12 13 12 13 11 10 7 8 8 9 9 11 10 9 9 11 11 9 8 26 19 15 15 14 11 13 13 12 14 14 15 14 15 16 17 13 13 11 10 9 12 13 15 12 13 10 10 10 9 9 8 9 7 6 6 10 10 7 7 11 8
0%
20%
40%
60%
80%
100%
2009
Q1
Q2
Q3
Q4
2010
Q1
Q2
Q3
Q4
2011
Q1
Q2
Q3
Q4
2012
Q1
Q2
Q3
Q4
2013
Q1
Q2
Q3
Q4
2014
Q1
£40+
£35-39.99
£30-34.99
£25-29.99
£20-24,99
£15-19.99
£0-14.99
Proportion of sales (%)
There were 55 million mobile data connections in the UK at the end of 2013
54
Source: Ofcom / operators
Page 338 Figure 5.46
4.9 5.2 5.1 4.9
24.6 30.1
38.4 44.5
3.2 4.1
5.1 5.6
32.6 39.4
48.6 55.0
0
20
40
60
2010 2011 2012 2013
M2M
Internet onhandset
Dedicatedmobilebroadband
Connections (millions)
55
Use of mobile data services is increasing
Source: Ofcom research, data as at Q1 of each year
Page 367 Figure 5.83
40
29
19 19
47
36 29
26
52 45
35 34
0
10
20
30
40
50
60
Web browsing Emailing Downloading apps Instant messaging
2012
2013
2014
Proportion of mobile users using service (per cent)
4G mobile covers nearly three quarters of UK premises
56
Source: Ofcom based on operator data, June 2014 data
73.0 79.3
34.8
0
20
40
60
80
UK UK Urban UK rural
Proportion of premises with 4G coverage (per cent)
Nations reports Figure 5.7
4G take-up growing steadily
57
Source: Ofcom research April 2014
Page 306 Figure 5.3
12%
88%
4G
Non-4G
Proportion of mobile users (%)
58
Post
Steven Cape, Senior Analyst, Market Intelligence
Total mail revenues have risen by 2.9%...
59
6,953 6,837 6,653 6,899 7,303 7,514
6,841 6,697 6,505
6,744 7,141 7,339
6,120 5,772 5,425 5,475 5,696 5,844
721 924 1,080 1,270 1,445 1,495
112 140 142 150 157 163 0
2,000
4,000
6,000
8,000
2008 2009 2010 2011 2012 2013
Total market
Royal Mailtotal
Royal Mailend-to-end
Royal Mailaccess
Accessoperators
Revenue (£m)
Source: Ofcom / operators
Page 380 Figure 6.7
…while mail volumes have declined by 5%
60
20,577 18,651
17,546 16,676 15,545 14,764 15,574
12,534 10,629
9,502 8,299 7,523 5,003
6,105 6,906 7,166 7,228 7,185
12 11 9 18 56 0
6,000
12,000
18,000
24,000
2008 2009 2010 2011 2012 2013
Total mail
Royal Mail end-to-end
Royal Mailaccess
Other operatorsend-to-endletters
Volume (million items)
Source: Ofcom / operators
Page 381 Figure 6.8
25% 33%
40% 43% 46% 49%
0%
10%
20%
30%
40%
50%
2008 2009 2010 2011 2012 2013
61
Access mail accounts for 49% of total mail
Proportion of access in total mail volume
Year-on-year growth rate of access volumes
39.1% 20.3% 14.8% 2.2% 0.8% -0.6%
Source: Ofcom / operators
Page 382 Figure 6.9
End-to-end volume has grown but is less than 0.5% of total volume
62
11.8 11.3 8.5 18.0
56.1
0
10
20
30
40
50
60
2009 2010 2011 2012 2013
Volume (million items)
Source: Ofcom / operators
Page 383 Figure 6.10
46
82
38 17
32 24 24 32
0
30
60
90
Directmail
Transactionalmail
Catalogues /brochures
Subscriptionmagazines
Largerparcels
Smallerparcels
Personal letters
Invitations /greetings
cards
63 63
The majority of mail received by consumers is sent by businesses
Proportion of respondents (%)
Source: Ofcom research
Page 397 Figure 6.28
Business to consumer Parcels Consumer to consumer
Residential consumers are more likely to receive parcels from Royal Mail
64
Proportion of consumers reporting delivery of parcels, by company Company parcels delivered by (% of all who have received a parcel in the past week)
50%
21%
19%
10%
Only RoyalMail
Royal Mailand anyother/sOnly other/s
Don't know
71
9 8 7 6 6 4 4 4 0 %
20 %
40 %
60 %
80 %
Page 396 Figure 6.26 Source: Ofcom research
65
Questions?
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