[2013] Ofcom - The Communications Market Report 2013

Ofcom analyst briefingOfcom analyst briefing

The CommunicationsThe Communications Market Report 2013

1 August 20131 August 2013

AgendaMarket OverviewJames Thickett, Director of Research

Th di i l i d t i

Key consumer trendsLisa Etwell, Senior Research Manager, Market Research

The audio-visual industriesJane Rumble, Head of Media Research and Market Intelligence

Internet and web based content

The telecoms industries

Internet and web-based contentChris Adams, Head of Market Intelligence for Telecoms and Networks

The telecoms industriesChris Adams, Head of Market Intelligence for Telecoms and Networks

Post

1

Steven Cape, Senior Analyst, Market Intelligence

Market overviewMarket overview

James Thickett, Director of Research

2

Average household spend has increased year on year following years of declineyear-on-year following years of decline

£ per month (2012 prices)

122 42 118 87

5.2% 5.2% 5.2% 5.1% 5.2% 5.3%

5%

6%

150

Post

Radio

p ( p )

11.74 11 35 11 44 10 92 11 91

28.92 28.20 29.13 28.93 28.91 28.41

122.42 118.87 116.13 113.04 112.75 113.51

3%

4%

100

Television

Fixed internet

M bil i

48.65 47.74 45.31 44.17 45.21 46.73

11.35 11.44 10.92 11.26 11.91

1%

2%50

Mobile services

Fixed voice

% of total spend27.98 26.62 25.33 24.52 22.48 21.61

0%02007 2008 2009 2010 2011 2012

% of total spend

3

Page 31Figure 1.12

Source: Ofcom / operators/ ONSNotes: Adjusted for RPI

Take-up of key services and devices

100%+1 +/-0 +/-0 -1 +/-0 -2 +6 +12 +2 +13 +8 +2 -8

Year on year percentage point change:

80%

100%

97% 94%84% 75% 72%40%

60%

72%53% 53% 51% 44%

24% 22%7% 5%0%

20%

7% 5%0%

Source: Ofcom research, Q1 2013. DAB take-up from RAJAR Q1 2013.4

Page 25Figure 1.4

On average, each UK household owns 3 different types of internet-enabled devicesdifferent types of internet-enabled devices

75

100

olds

(%) 1+

2+

50

75

n of

hou

seho

3+

4+86%

74%59%

44%30%

25

Pro

porti

on

5+6+

30%18%

0

5

Source: Ofcom research, Q1 2013

Page 281Figure 4.25

Take up of connected devices grows

39%

51%60%

Q1 2012 Q1 2013

39%

22% 24%

40%

14%11%

5% 7%

20%

0%

6

Source: Ofcom research

Page 25Figure 1.4

Average mobile data use has tripled since 2010

M di thl d t (MB)

has tripled since 2010

Median monthly data use (MB)

236

200

250

154180

150

200

74

50

100

0July 2010 January 2012 July 2012 January 2013

7

Source: BillMonitorPage 292Figure 5.10

Fixed call volumes continued to decline and

Minutes (billions)

mobile call volumes down for a second year in a row

AnnualChange

141128

121123 125 124 122

150

-9.2% -3.9% -9.8% -7.2% +5.2% +3.3% -0.8% -1.6%

115128

121123 125111

124

103

122

1002008

50

2008200920102011

0Fixed Mobile

20112012

8

Source: Ofcom/operators

Page 311Figure 5.1

The growth in text message volumes has slowedslowed

Messages (billions)

Outgoing SMS message volumes

128

151 152150

Messages (billions)

4253

6883 89

6685

104100

Post-pay

34 43 52 61 68 6333

4250 Pre-pay

02007 2008 2009 2010 2011 2012

9

Source: Ofcom / operators

Page 343Figure 5.39

Fixed voice and broadband remain most popular bundle of servicespopular bundle of services

Proportion of households

6%7%

50%53%

57%60%

60%

70%

Other

Mobile and broadband

19% 21%2%2% 2%

2%3%

1%

1%1%

1%1%

2%

2%1%

5% 5%

6%9%

8%

6%

40% 39%

46%50%

40%

50% Fixed voice, broadband, mobile and multi-channel TVFixed voice, dial-up and multichannel TV

7% 12%

16%17% 16%

19%

5%

5% 1%

4%4%

3% 3%

1%1%

1% 1%

4% 3%29% 29%

20%

30%Fixed voice and multichannel TVFixed voice and dial-up

Fixed voice broadband and

9% 12%19% 17% 20% 22% 24% 27% 27%

3%5%7%5%

0%

10%

Fixed voice, broadband and multichannel TVFixed voice and broadband

1010


Page 30Figure 1.10

0%Q1 2005 Q1 2006 Q1 2007 Q1 2008 Q1 2009 Q1 2010 Q1 2011 Q1 2012 Q1 2013

Key consumer trendsKey consumer trends

Lisa Etwell, Senior Research Manager

11

The reinvention of the 1950s living roomThe reinvention of the 1950s living room

12

13

Returning to the living room…

14


15


16


17


18

…but bringing devices with us

19


20


21


22


23

We now talk about TV live, while watching

Wimbledon Men’s FinalWimbledon Men s Final....

•1 1 million people tweeted worldwide•1.1 million people tweeted worldwide

• 2 6 million tweets2.6 million tweets

• 80% tweets from mobile devices80% tweets from mobile devices

24

Source: Ofcom research, 2013, All with TV

The audio-visual industriesThe audio visual industries

Jane Rumble, Head of Media Research and Market Intelligence

25

TV industry revenues grew by 0.8% in 2012

£11,018 £11,038£11,112 £11,664 £12,288£12,185

2 577 2 5862,607

2,628 2,719780 787 721732

687 722

£9 000m

£12,000m

Other revenue

3 576 3,470 3,1363,486

3619 3,547

2,598 2,577 2,586

£6,000m

£9,000m

BBC income allocated to TV

4 596 4 839 5 251 5 300

3,576 3,470

£3,000m

£6,000m

Net advertising revenue

4,064 4,277 4,596 4,839 5,251 5,300

£0m2007 2008 2009 2010 2011 2012

Subscription revenue

26

2007 2008 2009 2010 2011 2012Page 161Figure 2.35Source: Ofcom/broadcasters

NAR falls for the first time since 2009

£4,000m

Net advertising revenue (£m)1 year 5yr CAGR

Growth

£803m £808m

£786

£824m £896m £905m

£3,576m £3,471m£3,136m

£3,486m £3,619m £3,547m

£3,000m

£3,500m

,

Commercial multichannels

-2% -0.2%

1% 2%

£386m£459m

£453m£518m £563m £588m

£786m

£2,000m

£2,500m Commercial PSB portfolio channels

M i i l5% 3%

4% 9%

£2,387m £2,204m£1,896m

£2,144m £2,159m £2,054m

£500

£1,000m

£1,500m Main commercial PSB channels

-5% -3%

£0m

£500m

2007 2008 2009 2010 2011 2012

27

Source: Ofcom/Broadcasters

Page 163Figure 2.37

TV viewing remains resilient

5

Average TV hours per viewer, per day

4

5

3

3.6 3.6 3.7 3.8 4.0 4.0 4.0

1

2

02006 2007 2008 2009 2010 2011 2012

28

Page 181Heading 2.3.3Source: BARB

Time-shifted viewing climbs but slower than DVR ownership...

80%

p

55%

63%67%

60%DVR take-up

29%

42%40% Time-shifted

viewing

18%

2% 4% 6% 7% 9% 10%20%

0%2007 2008 2009 2010 2011 2012

29

Source: BARB, all individuals

...and time-shifted viewing varies by genre

Proportion of time-shifted viewing, by programme genre: 2012

343030%

40%

21 20 19 1914 12 10 9 8 810%

20%

30%

10 9 8 83

0%

10%

ama

oaps

Arts

arie

s

ilms

men

t

sure

usic

ious

en's

port

fairs

ews

Dra So

A

Doc

umen

ta F

Ent

erta

inm

Hob

bies

/Lei

s M

Rel

igi

Chi

ldre S

Cur

rent

Af f N

30

Source: BARB, DVR Individuals 4+. Total minutes of viewing to each programme genre

The public service broadcasters maintainthe greatest share of viewing

12.9% 12.8% 12.3% 11.8% 13.2% 11.4% 12.2%100%

Other

Audience share

5 1% 5.6% 5.9% 6.0% 5.9% 5.9% 5.9%8.7% 7.6% 6.8% 7.4% 8.4% 8.8% 8.3%4.0% 3.9% 3.9% 4.0% 4.1% 4.0% 4.3%2.9% 2.7% 2.6% 2.7% 1.9% 2.3% 2.4%2.6% 2.7% 2.6% 2.6%

80%Virgin Media

Viacom

22 0% 22 3% 22 6% 22 6% 22.7% 23.1% 22.3%

11.2% 11.2% 11.7% 11.5% 11.5% 11.8% 11.5%5.1% 5 6%

60%UKTV

BSkyB

Channel 522.0% 22.3% 22.6% 22.6% 22.7%

20%

40% Channel 5

Channel 4

ITV30.6% 31.2% 31.8% 31.4% 32.3% 32.7% 33.2%

0%

20%

2006 2007 2008 2009 2010 2011 2012

ITV

BBC

31

Source: BARB

Page 194Figure 2.70

2006 2007 2008 2009 2010 2011 2012

Seven percent now own a smart TV

Top reasons people buy a smart TVTop reasons people buy a smart TV80 %

51

3340 %

60 %

3329

25 2518 1820 %

40 %

0 %I needed a

new TV and I liked the look and

I wanted the best screen

I like to keep up with the

It was the best TV I

I like the range of

I wanted to stream TV

decided to buy one with

the latest technology

design of the TV

latest technology

could get for my budget

internet connected services available

programmes/ films/ video

clips straight to my TV

32

Page 133Figure 2.7Source: Ofcom research, Q1 2013

Revenues from online delivery modelsincrease by 38%

Revenues (£m)

Total

252.4250

300 Annual Growth

38%

142.9140.6

183.3

150

200FTV views27%

22.3 24.562.0

32.2

73.5112.8

21 449.6

72.7

50

100Subscriptions

PPV transactions-32%

153%

17.1 39.6 41.0 44.115.0 18.821.4

0

50

2007 2008 2009 2010 2011 2012DTO transactions8%

33

Source: Screen Digest.Page 177Figure 2.53

Forty percent watch catch up TV services regularlyregularly

53%Video clips either streamed or downloaded

40%Catch up TV services either streamed or downloaded

16%TV and Film services e.g. Netflix/Lovefilm

0% 10% 20% 30% 40% 50% 60%

34

Source: Ofcom research, Feb 2013.Page 138Figure 2.13

BBC iPlayer remains the most popular TV catch up serviceUnique audience

12,000BBC iPlayer Channel4 4oD Demand 5

8,000

10,000

y

4 000

6,000

2,000

4,000

0

May

-10

Jul-1

0

Sep-

10

Nov

-10

Jan-

11

Mar

-11

May

-11

Jul-1

1

Sep-

11

Nov

-11

Jan-

12

Mar

-12

May

-12

Jul-1

2

Sep-

12

Nov

-12

Jan-

13

Mar

-13

35

Source: comScore MMX Page 205Figure 2.83

M S N J M M S N J M M S N J M

Unique visitors to selected online film/TV sitesTotal unique visitors (thousands)

3,000

1 807

2,4672,326

2,000

2,500 Apr-12

1,205

1,8071,636 1,594

1 000

1,500

,Sep-12

Apr-13

370614

500

1,000 Apr 13

0

36

Page 207Figure 2.85Source: comScore MMX

Internet and web-based contentInternet and web based content

CChris Adams,Head of Market Intelligence for Telecoms and Networks

37

Digital advertising was worth £5.4bn

Digital advertising expenditure, by type: 2008 - 2012££ millions

8544,809

5,4166000

3 168715 677751

788854

3,350 3,5414,097

4000OtherClassified

1,987 2,1482,345

2,7693,168715

2000

ClassifiedSearchDisplay

637 709 945 1,143 1,3040

2008 2009 2010 2011 2012

38

Source: IAB / PwC Digital Adspend 2008 – 2012

Page 266Figure 4.8

Digital advertising accounted for £623m across TV and press advertising channelsacross TV and press advertising channels

Digital advertising expenditure, by channel: 2012

4793 623 5,416Internet

Expenditure (£ millions)

3,517

4,376

519

2 127

4,036

4,480

Direct Mail

Press brands

TV

Non-Digital

553

970

2,127

Radio

Out of home

Direct MailDigitalOverlap

213

0 1000 2000 3000 4000 5000 6000

Cinema

39

Source: AA/Warc Advertising Expenditure Report 2013, http://expenditurereport.warc.com/

Page 265Figure 4.7

Mobile advertising expenditure more than doubled in 2012doubled in 2012

Mobile advertising expenditure, and mobile internet take-up

526

49

60600Expenditure (£ millions) \ UK adult take-up (%)

20320 21

32

3940400

29 3884

20320 2120200

002008 2009 2010 2011 2012

Mobile Advertising Expenditure Internet on mobile phone take-up

40

Source: IAB / PwC Digital Adspend 2008 – 2012; Ofcom consumer research.

Page 267Figure 4.10

Mobile internet audiences are growing faster than those on laptops and desktopsfaster than those on laptops and desktops

( )

60 YoY growth YoY growth

4.1%3.1%

Unique audience (millions)

20

4010.6%16.5%

0

Laptop and desktop audience Mobile audience Digital audience

41

Source: comScore MMX,UK, home and work panel, April 2011 to April 2013; comScore MMX Multi-Platform, UK, home and work panel, January 2013 to April 2013; comScore GSMA MMM, UK, April 2011 to April 2013.

Page 276Figure 4.19

Smartphones and tablets now make up more than 30% of webpage trafficmore than 30% of webpage traffic

P ti f i (% f ll i d)

Desktop/Laptop Tablets Mobiles

Proportion of page views (% of all page views served)

89 4 8March 2012

69 8 23February 2013

0% 20% 40% 60% 80% 100%

42

Source: comScore Device Essentials, March 2012 and February 2013, UK ,Tablet figures are from BETA data.

Page 283Figure 4.27

Despite growth of smartphones and tablets, laptops and desktops are still importantlaptops and desktops are still important

Most important device for internet accessI t t (%)Internet users (%)

Smartphone

Tablet8%

Laptop46%

p15%

46%

Desktop28%

43

Source: Ofcom research, Q1 2013

Page 284Figure 4.28

96% of internet users visit Google at least once a month

Top 10 most popular internet properties among the digital audienceA ti h (%)

96

75 71 7180

100

Active reach (%)

71 7158 57 52 51 50 49

40

60

80

0

20

Google Sites

Microsoft Sites

Amazon Sites

Facebook BBC Sites

Yahoo! Sites

Wikimedia Foundation

Sites

eBay Apple Inc.

Glam Media

43.6 34.1 32.5 32.4 26.4 26.2 23.6 23.4 22.7 22.5Unique Audience(millions)

44

Source: comScore MMX Multi-Platform, UK, April 2013

Page 292Figure 4.35

Users spend on average 8 hours a month on FacebookFacebook

Top 10 sites by time spent among the top 100 internet propertiesMi t i it th

458486

Google SitesFacebook

Minutes per visitor per month

105150

166

Microsoft SiteseBay

Yahoo! Sites

66788490

Perform SportsDAILYMOTION.COMTrader Media Group

TUMBLR.COM*

6166

0 100 200 300 400 500 600

BBC SitesPerform Sports

45

Source: comScore MMX Multi-Platform, UK, April 2013

Page 293Figure 4.36

Average weekly internet sales peaked at £850m during Christmas 2012£850m during Christmas 2012

GB i t t t il l (£ ) / All t ili l di t ti f l (%)

12

15

800

1000Average weekly internet sales Internet sales as a proportion of all retailing

GB internet retail sales (£m) / All retailing excluding automotive fuel (%)

6

9

12

400

600

800

0

3

6

0

200

400

00

May

-09

Jul-0

9

Sep

-09

Nov

-09

Jan-

10

Mar

-10

May

-10

Jul-1

0

Sep

-10

Nov

-10

Jan-

11

Mar

-11

Ma y

-11

Jul-1

1

Sep

-11

Nov

-11

Jan-

12

Mar

-12

Ma y

-12

Jul-1

2

Sep

-12

Nov

-12

Jan-

13

Mar

-13

May

-13

46

Source: Office for National Statistics, Retail Sales Statistical Bulletin, May 2009 to May 2013http://www.ons.gov.uk/ons/rel/rsi/retail-sales/may-2013/rft-rsi-tables-may-2013.xls

Page 302Figure 4.50

Half of all internet users visit Amazon and eBayAmazon and eBay

Active reach of selected online retailers on laptop, desktop and mobileActive reach of selected online retailers on laptop, desktop and mobileActive reach (%)

5152

eBayAmazon

1418

2151

AsdaTescoArgoseBay

89910

John LewisASOS

Marks and SpencerNext

8

0 20 40 60

Debenhams

47

Source: comScore MMX Multi-Platform, UK, April 2013Page 303Figure 4.51

A fifth of mobile internet users have made h f h i h dpurchases from their handset

Mobile retail activities conducted by mobile internet users(%)

2225Found store location

Mobile internet users (%)

17

16

20

21

Compared product prices

Purchased goods or services

Apr-13

13

16

17

20

Checked product availability

Researched product featuresApr 13Apr-12

1417

0 5 10 15 20 25 30

Found coupons or deals

48

Source: comScore MobiLens, UK, 3 month averages ending April 2013 and April 2012Page 305Figure 4.54

The telecoms industryThe telecoms industry

CChris Adams,Head of Market Intelligence for Telecoms and Networks

49

SummarySummary

• Total telecoms revenue Retail revenues

• Total fixed lines but in residential lines

• Call volumes while the basket price of residential fixed services

• Active mobile subscribers and average mobile data consumption

• Over a million additional fixed broadband connections

• Superfast broadband take-up has doubled since June 2012

50

Superfast broadband take up has doubled since June 2012

Total telecoms revenue fell by 1.8% in 2012…

50

Revenue (£bn)

15 0 15 5

3.2 3.2 3.3 3.4 3.5 3.5

42.1 42.5 41.2 40.4 39.5 38.840

50

Corporate data services

Retail mobile

13.6 13.4 12.9 12 5 12 2 12 2

15.0 15.5 14.9 14.9 15.1 15.3

20

30 Retail mobile

Retail fixed

10.3 10.5 10.1 9.7 8.8 7.8

12.5 12.2 12.2

0

10 Wholesale

S Of / t / IDC

2007 2008 2009 2010 2011 2012

51

Source: Ofcom / operators / IDC Page 332Figure 5.22

… however, retail revenues increased by 0.9% during the year

Revenue (£bn)

2.7 2.8 2.6 2 6 2 5 2 4

0.8 1.2 1.5 1.7 2.0 2.4

28.5 28.9 27.8 27.4 27.3 27.530 Mobile data

Revenue (£bn)

11.5 11.5 10.9 10.6 10.5 10.6

2.6 2.5 2.4

20Mobile messaging

Mobile access & voice

10.4 10.2 9.6 9.3 8.8 8.5

3.2 3.2 3.3 3.2 3.4 3.710voice

Broadband and narrowband

Fixed voice0

2007 2008 2009 2010 2011 2012

ed o ce

52

Source: Ofcom / operatorsPage 333Figure 5.23

Average household telecoms spend increasedafter a period of decline

3 8% 3 8%

£ per month (2012 prices) As a % of total expenditure

11 4£88.38 £85.71 £82.07 £79 62 £78 94 £80.25

3.8% 3.7% 3.7% 3.6% 3.7% 3.8%

3%

4%

100 Internet & broadband

48.65 47.74 45 31 44 17 45 21 46 73

11.74 11.35 11.44 10.92 11.26 11.91£79.62 £78.94 £80.25

2%50

Mobile voice & data

27.98 26.62 25.33 24.52 22.48 21.61

45.31 44.17 45.21 46.73

1%Fixed voice

As a proportion of0%0

2007 2008 2009 2010 2011 2012

As a proportion of total household spend

53

Source: Ofcom / operators / ONS Page 354Figure 5.50

Total call volumes continued to decline in 2012, falling by 4.2% during the year, g y g y

Billions of minutes

25 28 29 27 21

254 256 249 248 235 225

300

Billions of minutes

80 87 91 98 102 104

29 27 21 18200 Pre-pay mobile

Post-pay mobile

149 141 128 123 111 103

0

100p y

Fixed0

2007 2008 2009 2010 2011 2012

54

Source: Ofcom / operators Page 333Figure 5.24

The average cost of a mobile-originated callminute is 5% lower than for fixed calls

15

Pence per minute

7 6 7.9 8.1 8.1

8.6 9.110.9 10.0

9.0 8.5

8.5 8.6

10 Fixed

7.6 7.9

0

5 Mobile

02007 2008 2009 2010 2011 2012


Fixed voiceFixed voice

The total number of fixed lines fell in 2012, but residential lines increased by 2.1%y

Lines (millions)

34.5 34.2 33.5 33.4 33.3 33.140

10.9 10.7 10.2 9.7 9.4 8.8

20

30Business

23.6 23.5 23.4 23.8 23.9 24.410

20

Residential

02007 2008 2009 2010 2011 2012

57

Page 338Figure 5.31Source: Ofcom / operators

Fixed voice volumes fell by 7.7% in 2012

Minutes (billions)

6 9

31.028.2

23 7 21 7

149.5140.7

127.9 123.0111.1

102 5

150 Others

I i l14.6 13.5 12.3 11.810.3 9.4

6.9 7.16.7 6.7

6.5 5.8

23.7 21.719.7

18.4

102.5100

International calls

Calls to mobiles

97.0 91.9 85.1 82.8 74.6 68.950

mobiles

UK geographic calls

02007 2008 2009 2010 2011 2012

58


Use of alternatives to traditional voice calls are increasing

P ti f d t ( t)

g

8068

8071

81 7880

100

2011

Proportion of respondents (per cent)

68

47 52

22

54

28 2440

602011

2012

1912

22 1724

0

20

Mobile Email Social networking VoIP Mobile instant

2013

Mobile messaging

Email Social networking sites

VoIP Mobile instant messaging

S Of h d t t Q1 f h

59

Source: Ofcom research, data as at Q1 of each year Page 358Figure 5.56

The price of a basket of residential fixedvoice services increased in 2012

£ per month (2012 prices)

1.75 1.44 1.22 1.11 0.91 0.822.36 2.50 2.55 2.60 2.52 2.34

22.44 22.18 21.72 21.69 21.17 21.2720

25

Calls to mobiles

18.33 18.25 17.95 17.98 17.74 18.1110

15 International calls

Fixed access &

0

5

2007 2008 2009 2010 2011 2012

Fixed access & UK geographic calls

2007 2008 2009 2010 2011 2012

S Of / t

-1.2% -1.1% -2.1% -0.1% -2.4% +0.5%Annual change

60


Mobile telecomsMobile telecoms

Smartphone take-up is driving shifts in the mobile market

Number of active mobile subscribers, by pre-pay and post-pay

76 5 80.3 81.2 81.6 82.7100

Connections (millions)

27.4 30.2 33.2 37.1 40.2 43.7

73.8 76.5

60

80

Post-pay

46.4 46.3 47.1 44.0 41.4 39.020

40Pre-pay

02007 2008 2009 2010 2011 2012

62


Most new contracts have a 24-month minimum term

Proportion of sales (%)

68 67 63

2 3 5 7 1326

41 47 5063 69 70 68 70 69 70 67 68 69 72 67

4

60

80

100Other

24 months

13 12 8 5 3 3 3 3 4 7 8 8 10 9 11 13 16 17 18 15 18

72 68 67 63 6050

35 28 2412 6 4 3 3 2 3 2

69 70 70 69 70 67 68 69 72

20

40

60

18 months

12 months

10 15 19 24 24 21 20 21 21 18 17 17 19 18 18 14 14 13 12 12 1413 12 3 3 7 8 8 13 16 17 18 15

0

20

2008 Q

2

Q3

Q4

2009 Q

2

Q3

Q4

2010 Q

2

Q3

Q4

2011 Q2

Q3

Q4

2012 Q

2

Q3

Q4

2013

1 month

Q1

2

Q1

2

Q1

2

Q1

2

Q1

2

Q1

2

63

Source: GfK Retail and Technology UK Ltd Page 374Figure 5.74

ARPU increased slightly as subscribers shifted to post-paid tariffs in 2012

Average revenue per user per month (£)

17.40 17.1516.03 15.47 15.43 15.57

15

20Average revenue per user per month (£)

10

15

0

5

02007 2008 2009 2010 2011 2012

64


Over 25% of mobile users download apps orUse instant messagingg g

Proportion of mobile users using service (per cent)

4047

3640

50

2011

Proportion of mobile users using service (per cent)

28

1712 13

29

19 19

29 26

20

302012

0

10

Web browsing Emailing Downloading apps Instant messaging

2013

65

Source: Ofcom research, data as at Q1 of each year Page 379Figure 5.82

Fixed broadband servicesFixed broadband services

Proportion of homes using mobile broadband fell in the year to Q1 2013y

Household penetration of fixed and mobile broadbandp

100%68% Total broadband take-up75%74%

40%

60%

80% Mobile only

Fixed and mobile

0%

20%

40%

Fixed only


0%2009 2011 2013

67

Source: Ofcom researchPage 358Figure 5.55

There were over a million additional fixed broadband connections in 2012

Total fixed broadband connections (millions)

4 1 4 30.1 0.4 1.117.3 18.2

19.5 20.6 21.7

20

25

Total fixed broadband connections (millions)

3 7 5.5 6.4 7.5 7.9 8.83.4

3.7 3.8 4.0 4.1 4.30.115.6

17.3

10

15Other (inc. FTTx)

Cable

LLU ADSL

8.4 8.1 8.0 7.8 8.1 7.5

3.7

5

10 LLU ADSL

Non-LLU ADSL

02007 2008 2009 2010 2011 2012


68


Take-up of superfast broadband services has doubled since June 2012

205

Connections (millions) Per cent

11 0

15.017.5

15

20

4

5

Superfast connections (left axis)

2 43.3

3.8

2 94.2

5.36.5

8.911.0

5

102

3 (left axis)

Superfast as a % of all

0.1 0.1 0.1 0.2 0.4 0.6 0.9 1.1 1.4 1.9 2.4

0.3 0.4 0.5 0.9 1.82.9

0

5

0

1

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

connections (right axis)

2010

Q Q Q Q

2011

Q Q Q Q

2012

Q Q Q Q

2013

Q

69

Source: Ofcom / operators. Superfast is defined as a package having a headline speed greater than 30Mb/s

Page 323Figure 5.13

Superfast broadband driving home-working

3%100%

Change in use, compared to previous broadband connection

27% 35% 34%45% 46%

3% 3%

80%

100%

Much decreased use

26%28% 34%

46%

40%

60%Slightly decreased use

Use about the same

46%36% 30%

22% 27%

30% 24%

20%

40%Slightly increased use

M h i d30%22% 27%

0%Streaming HD TV programmes films

Streaming TV programmes or films

Uploading to cloud services

Uploading video content

Working from home

Much increased use

70

Source: Ofcom research, 2013

Average price of a fixed broadband connection increased in real terms in 2012

£ per month-13 3% -5 1% -8 9%-11 5% -0 1% +1 1% Annual

20

2513.3% 5.1% 8.9%11.5% 0.1% +1.1% change

£21.17 £18.73 £17.77 £16.20 £16.17 £16.3510

15

£16.20 £16.17 £16.35

0

5

2007 2008 2009 2010 2011 20122007 2008 2009 2010 2011 2012Average actual speed

3.6Mbit/s(November)

4.1Mbit/s(April)

6.2Mbit/s(November)

7.6Mbit/s(November)

12.0Mbit/s(November)

n/a

71


4G4G

30% of smartphone users intend to upgrade to 4G after their contract expirespg p

% of respondents

14%22%

16%

14%

%Strongly agreeSlightly agreeNoneSli htl di

34%

14% Slightly disagreeStrongly disagree

73

Source: Ofcom research, April 2013Page 314Figure 5.4

PostPost

S CSteven Cape,Senior Analyst,Market Intelligence

74

Mail volumes have declined by 5.9%

Volume (million items)

21,587 20,55318,632 17,52720,000

25,000

Total mail17,527

16,657 15,675

17,946

15,48912,528

10,519 9,502 8,44410 000

15,000Royal Mail end-to-end,

3 641 5,064 6,092 6,996 7,147 7,2135,000

10,000 end to end

Total access 3,641

02007 2008 2009 2010 2011 2012


75


But total revenues have risen by 7.2%

Revenue (£m)

6,843 6,764 6,661 6,517 6,7047,185

7,0226 000

8,000

Total mail

6,755 6,6536,522

6,371 6,551,

6,254 5,922 5,601 5,281 5,279 5,569

4,000

6,000Royal Mail total mail

Royal Mail end-to-d

501 731 921 1,090 1,272 1,453

88 112

2,000

end

Royal Mail access

88 112140 142 150 157

02007 2008 2009 2010 2011 2012

Access operators


76

Page 394Figure 6.10

p

Despite increases, the volume of mail delivered by other operators still accountsdelivered by other operators still accounts for less than 0.2% of total volumes

20Volume (million items)

15

11.8 11.38 5

18.0

5

10

8.5

0

5

2009 2010 2011 2012

7777

2009 2010 2011 2012Page 396Figure 6.14Source: Ofcom / operators

The growth in access volumes continues to gslow while its contribution to total mail volumes grows

Proportion of access in total mail volume

Year on year growth rate of access volumes

71.8% 39.1% 20.3% 14.8% 2.2% 0.9%

40%

50%Proportion of access in total mail volume

17%25%

33%40% 43% 46%

10%

20%

30%

17%

0%

10%

2007 2008 2009 2010 2011 2012

78

Page 395Figure 6.12Source: Ofcom / operators

But despite the continued growth in accessBut despite the continued growth in access,the majority of business senders use only Royal Mail

Proportion of respondents (%)

24% 19% 28% 31%

2% 2% 2% 1%

80%

100%Other provider only

% 78%40%

60%

only

Royal Mail + 73% 78% 69% 68%

0%

20%

40% other provider

Royal Mail0%All businesses Administrative only Critical for

communicationsCore to business

operations

Royal Mail only

Role of post in the organisation

79

Source: Ofcom research, Q3 2012-Q2 2013

Role of post in the organisationPage 411Figure 6.27

And the majority of mail received byAnd the majority of mail received by consumers is sent by businesses

90Proportion of respondents (%)

8130

60

4635

1732 26 28 33

0Direct Transactional Catalogues / Subscription Larger Smaller Personal Invitations / mail mail

gbrochures

pmagazines

gparcels parcels letters greetings

cardsBusiness to consumer Parcels Consumer to consumer

8080

Source: Ofcom research, Q3 2012-Q2 2013Page 405Figure 6.22

Questions?Questions?

81