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
Source: Ofcom research
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
Returning to the living room…
15
Returning to the living room…
16
Returning to the living room…
17
Returning to the living room…
18
…but bringing devices with us
19
…but bringing devices with us
20
…but bringing devices with us
21
…but bringing devices with us
22
…but bringing devices with us
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
Source: Ofcom / operatorsPage 356Figure 5.53
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
Source: Ofcom / operatorsPage 336Figure 5.29
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
Source: Ofcom / operatorsPage 360Figure 5.58
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
Source: Ofcom / operators Page 346Figure 5.42
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
Source: Ofcom / operators Page 341Figure 5.36
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
Source: Ofcom research
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
Source: Ofcom / operators
68
Source: Ofcom / operatorsPage 339Figure 5.33
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
Source: Ofcom / operatorsPage 365Figure 5.64
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
Source: Ofcom / operators
75
Source: Ofcom / operators Page 394Figure 6.11
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
Source: Ofcom / 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