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International Communications Market Report 2012
13 December 2012
Ofcom analyst briefing
0
1
Agenda Introduction to the ICMR and Market Overview James Thickett, Director of Research and Market Intelligence
Trends in the television and audio-visual industries Jonathan Fenn, Senior Media Analyst
Trends in telecoms Chris Adams, Head of Market Intelligence, Telecoms
Internet and web-based content Andrew Jackson, Senior Convergence Analyst
Comparative international pricing Nicholas Collins, Senior Fixed Telecoms Analyst
2
Introduction and Market overview
James Thickett, Director of Research
3
One of three Communications Markets Reports
International Communications Market Report 2012
Research Document
Publication date: 13 December 2012
4
Methodology Combination of industry data (2011) and consumer research data (September 2012) • Industry data (17 countries)
- Telecoms and media industry data: IDATE - Other third-party sources - Pricing: Teligen
• Online consumer research (9 countries, >=1000 consumers in each country) to examine the take-up
and use of communications services. It focused on: - The change in levels of use over the last two years - Preferred methods of communicating - Consumption of Olympic Games content - Consumption of news online - The use of connected devices - Use of, and attitudes towards, postal services
Third-party sources of data: Analysys Mason, comScore, IMRG, Eurostat, Eurodata TV Worldwide, The European Commission, Forrester Research, IDATE, Kantar Media, Mediamétrie, The Nielsen Company, PricewaterhouseCoopers, The Reuters Institute, Teligen, US Census Bureau, the World Advertising Research Centre and Zenith Optimedia.
5
Communications revenues continue to rise Global communications revenue, 2007-2011
Source: Ofcom, PricewaterhouseCoopers; UPU, IDATE and industry data. Postal revenues are for our 17 comparator countries only. CAGRs 2007-2011: Radio -1.2%; Post -0.9%; Television +5.2%; Telecoms +2.9%.
Revenue (£bn)
836 871 885 905 936
211 221 221 242 258 102 103 100 99 98 31 30 28 29 30
£1,180bn £1,226bn £1,234bn £1,275bn £1,322bn
0
200
400
600
800
1,000
1,200
1,400
2007 2008 2009 2010 2011
Radio
Post
Television
Telecoms
6 6
UK ranked seventh in terms of revenue Communications revenues, 2011
71
90
186
12
31
100
14
39
1
3
12
£86
£138
£331
0 50 100 150 200 250 300 350
CHN
JPN
USA
Revenue (£bn)
21
24
36
31
27
36
4
8
12
10
11
12
4
8
7
7
5
1
1
3
2
1
0
£31
£36
£58
£49
£47
£54
0 10 20 30 40 50 60
CAN
ITA
GER
FRA
UK
BRA Telecoms
Television
Post
Radio
Revenue (£bn)
Source: Ofcom, PricewaterhouseCoopers; UPU, IDATE and industry data.
7
Australia highest on a per capita basis Communications sector revenues per capita, 2011
53
134 180
145 471 499
534 411
790 708
629 598
389 437
476 436
63 62
182 198 155
102 244
244 128
320 127
142 155
180
99 136
125
71 108
108 123
96 99
107
26 38
16 10
30 22
34 37
8 37
22 19
£64 £14
£178 £270
£243 £778
£871 £830
£558 £1,135
£1,083 £899
£1,078 £593
£712 £753
£741
£0 £200 £400 £600 £800 £1,000 £1,200 £1,400
CHN IND
RUS BRA POL IRL
SWE NED ESP AUS JPN CAN USA
ITA GER FRA
UK
Telecoms
Television
Post
Radio
Source: Ofcom, PricewaterhouseCoopers; UPU, IDATE and industry data.
58
19
45
15
50
10
55
23
44
20
30
12
64
24
56
24
0%
20%
40%
60%
80%
100%
Smartphone Tablet computer
Perc
enta
ge o
f res
pond
ents
UK France Germany Italy USA Japan Spain Australia
Source: Ofcom consumer research
8
UK smartphone take-up among the highest
Ownership and personal use of smartphones and tablets
8
9
Trends in the television and audio-visual industries
Jonathan Fenn, Senior Media Analyst
Global TV industry revenues increased YoY
10
Source: Ofcom / PWC
£95bn £103bn £111bn £121bn £133bn
£19bn £19bn £19bn £20bn £20bn
£98bn £98bn £91bn £102bn £105bn
0%
20%
40%
60%
80%
100%
2007 2008 2009 2010 2011
Advertising
Public funds
Subscriptions
£211bn £221bn
1.8%
1.4%
9.0%
CAGR (4yr)£258bn£242bn£221bn
YOY
3.5%
-0.2%
10.5%
5.2%6.7%
Pro
porti
on o
f rev
enue
s
TV industry revenues, by source
BRICs closed gap on Japan / Australia
11
Source: IDATE / industry data / Ofcom
£66 £70£76
£83 £86 £85£94
£100
£45 £48 £50 £53 £54 £53 £57 £58
£33 £34 £34 £35 £35 £33 £35 £36
£14 £16 £18 £20 £23 £25 £30£34
£0bn£10bn£20bn£30bn£40bn£50bn£60bn£70bn£80bn£90bn
£100bn£110bn
2004 2005 2006 2007 2008 2009 2010 2011
USA
Europe / Canada
Japan / Australia
BRIC
3.0%
2.0%
6.5%
1.4%
2.9%
5.7%
14.0% 13.8%
Total revenues (£bn)£158bn £168bn £178bn £191bn £197bn £197bn
CAGR (5 yr)YOY
Growth (%)
5.8% 5.1%£216bn £228bn
TV industry revenues among comparator countries
UK remained on a par with Germany as largest TV market in Europe
12
Source: IDATE / industry data / Ofcom
£10.4£10.8 £10.9 £11.0 £11.0 £10.9
£11.2£11.6
£9.3£9.8 £9.8
£10.3 £10.4 £10.4£11.0
£11.3
£7.9 £8.0 £8.2
£9.1 £8.9 £9.2
£9.9 £10.2
£6.2£6.8
£7.1£7.5
£7.9 £7.7£8.0 £7.8
£3.8 £4.1£4.8 £5.0 £5.0
£4.5£5.0 £4.8
£3.2 £3.3 £3.6 £3.7 £3.7 £4.0 £4.1 £4.4
£2.0 £2.1 £2.1 £2.3 £2.4 £2.4 £2.5 £2.6
£0.8 £1.4 £1.5 £1.7 £2.0 £2.0 £2.2 £2.4£1.2 £1.3 £1.4 £1.4 £1.5 £1.5 £1.5 £1.8
£0.5 £0.6 £0.7 £0.8 £0.9 £0.8 £0.9 £0.9£0bn
£2bn
£4bn
£6bn
£8bn
£10bn
£12bn
2004 2005 2006 2007 2008 2009 2010 2011
GER
UK
FRA
ITA
ESP
CAN
NED
POL
SWE
IRE
3.1%
2.6%
2.7%
-2.7%
5.4%
10.4%
5.1%
5.7%
1.6%
-4.9%
YOY CAGR (5 yr)Growth (%)
£45bn £48bn £50bn £53bn £54bn £53bn
Total revenues (£bn)
4.0%
4.4%
1.2%
2.9%
4.6%
1.7%
-0.1%
4.2%
4.6%
9.8%
£57bn £58bn
TV industry revenues among European countries and Canada
All UK TV homes are now digital
13
Source: IDATE / industry data / Ofcom
99% 97%
66%
93% 89% 87%77%
83%
100%
77%67%
90%
62%69%
40% 40% 43%
1% 3%
34%
7% 11% 13%23%
17%
0%
23%33%
10%
38%31%
60% 60% 57%
0%
20%
40%
60%
80%
100%
Analogue
Digital
Proportion of TV homes (%)
+1 +3 +4 +1 +2 +9 +4 +11 +2 +9 +4 +8 +7 +10 +9 +9 +9
Year-on-year change (pp)
Take-up of digital and analogue television, 2011
Appetite for pay TV varies by country
14
Source: IDATE / industry data / Ofcom
55%62% 64%
35%
89% 93%
63%
34%27%
92%
76% 78%
23%
64%
94%
57%
45%38% 36%
65%
11% 7%
37%
66%73%
1%8%
24% 22%
77%
36%
6%
43%
0%
20%
40%
60%
80%
100%
UK FRA GER ITA USA CAN JPN AUS ESP NED SWE IRE POL BRA RUS IND CHI
Free TV
Pay TV
Proportion of TV households (%)
+3 +7 +8 -12 +1 +3 +5 +8 +3 +2 -2 -1 +2 +32 +14 +16 +8YOY change in pay TV homes (%)
Take-up of pay and free-to-air television, end 2011
The UK has one of the highest take-up rates for HDTV
Source: Ofcom consumer research
15
41%
18%
28% 28%
49%
31%
46%
30%35%
0%
10%
20%
30%
40%
50%
60%
70%
UK FRA GER ITA USA JPN AUS ESP CHN
HDTV service
Take-up (%)
Take-up of high definition TV service
Ownership of connected TVs is gathering momentum...
Source: Ofcom consumer research
16
39%
18%21%
19%
32%
24%
29%
22%
15% 15%
10% 9% 10%
5%
10%12%
0%
10%
20%
30%
40%
50%
UK FRA GER ITA USA JPN AUS ESP
DVR Connected or smart TV
Take-up (%)
Take-up of digital video recorders and connected TVs
...whilst widening broadband access is influencing how content is viewed
Source: Ofcom consumer research
17
42%
31%
19%
26%31%
11%
27%
34%
23%
13%9%
12%17%
3%
12%16%
0%
10%
20%
30%
40%
50%
60%
UK FRA GER ITA USA JPN AUS ESP
Ever Weekly
Proportion of respondents that access online TV (%)
Accessing TV content over the internet
However linear TV continues to dominate
Source: Médiamétrie, Eurodata TV Worldwide
18
242227 225
253
293
240
189
239
191162
205
242225 220
119
163
0
50
100
150
200
250
300
UK FRA GER ITA USA CAN AUS ESP NED SWE IRL POL BRA RUS IND CHN
Change in minutes of viewing per person per day, 2010 - 20110.0% 7.1% 0.9% 2.8% 3.5% 4.3% 0.5% 2.1% 0.0% -2.4% 4.6% -1.2% 1.4% -2.7% 0.0% 3.2%
Min
utes
per
per
son
per d
ay
2011 average214 mins
Daily TV viewing per head, 2010 - 2011
19
Internet and web-based content
Andrew Jackson, Senior Convergence Analyst
Mobile internet advertising spend almost doubles in the UK and the US
20
Mobile internet advertising expenditure per head 2007-12
£3.12
£0.75 £0.93
£0.41
£3.18
£1.26
£0.41 £0.30
£1.54
£0.29 £0.03 £0.09 £0.21
£0.00
£0.50
£1.00
£1.50
£2.00
£2.50
£3.00
£3.50
UK FRA GER ITA USA CAN AUS ESP SWE POL BRA RUS CHN
2007 2008 2009 2010 2011
GBP/head GBP/head
0.00
1.00
2.00
3.00
4.00
5.00
6.00
7.00
8.00
9.00
JPN
£7.99
16% YoY Growth 10/11
135% 43% 69% 31% 146% 103% 16% 27% 40% 83% 49% 86% 113%
Source: PricewaterhouseCoopers Global Entertainment and Media Outlook: 2012-2016
Wired internet advertising spend is highest in the UK at £76 per head
21
Total wired internet advertising expenditure, per head 2007-12
£76
£29
£43
£17
£63
£51 £58
£73
£17
£54
£63
£25
£11 £3 £6 £4
0
10
20
30
40
50
60
70
80
UK FRA GER ITA USA CAN JPN AUS ESP NED SWE IRL POL BRA RUS CHN
2007 2008 2009 2010 2011 Internet advertising spend per head (GBP)
YoY Growth 10/11
16% 11% 12% 15% 21% 22% 6% 7% 12% 8% 13% 22% 25% 15% 56% 48%
Source: PricewaterhouseCoopers Global Entertainment and Media Outlook: 2012-2016
Within Europe, UK internet users are using connected devices the most…
22
Proportion of website traffic using mobile, tablet, and other connected devices (%)
Source: comScore Device Essentials, June 2012
16.4
5.0 7.0
5.6
9.7 9.0 9.2
2.2
10.4 11.5
0
10
20
UK FRA GER ITA ESP NED SWE POL RUS IRE
… and time spent online on a laptop or desktop computer has declined as a result
23
Average number of minutes spent online on a laptop or desktop computer per week
307
279
294
188
323
0
311
237
344
291 32
9
200
357
291 34
5
255 33
3
297
302
208
323
292
394
233
0
100
200
300
400
500
UK FRA GER ITA USA JPN AUS ESP
2010 2011 2012 Minutes online per week
Source: Nielsen, August 2012
2012 YoY Change -3.1% +2.2% -8.2% +4.1% -9.4% +0.2% +14.1% -8.5%
Google leads search in all countries except Japan
24
Active reach of search engine brands, by country
85 87 82
87 78
61
87 90
48
34
22
40
62
85
50 44
61 61
36 45
57
36
67 67
0
20
40
60
80
100
UK FRA GER ITA USA JPN AUS ESP
Active Reach (%) Google Yahoo! MSN/WindowsLive/Bing
Source: Nielsen, August 2012
Facebook is the largest international social network across our comparator nations
25
67 68 59
71 69
28
68 68
17 9 5 8
15 23
13 18
9 9 8 8 10 14 12
0
20
40
60
80
UK FRA GER ITA USA JPN AUS ESP
Facebook Twitter Google +
Source: Nielsen, August 2012, home and work panel, including applications Note: Data unavailable for Google+ in Japan.
Active reach of Facebook, Twitter and Google+ on laptop and desktop computers
Active reach (%)
NA
YouTube leads online video websites despite some domestic competition
4% 6%
63% 5% 5%
60% 11%
18% 51%
5% 10%
56% 5% 5%
57% 7%
9% 50%
13% 20%
58% 6%
15% 55%
0% 25% 50% 75%
Rojadirecta
YouTube
Dailymotion
FC2 Videos
YouTube
Netflix
Rai TV
YouTube
MyVideo
WAT
YouTube
BBC iPlayer
ES
P
AU
S
JPN
U
SA
IT
A
GE
R
FRA
U
K
Active reach (%)
26
Top three online video websites among laptop and desktop users
Source: Nielsen, August 2012, home and work panel, applications included
£76
£66
£49
£5
£17
£0
£10
£20
£30
£40
£50
£60
£70
£80
POL BRA RUS IND CHN
UK internet users spent more than £1000 online in 2011
27
Value of B2C e-commerce per head 2007-11
Source: IMRG B2C Global e-Commerce Overview 2011 Update 01, June 2011; IMRG B2C Global e-Commerce Overview 2012, May 2012
Value per head (£)
£1,083
£497 £377
£115
£620
£350
£527
£842
£169
£462
£747 £683
£0
£200
£400
£600
£800
£1,000
£1,200
UK FRA GER ITA USA CAN JPN AUS ESP NED SWE IRL
2007 2008 2009 2010 2011
YoY Growth 14% 21% 18% 19% 9% 10% 16% 26% 24% 9% 12% 24% 29% 19% 33% 32% 129%
28
Trends in telecoms
Chris Adams, Head of Market Intelligence, Telecoms
29
Source: IDATE / industry data / Ofcom
211 206 197 179 166 154
292 318 333 342 357 375
48 57 63 70 75 81 551
580 593 591 598 610
0
200
400
600
2006 2007 2008 2009 2010 2011
Revenue (£bn)
Total
Fixed broadband
Mobile
Fixed voice
Total retail telecoms service revenues increased
UK had third highest telecoms service retail revenues in Europe
Source: IDATE / industry data / Ofcom
11 9 11 6
16 11 9 7 6 5 3 2 2 1 1 1 2 1
14 15 16
18
20
20 13
13 12 12
4 5 2 2 1 1 3 4
2 3 3 8
3 5
3 4
2 3
1 2 1 1 0 0
0 1
27 27 29 31
39 36
25 24 20 19
8 9 4 5
2 2 6 6
0
10
20
30
40
2006
2011
2006
2011
2006
2011
2006
2011
2006
2011
2006
2011
2006
2011
2006
2011
2006
2011
Fixed broadband Mobile Fixed voice
UK FRA GER ITA ESP NED SWE IRL POL
Revenue (£bn)
31
154 103
198 108
927 72
124 89
68
30 10
28 234
116 113
191 82
512 0
83 44
64 21 18
7 15
181 158 173
0 200 400 600 800 1,000
UK FRA GER
ITA USA CAN JPN AUS ESP NED SWE
IRL POL BRA RUS CHN
Bn mins
2006 2011 Source: IDATE / industry data / Ofcom
Only France saw increasing fixed-line voice volumes in 2011
32
1
2
1
1
1
2
4
1
0
5
3
0
0
5
9
4
9
14
0
16
12
6
21
12
5
5
0 5 10 15 20 25
UK FRA GER
ITA USA CAN JPN AUS ESP NED SWE
IRL POL
% share
2006 2011 Source: IDATE
VoIP share of fixed revenues increased
33
5 year percentage point change 59
58
47
64
65
69
67
61
56
61
73
39
52
48
48
0
61
55
51
50
50
58
0 20 40 60 80
UK
FRA
GER
ITA
JPN
AUS
ESP
NED
SWE
IRL
POL
Market share (per cent)
2006 2011
-20
-5
1
-15
n/a
-8
-12
-10
-6
-11
-15
Source: IDATE / industry data / Ofcom
UK saw the largest fall in incumbent’s share of fixed voice volumes: 2006 to 2011
34
2 3 3
3 16
2 12
1 2
1 1
0 0
3 8
5 4
30 4
18 2
3 2
1 0 1
0 10 20 30
UK FRA GER
ITA USA CAN JPN AUS ESP NED SWE
IRL POL
£bn
2006 2011
5 year CAGR 6.3%
19.5%
9.8%
9.0%
12.9%
10.3%
8.9%
13.8%
7.5%
9.3%
3.0%
14.2%
6.1%
Source: IDATE / industry data / Ofcom
Fixed broadband revenues grew…
35
19
22
17
21
20
23
31
17
25
33
28
12
19
27
55
32
36
37
37
48
34
40
50
40
25
37
0 10 20 30 40 50 60
UK FRA GER
ITA USA CAN JPN AUS ESP NED SWE
IRL POL
% share
2006 2011 Source: IDATE / industry data / Ofcom
..and is increasing % of total fixed revenues
36
64
82
73
88
49
61
69
75
82
63
76
69
78
68
86
68
80
49
52
74
74
77
78
74
85
57
0 20 40 60 80 100
UK FRA GER
ITA USA CAN JPN AUS ESP NED SWE
IRL POL
% share
2006 2011 Source: IDATE / industry data / Ofcom
UK saw an increase in retail connection share for three largest fixed broadband providers
37
100
99
95
99
97
100
99
97
72
65
39
61
11
61
100
51
36
37
0 20 40 60 80 100
UK
FRA
GER
ITA
ESP
NED
SWE
IRL
POL
Household coverage (per cent)
Fixed broadband Superfast broadband Source: European Commission / Ofcom
UK no longer lagging on superfast availability
38
25 6
36 13
49 30
94 2
56 68
70 4
8
46 34
48 0
72 70
58 29
40 91
40 60
25
0 20 40 60 80 100
UK FRA GER
ITA USA CAN JPN AUS ESP NED SWE
IRL POL
FTTx Cable
Source: Analysys Mason, FTTX rollout and CAPEX in developed economies, forecasts 2012-2017 / Ofcom
Availability of FTTx and cable networks, end 2011
Japan still leading on availability of FTTx
UK leads on >8Mbit/s connections
39
1 15
23 12
58 15
10 19
3 2
11 26
27 31
46 69
10 27
28 56
36 38
61 50
67 51
23 17
25 53
45 17
39 39
29 20
5 3
8 3
7 5
17 7
22 21
0 4
0% 20% 40% 60% 80% 100%
UK FRA GER
ITA USA CAN AUS ESP NED SWE
IRL POL
% share
2Mbit/s or less >2Mbit/s up to and including 8Mbit/s
>8Mbit/s up to and excluding 30Mbit/s 30Mbit/s or higher Source: Ofcom / IDATE
Proportion of fixed broadband connections by headline speed
40
5 year CAGR
7.0% 2.4%
13.4% 11.8%
5.0% 8.9% 3.7%
14.2% 4.1% 3.5%
12.9% 9.3%
19.4% 38.3% 29.5% 41.1% 22.7%
Source: IDATE / industry data / Ofcom
358 310
64 11
23 25
71 86
145 141
136 107 106
124
277 98
61 26
7 13
21 58
44 121
92
78 57
94 88
0 100 200 300 400
CHN IND
RUS BRA POL IRL
SWE NED ESP AUS JPN CAN USA
ITA GER FRA
UK
2006 2011
Mobile volume growth exceeded fixed but UK and Japan saw declines in 2011
Bn mins
41
5 year CAGR
0
10
20
30
40
50
60
2006 2007 2008 2009 2010 2011
JPN
CAN
AUS
USA
FRA
NED
ESP
UK
£ per month
-6.5%
0.4%
0.5%
-0.9%
-3.4%
-0.4%
-4.8%
-1.9%
Average monthly revenue per mobile connection
Source: IDATE / industry data / Ofcom
Most countries experienced downward pressure on average monthly mobile revenue
Texting remains popular: UK one of leaders sending 200 SMS messages per month in 2011
42
0
200
400
600
2006 2007 2008 2009 2010 2011
USA
IRL
UK
CAN
FRA
SWE
Number of SMS sent per person per month
Source: IDATE / industry data / Ofcom.
43
0
100
200
300
400
500
2009 2010 2011
UK
JPN
CAN
FRA
USA
AUS
MB per month per connection
Source: Cisco Systems’ Visual Networking Index
Mobile data traffic highest in the UK
44
Comparative international pricing
Nicholas Collins, Senior Fixed Telecoms Analyst
45
Our international report focuses on comparative pricing
International Communications Market Report • Compares the price of services in the UK, France, Germany, Italy, Spain and the US
• Based on a pricing model provided by Teligen and data collated in July 2012
Consumer Experience Report • Covers trends in UK fixed, mobile and television pricing • Uses a wide range of sources including the Teligen pricing model, tariff analysis and data submitted to Ofcom by communications providers
Due to be published in January 2013
Basket Household type Fixed voice
Mobile voice SMS Fixed line
broadband Mobile
broadband Television
1 Basic needs An elderly couple with basic needs Low Low n/a n/a n/a Basic
2 Late adopters Two adults with basic needs and fixed broadband
Medium Low Low Low n/a Basic
3 Mobile-only A single occupant mobile ‘power user’ n/a High High n/a High Pay-TV
4 Connected family
A family of two parents and two teenage children with multiple needs
High Medium High Medium n/a Pay-TV with PVR
5 Sophisticated couple
An affluent two person household Low High Medium High use
superfast Medium
HD premium
pay-TV with PVR
46
Source: Ofcom
Summary of households and baskets used in the analysis
Benchmarking analysis across five baskets
47
Source: Ofcom, using data supplied by Teligen
Standalone ‘weighted average’ fixed-line voice pricing
Monthly cost (£)
18 19 24 23 27 27 26 29 26 28 24 25 21 20
32 32 15 36 33 40 32 32 33 33
22 21
39 38
16
38 38 48
34 34 38 37 22 23
27 25
11
30 30
37
31 31 29 29
0
50
100
150
2011
2012
2011
2012
2011
2012
2011
2012
2011
2012
2011
2012
Basket 5
Basket 4
Basket 2
Basket 1
UK GER FRA ESP ITA USA
UK is the cheapest on fixed-line voice
48
Source: Ofcom, using data supplied by Teligen
Standalone ‘weighted average’ mobile pricing Monthly cost (£)
9 9
13 12
12 10
15 15
16 15
26 27
10 10
15 12
18 14
18 15
18 18
30 31
10 10
16 11
26 15
12 15
20 21
17 32
11 10
16 11
28 18
12 16
21 21
18 33
17 16
24 17
56 37
41 36
41 35
46 43
19 18
27 20
50 37
23 31
38 41
53 49
35 43
59 43
82 68
62 53
86 80
95 96
40 53
78 56
115 81
81 64
118 105
118 114
54 55
85 68
145 142
89 73
123 109
103 99
0 200 400 600 2011 2012
2011 2012
2011 2012
2011 2012
2011 2012
2011 2012
Connection 1
Connection 2
Connection 3
Connection 4
Connection 5
Connection 6
Connection 7
Connection 8
Connection 9
UK
GER
FRA
ESP
ITA
USA
Overall weighted average mobile prices Were up by 10% in 2012
49
Source: Ofcom, using data supplied by Teligen
Standalone ‘weighted average’ fixed-line broadband pricing Monthly cost (£)
17 16 18 20 29 31 33 25 47 44 30 28
19 15 18 20 31 35 46
30
48 44 40 32 24 18
34 31 19 21
46
30
62 48
105
64
0
50
100
150
200
2011
2012
2011
2012
2011
2012
2011
2012
2011
2012
2011
2012
Basket 5
Basket 4
Basket 2
UK GER FRA ESP ITA USA
Standalone fixed broadband prices fell in 2012
50
Source: Ofcom, using data supplied by Teligen
Standalone ‘best offer’ mobile broadband pricing
Monthly cost (£)
16 15 28 19 24 23
10 10 22 38 50 41 15 15
19 17
24 23
10 9
22
38 41
31
7 6
12 10
15 14
5 8
16
21 22
22
0
20
40
60
80
100
120
2011
2012
2011
2012
2011
2012
2011
2012
2011
2012
2011
2012
1GB per month
3GB per month (Basket 5)
5GB per month (Basket 3)
UK GER FRA ESP ITA USA
UK close behind Italy on mobile broadband pricing
51
Source: Ofcom, using data supplied by Teligen
Standalone ‘best offer’ TV pricing
Monthly cost (£)
14 11 13 20 21 21 14 24 19 21 24 24
62 61 38
42 34 34 45 47 62 65 69 70
12 12
10 10 18 18 10
10
0
20
40
60
80
100
2011
2012
2011
2012
2011
2012
2011
2012
2011
2012
2011
2012
Licence fee
HD premium pay-TV with recorder
Basic pay-TV
UK GER FRA ESP ITA USA
UK cheapest for basic pay-TV; HD sport and movies attracts a relative premium
52
Source: Ofcom using data supplied by Teligen
Change in the standalone pricing of basket components
UK FRA GER ITA ESP USA
Fixed voice -0.7% -2.1% 90.6% 22.4% 1.9% -1.1%
Mobile 10.4% -25.2% -20.5% -9.7% -7.6% 3.5%
Fixed broadband -16.7% 4.3% 10.4% -30.5% -13.5% -29.0%
Mobile broadband -4.2% -23.4% -5.3% -3.7% 75.0% -20.4%
TV -5.6% -1.3% 13.9% 12.3% 5.3% 0.3%
Pricing trends generally remain negative across the sector
UK has lowest ‘weighted average’ across all five household types...
53
‘Weighted average’ single service basket prices Monthly cost (£)
50
57
69
70
57 80
68 85 11
6 10
7 11
3 12
4
100 12
2 21
2 12
8 168
169
146 17
8 26
2 24
7 268 31
4
200
207 24
4 22
9 32
8 373
0
100
200
300
400
UK
FR
A
GE
R
ITA
E
SP
U
SA
UK
FR
A
GE
R
ITA
E
SP
U
SA
UK
FR
A
GE
R
ITA
E
SP
U
SA
UK
FR
A
GE
R
ITA
E
SP
U
SA
UK
FR
A
GE
R
ITA
E
SP
U
SA
Fixed voice Mobile Fixed broadband Mobile broadband Pay TV TV licence TV hardware
Basic needs Late adopters Mobile power user Connected Family Sophisticated couple
Source: Ofcom, using data supplied by Teligen
45
54
62
57
47 62
53 66
71
65
73 87
84 10
8 18
5 10
2 16
3 14
6
112
94
186
120
187 22
4
164
168 19
7 17
1 30
0 31
2
0
100
200
300
UK
FR
A
GE
R
ITA
E
SP
U
SA
UK
FR
A
GE
R
ITA
E
SP
U
SA
UK
FR
A
GE
R
ITA
E
SP
U
SA
UK
FR
A
GE
R
ITA
E
SP
U
SA
UK
FR
A
GE
R
ITA
E
SP
U
SA
Fixed voice, broadband, pay-TV and mobile access Fixed voice, broadband & pay-TV access Fixed voice, broadband & mobile access Fixed voice & broadband access Fixed voice Mobile Fixed broadband Mobile broadband Pay TV TV licence TV hardware
54
‘Best-offer’, including multi-play, basket prices Monthly cost (£)
Basic needs Late adopters Mobile power user Connected Family Sophisticated couple
..and the lowest possible prices for four of the five household types
Source: Ofcom, using data supplied by Teligen
The UK price differential with other countries is narrowing
55
Source: Ofcom / Teligen
Percentage that the next cheapest country is more expensive than the UK for the ‘weighted average’ basket prices
Difference (per cent)
21.9
30.3
41.1
51.9
27.3
12.8
25.7 21.9 22.0
3.4 0
10
20
30
40
50
60
Basic needs Late adopters Mobile power user Connected Family Sophisticated couple
2011
2012
Questions
56