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Chris Taylor, Ofcom, Consumer presentation

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The Communications Review Consumer ‘themes’ Chris Taylor Director of Consumer Policy 4 July 2012
Transcript

The Communications ReviewConsumer ‘themes’

Chris Taylor

Director of Consumer Policy4 July 2012

2

Contents

1 Relevant trends and developments

2 What might we expect in the future, how it could affect consumers and questions for the regulatory framework

3

1. Relevant trends and developments

A growing number of consumers are placing increasing demands on communications services

4

Video footage

5

Fewer people own fixed lines but they benefit from greater competition

Household phone ownership Household use of providers

Change between 2006-2011

Fixed voice

2006 2011 2006 2011

Figure 28 and 9 in the Consumer Experience Research Report

6

Connection methods/home ownership

Change between 2006-2011

Use of internet

75

61

Internet Consumers changing the way they access the internet

20062006

2011 2011

Figure 40 and 46 in the Consumer Experience Research Report

7

80

Length of new contract connections

Smartphones driving shift towards longer mobile contracts

Mobile

2006 2011 2006 2011

38% mobile customers own a smartphone

Figure 15, 19, 20, and 21 in the Consumer Experience Research Report

8

Fixed voice Mobile Fixed bb Pay TV

Current purchasing behaviour

Over half purchase now bundle services together with fixed voice most popular

Bundling

2006 2011

Figure 64 and 68 in the Consumer Experience Research Report

9

Consumers are getting more for less

27.97 26.13 24.76 23.48 22.52 22.27

37.20 36.63 36.26 34.87 33.02 31.34

10.39 11.01 9.91 10.22 10.38 9.48

28.24 27.75 27.85 27.28 27.95 27.97

2.69 2.70 2.72 2.57 2.54 2.54

£106.50 £104.22 £101.49 £98.41 £96.42 £93.61

4.78% 4.77% 4.74% 4.66% 4.63% 4.66%

0%

2%

4%

6%

0

50

100

150

2005 2006 2007 2008 2009 2010

As % of total spend

£ per month (2010 prices)

Total Radio

Television Fixed internet

Mobile services As a %age of total household spend

but spending less Consumers are making more use of services

Average monthly spend on communications services is decreasing

10

2. What might we expect in the future, how it could affect consumers and questions for the regulatory framework

Possible future developments 1

11

Increased industry focus on retention of ‘high end’ customers

Development Implication for Consumers and Citizens

Regulatory questions

More bundles and tie-ins

Targeted customer retention and price discrimination in favour of engaged consumers

Impact on competition?

Future proof framework for switching, removal of asymmetries and equivalent treatment of bundle components

Need for good consumer information

More innovation and new services, including ‘over-the-top’

Increased choice and diversity of services

Regulated and unregulated services interchangeable

New capabilities for social media, commerce, entertainment etc

Dis-engaged consumers get left behind…….falling volumes and rising prices on legacy platforms

Jurisdictional questions on protection of UK consumers

Asymmetry of regulation

Privacy and data protection issues

Data porting

The ‘open Internet’

Platform migration and de-commissioning

Protection of vulnerable consumers

Possible future developments 2

12

Government, healthcare and education portals online become main channels for delivery of services. Likewise, the Internet the predominant platform for commerce and retail.

Development Implication for Consumers and Citizens

Regulatory questions

Digital participation becomes essential Re-setting of definition of ‘essential service’ and universal service

Stronger need to drive digital participation

Current asymmetry of inclusion requirements between fixed voice and other services is probably not future proof

New electronic payment methods Convenience of transactions, more choice of payment methods

Establishing the right regulatory boundaries, transparency and joined up consumer protection for electronic payments (‘micropayments’)

We know………

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…..that markets in the future will work better if consumers are empowered and protected, and society will be better off if no citizens are excluded from the benefits of electronic communications technologies and services.

Thank you

14


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