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This is Ofcom’s second annual review of telecoms, television and radio markets across the nations and regions of the UK. In it we aim to present the most comprehensive picture possible of trends in these markets, in order to establish the context for policy decisions by Ofcom and other types of decisions by other public and private sector organisations.

Last year’s report concluded that differences in the availability, take-up and consumption of communications services across the UK could be explained by whether an individual lives in a rural or urban location, their age and socio-economic profile and attitudes towards communications technology. It pointed to significant gaps in the availability of communications services in areas with larger rural populations such as Northern Ireland, Wales, Scotland and the South West. Take-up of services was lower in rural areas and in locations with a higher proportion of C2DEs - Wales, Scotland, Yorkshire & the Humber, the North East and Northern Ireland. We also found that age was a key influence on adoption of mobile phones and the internet.

This year’s report shows that the gap between ‘leaders’ and ‘laggards’ on key indicators has narrowed over the period, with availability and take-up in rural areas closing on urban conurbations. For instance, the gap between the parts of the UK with the lowest and highest internet penetration narrowed from 16 to 13 percentage points. A similar reduction was seen for broadband internet access where the gap fell from 17 to 7 percentage points. Moreover, a 19 percentage point gap in 2005 DTV penetration by nation and region had narrowed to 13 percentage points in 2006. The impact of age also appeared to be less of a differentiating factor in 2006, with increased use in mobile phone use driven by enhanced take-up of mobile telephony among consumers aged over 45.

Following the 2006 report and recognising the importance of the rural/urban divide, stakeholders asked us to commission a programme of research to help improve our understanding of the challenges faced by people living in rural parts of the UK. Research was conducted in early 2007 to examine the take-up of, and demand for, communications services in rural areas of the UK. It confirms last year’s findings that take-up of certain communications services (notably digital television, broadband and 3G mobile) is lower in rural areas. However, among those yet to acquire these technologies, only a small minority have been prevented from doing so by lack of availability.

In other areas, this report adopts the approach of the 2006 report, once again drawing on the latest operator data, research findings from Ofcom’s communications tracking survey and industry data from BARB and RAJAR. This allows us to provide a comprehensive statistical digest of availability, take-up and consumption of communications services throughout the UK. Wherever possible, these sources have been used to provide the most up-to-date industry metrics. In the case of digital television penetration and broadband take-up, however, this report relies on 2006 average figures (because this allows for robust regional analysis), rather than using Ofcom’s latest published figures.

Two enhancements have also been introduced this year.

The first involves research on issues specific to individual nations that were identified or highlighted as requiring further investigation in the 2006 report. These issues are:

• inadvertent roaming by mobile users in Northern Ireland on to networks in the Republic of Ireland;
• overlap television viewing in Wales, whereby viewers in border areas can only receive (or only choose to watch) television services broadcast from England;
• the availability of communications services in rural Scotland; and
• an in-depth examination of minority ethnic consumer behaviour towards communications services in England.

The second innovation is that the report provides an industry overview for each nation – highlighting, for example, the scale of investment made by the BBC and ITV1 in nations and regions television output and their hours of broadcast output.

The report is divided into five sections:

• Section 1 summarises the report’s main findings;
• Section 2 offers a comprehensive analysis of communications markets across the UK’s four nations starting with, by way of background, a short socio-demographic and economic portrait of the four nations. It goes on to examine recent communications market developments, before summarising the results of the research that has been commissioned for this report. It concludes with a comparative analysis of communications markets in each nation; and
• Sections 3 to 5 provide in-depth analyses of the television, radio and telecommunications markets across the four nations.

This report forms the first of Ofcom’s three 2007 publications examining different aspects of the UK’s communications markets. The Communications Market 2007, to be published in the summer, will consider the UK-wide market in depth and The International Communications Market report, to be published around Christmas, will make comparisons between the UK and overseas markets.

We would welcome any comments and feedback that you might have on this report. Please email Ofcom’s Market Intelligence Team on market.intelligence@ofcom.org.uk.

Ed Richards
Chief Executive

• 1 - Foreword & Summary [pdf]
• 2 - Communications Markets across the United Kingdom [pdf]
• 3 - Television [pdf]
• 4 - Radio [pdf]
• 5 - Telecoms [pdf]
• Annexes [pdf]

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