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5.1 Key market developments in telecoms

5.1.1 UK telecoms industry: key metrics

Source: Ofcom / operators

5.1.2 Introduction

As the data above indicate, the size of the UK telecoms industry, in terms of revenues, connections and usage, has continued to increase, despite high mobile penetration and a decreasing number of fixed lines.

In this section, we focus on five key themes that highlight how industry developments may be affecting user behaviour and re-defining the relationship between fixed and mobile markets.

• Mobiles in the home. We look at the relationship between fixed and mobile consumption in the voice market, and find that although 70% of mobile users use their mobile phone to make calls within the home, fixed-line use remains resilient; 60% of outbound call volumes were from fixed lines in 2007, and 88% of households have a fixed line.
• The value of flat-rate pricing. We examine the rise of ‘all-you-can-eat’ tariffs in fixed-line and mobile. We find that only 16% of pay-monthly mobile users claim to usually exceed their inclusive minutes, and that this ‘flat rate pricing’ has enabled operators to maintain average revenues per user.
• Broadband on the move. In the past year mobile operators have focused on the broadband supply market with USB dongle-based consumer services. We find that two-thirds of mobile broadband users also have a fixed-line connection, and look at the relationship between fixed and mobile broadband.
• UK moves towards super-fast broadband network. Virgin Media is in the process of upgrading most of its cable network to offer speeds of up to 50 Mbit/s, and in July 2008 BT announced plans for the roll-out of fibre-based broadband to up to 10 million homes by 2012. We review these developments and other next-generation access initiatives.
• The continued growth of text messaging. We identify some of the factors behind the increasing use of SMS, which is used by more UK consumers than the internet.

The two following sections combine data sourced from operators with consumer research to examine trends in the sector, first from an industry, and then from a user perspective.

• Telecoms [pdf]
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