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Consumers’ use of fixed telecoms services: summary of Oftel residential survey Q4 February 2001 |
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Chapter 1 Introduction Chapter 2 Summary findings Chapter 3 Main findings Chapter 4 Customer rating of fixed phone services Chapter 5 Impact of mobile phones on the calling behaviour from fixed home phones Chapter 6 Conclusions 1.1 This report provides an overview of the key findings of consumer behaviour in the fixed telecoms services market, taken from the fourth quarter 2000/01 of Oftel’s quarterly residential consumer survey conducted in February 2001. Results from previous quarters (May, August, November 2000) are used for comparison purposes where appropriate and referred to throughout this report. 1.2 The report provides trend information on which subsequent quarterly results can be compared and examines differences between consumers with different social characteristics. 1.3 The survey was conducted for Oftel by MORI amongst 2073 UK adults (see note 1) during February 2001, of whom 93% claimed to have a fixed line at home. Additional research was conducted by Ipsos-RSL during April 2001, amongst 2072 GB adults, examining their use of fixed phone services, results from which are also contained in this report. The report has been prepared by Oftel (see note 2), based on the results provided by MORI and Ipsos-RSL. 1.4 This report covers:
1.5 Issues addressed in recent quarters include:
Notes to chapter 1 1 This survey was conducted amongst a representative sample of UK adults, reflecting the UK profile of sex, age, social grade, region and employment status. Data has also been weighted to ensure the sample is representative of the UK adult population. All data shown is weighted data. Unweighted base sizes are shown on charts and tables to show the number of people who were asked the question. Because the survey was conducted amongst a sample of adults, rather than the whole population, the data may be subject to a small margin of error. The error margin for this total sample of 2073 consumers is about 1-2%, but is higher amongst smaller subgroups. 2 The report should not be seen as recommended best buys and should not therefore be relied upon when making purchase decisions. Oftel has conducted its own checks on the data in this report and whilst we consider it to be correct, Oftel accepts no liability in respect of any of the results provided to it by MORI or Ipsos-RSL or any decisions taken by any person in reliance on the report.
Use of fixed line phones at home 2.1 There has been little change since May in the proportion of UK homes with a fixed line phone service at 93%. As reported in previous quarters, this has been consistently lower than the most recent data from the Office for National Statistics (1999), which reported penetration of fixed lines virtually static at around 95% between 1997 and 1999. The apparent drop since 1999, seems to be due primarily to the increasing popularity and affordability of mobiles. Oftel’s latest Market Information data (September 2000) also reported a drop for the first time in the number of residential fixed lines. 2.2 Three-quarters of UK adults consider their fixed phone at home their main means of making and receiving calls, whilst 16% of all UK adults considered their mobile phone their main telecoms service. 2.3 7% of homes do not have a fixed line phone - 5% used a mobile, and 2% had neither fixed nor mobile. The proportion of homes using only fixed phones continues to drop, now less than a quarter. The vast majority of homes (70%) have both fixed and mobile phones. Use of fixed line suppliers 2.4 There has been little change since August in use of fixed line suppliers, with 8% of UK homes claiming to use more than one fixed supplier, and a further 1 in 5 using a sole alternative to BT. Figure 2a Use of fixed telecoms suppliers – UK homes with fixed phone service, Feb 01
2.5 10% of homes had changed their fixed telecoms supplier in the last 12 months – just over half of these homes kept their original phone number. A significant proportion of customers who changed their number said they had been told they had to by their new supplier, although lack of awareness of number portability and perceptions of expense or inconvenience involved were also mentioned. Awareness of information comparison sources 2.6 Fewer than 1 in 10 consumers had seen or heard of the phonebills comparison (www.phonebills.org.uk) and the performance indicators (CPIs) websites, produced by the telecoms industry. Just less than 1 in 5 consumers thought they would be likely to use a website offering independent telecoms information and advice. Price comparisons were the most frequently mentioned information that consumers would like to see such a site contain. Rating of fixed line telecoms services 2.7 90% of fixed line customers rated their service as good, very good or excellent. This was slightly higher than ratings for mobile and Internet services (82% and 80% respectively). 70% of customers considered their fixed phone service as good/very good/excellent value for money (broadly similar to ratings for mobile value for money). Satisfaction with complaint handling 2.8 A quarter of UK consumers had complained to one of their telecoms suppliers. Only half were satisfied with the way in which their complaint had been handled, primarily because of unsatisfactory resolution of the initial problem. Key areas for improvement include keeping the customer informed of progress, meeting promises made to the customer, making it easier for customers to get hold of an appropriate person to deal with their complaint, and resolving the complaint within an reasonable period of time. 2.9 Whilst a quarter of consumers said they would contact Oftel if they were dissatisfied with the outcome of their complaint, half of consumers were unaware of who to contact, or said they would not contact anyone apart from their telecoms supplier. Fixed and mobile usage 2.10 There has been little change since August in the proportion of consumers (68%) selecting their mobile rather than their fixed phone in a variety of situations, the most common being when the fixed phone was being used by someone else. 1 in 5 consumers with both fixed and mobile phones said that people now call them more on their mobile and less on their fixed phone. 2.11 From the caller’s point of view however, almost half of consumers remain confused over identification of mobile numbers and only a fifth said they know roughly how much it costs to call a mobile number from their fixed phone. 2 in 5 consumers said if they know it’s a mobile number they’re calling they tend to keep the call shorter than if they were calling a fixed phone, and a third of consumers said they were less likely to call a mobile number because of the call cost.
Fixed telecoms usage in UK homes 3.1 During February, 93% of UK homes interviewed claimed to have a fixed line phone. Of the remaining 7% without a fixed phone, the majority (8 in 10) were using mobiles instead, which equates to just over 5% mobile-only homes in the UK, and 2% with neither fixed nor mobile. This can be seen in figure 3a below. Figure 3a Penetration of fixed and mobile telephony in UK homes
Base: UK homes, Feb ’01 (Base: 2073, 1% ‘don’t knows’ have been excluded) Note – rounding of data results in occasional months showing totals of 101% 3.2 There has been little change since May 2000 in the proportion of UK homes with a fixed line service at about 93%. These figures have been consistently lower than the most recent data from the Office for National Statistics which reported penetration of fixed lines virtually static at around 95% between 1997 and 1999. According to Oftel research, penetration certainly appears to have fallen since 1999 and has remained stable at about 93%, due primarily to the increasing popularity and affordability of mobiles. Oftel’s latest Market Information data (September 2000) has reported for the first time a drop in the number of residential fixed lines. Main method of making and receiving calls 3.3 Consumers were asked what they considered to be their main method of making and receiving calls, and how satisfied they were with this main method. The results are shown in figure 3b. 3.4 Three-quarters of residential consumers consider their fixed home phone to be their main method of making and receiving calls. 16% of all residential consumers, consider their mobile to be their main method of making and receiving calls. 7 in 10 of these consumers who considered mobiles their main telephony service also had a fixed phone at home. 3.5 Mobile as main telephony service was most popular amongst younger (15-34) consumers (33%) and to a lesser extent those living in larger households. Just over 90% were satisfied with mobiles as their main telecoms service, which was slightly lower than satisfaction with fixed services both at home and work. Figure 3b % UK consumers using and satisfied with their main method of telephony
Base: UK residential consumers, Feb ’01 (Base: 2073) Consumers’ use of fixed telecoms operators 3.8 8% of fixed line homes claim to be using more than one supplier for their calls and other home telecoms services – this comprised about 7% using BT and another supplier, and 1% using two or more non-BT suppliers only. 20% were using a sole alternative to BT (figure 3c). Almost 1 in 10 homes (8%) were using a range of ‘other’ suppliers in addition to or instead of BT or cable. Aside from Kingston Communications, these included Eurobell, NTL/Cable and Wireless indirect services, other indirect suppliers such as LocalTel/World Online, British Gas, Powergen, OneTel, and Atlantic. 3.9 About half of customers using ‘other’ suppliers (ie not BT or cable) said they accessed their supplier either dialling a PIN number before making each call, or via special equipment (eg a small box) attached to their phone. We will continue to monitor consumers’ use of suppliers as competition and choice continues to increase with carrier pre-selection and local loop unbundling which offer customers a wider range of suppliers using the existing lines in their home. Figure 3c Residential supplier usage
Base: UK adults with fixed phone at home, Feb ’01 (Base: 1925, 1% ‘don’t knows’ have been excluded) Dual supply customers 3.10 Homes using more than one company for their telecoms services tended to be the typical higher spend customers - the higher income, AB social grades, and Internet users - about 15% of whom said they used more than one supplier. 3.11 The May survey reported that one of the key features of multi-supply homes was their tendency to make international calls. It also reported however, that local and national calls were the main uses of secondary suppliers. Although this is probably a reflection of consumers calling patterns (ie they are likely to make more local and national calls than any other type), it indicates that secondary suppliers are not just being used for international calls. This was consistent with other Oftel research (see note 3). 3.12 Of the small proportion of customers found to be using BT and an indirect supplier in this survey, almost half said they used their indirect supplier for all of their calls. Customers who also used BT for some of their calls said they tended not to use their indirect supplier for their local calls. Are consumers making use of the choices available? 3.13 Almost 1 in 10 residential customers said they had changed the company supplying their fixed line services at home in the last 12 months (aside from moving house). Previous Oftel surveys (see note 4) identified that 25% of consumers said they had ever changed their fixed supplier. 3.14 Switching in the last year was higher amongst younger than older customers, and slightly higher amongst medium to higher income homes, and to a lesser extent those with Internet access. 3.15 Of the 10% residential customers who had switched supplier in the last 12 months, just over half (56%) said they kept their original number. This equates to about 5% of all residential customers who have ported their fixed phone number in the last 12 months. The main reason why customers changed their number was that their new company told them they had to have a new number. Whilst a small proportion said they wanted a new number, other barriers to portability included some lack of awareness that it was possible; the expense, time, or perceived hassle involved in keeping the original number; and advice from their old company that they couldn’t keep their number. Awareness of choices 3.16 The November survey reported that only 31% of all consumers said they were aware of the option of indirect suppliers, and there has been little or no change in this level over recent months. As choice increases some consumers may find it even more difficult to choose a supplier. The May survey (when this question was last asked) found that only 18% of consumers felt they had sufficient information to decide the best telecoms supplier and deal for them.
3.17 Research conducted for Oftel in March 2001 by Ipsos-RSL found that 7% of GB residential consumers (aged 15+) had seen or heard of the Phonebills website (see note 5), an independent website endorsed by Oftel which compared the price of companies offering fixed line services. Awareness was highest amongst broadsheet rather than tabloid press readers but there was little other notable difference between consumer groups. 3.18 Equally, 5% of GB consumers had seen or heard of Comparable Performance Indicators - quality of service information that enables consumers to compare different companies on a variety of aspects of their service. Awareness was slightly higher amongst younger than older consumers. 3.19 2% of consumers had seen or heard of both the phonebills and comparable performance indicators information sources. Interest in telecoms information and advice 3.20 The research conducted on behalf of Oftel in April, by Ipsos-RSL, examined interest in websites offering independent information and advice about telecoms services, products, and consumer rights, and asked consumers about the types of information they would like this sort of site to contain. 3.21 Overall, fewer than 1 in 5 (17%) GB consumers thought they would be likely to use a website offering independent information and advice on telecoms service, products and consumer rights. Interest was higher amongst younger consumers, AB social grades, and high income households, over a quarter of whom said they would be likely to use such a site. Homes with Internet access expressed considerably more interest (34%) in a telecoms information site, and those without Internet (6%). Consumers using non-BT suppliers for their fixed services also expressed more interest in the site. 3.22 Consumers who expressed interest in a website offering independent telecoms information and advice, were asked what information they would like the site to contain. Suggestions are shown in figure 3d. Figure 3d Information consumers would like to see on a website offering independent telecoms information and advice
Base: GB adults likely to use an independent telecoms information website, April 01 (Base:315) How much are residential consumers spending on their fixed line service? 3.23 There has been little change since May in the average fixed line quarterly spend at about £80. This is slightly inflated by a small number of high spenders and quarterly spends are shown in figure 3e. Figure 3e Quarterly fixed line spend, including rental, calls & VAT
Base: UK adults with fixed phone at home, Feb ’01 (Base: 1925, 11% ‘don’t knows’ have been excluded) 3.24 Spend was related to the obvious consumer characteristics including income, household size, and use of additional telecoms such as Internet. Average quarterly spend amongst different customers is shown in figure 3f. Figure 3f Average quarterly fixed line spend, including rental, calls & VAT
Base: UK adults with fixed phone at home, Feb ’01 (Base: 1925, 11% ‘don’t knows’ have been excluded) Notes to chapter 3 3Consumer switching
behaviour in fixed and mobile markets, conducted for Oftel by NOP (Mar
00) 4Consumer switching behaviour in fixed and mobile markets, conducted for Oftel by NOP (Mar 00) 5Consumers were shown pages from both the Phonebills and CPIs websites
Customer rating of fixed phone services 4.1 An additional survey conducted on behalf of Oftel by Ipsos-RSL amongst 2072 adult consumers across Great Britain during April 2001, found that consumers’ rating of their fixed line services, was slightly higher than that of their mobile and Internet services. This is shown in figure 4a. 4.2 The proportion of consumers giving ratings of excellent, very good, or good for their fixed service, was highest amongst older consumers (particularly over the age of 65). There was little other difference between different groups of consumers. Figure 4a GB consumers rating their fixed, mobile, and Internet service
Base: GB adults with each service at home, April ’01 (Fixed line base: 1804; Mobile base: 1366; Internet base: 468, ‘don’t knows’ have been excluded) 4.3 Fixed phone customers were asked to rate a series of aspects of their fixed service, shown in figure 4b. Quality and customer service received the highest ratings, considered at least ‘good’ by at least 4 in 5 customers. Overall value for money was considered at least ‘good’ by 70% of customers, and was only slightly higher than ratings for mobile value for money (67%). Cost of calls to mobiles received the lowest ratings, with only a third (35%) of customers rating them good/very good/excellent. Figure 4b GB consumers rating various aspects of their fixed telecoms service
Base: GB adults with fixed phone at home, April ’01 (Base: 1804, ‘don’t knows’ have been excluded) Satisfaction with complaint handling 4.4 A quarter of UK consumers said they had made a complaint to any telephone company (either fixed or mobile). This was lower amongst consumers using only fixed phones (at 16%), compared with those who used both fixed and mobile phones (29%). Higher income groups, the ABC1 social grades, heavy telecoms spenders and those with Internet at home were most likely to have complained. Younger and middle aged consumers (up to 54) were more likely to have complained than older consumers. 4.5 Overall, half of those who had complained said they were satisfied with the way in which their company handled their most recent complaint (figure 4c). This is a very similar picture to the small/medium business market. Dissatisfaction was highest amongst the groups listed above as most likely to complain, particularly high income, heavy telecoms spenders. Figure 4c Satisfaction with way company handled most recent complaint
Base: UK adults who have complained to a telephone company, Feb 01 (Base: 493) 4.6 Consumer satisfaction with individual aspects of the complaint handling process are shown in figure 4d. Key areas for improvement include keeping the customer informed of progress, meeting promises made to the customer, making it easier for customers to get hold of an appropriate person to deal with their complaint, and resolving the complaint within a reasonable period of time. Figure 4d % consumers satisfied with aspect of complaint handling process
Base: GB adults who have complained to a telephone company, April 01 (Base: 440) 4.7 The main reason for dissatisfaction with complaint handling was an unsatisfactory resolution or outcome for the problem (again this is similar to the business market). Other key reasons included the length of time take to resolve the issue, and problems with contacting the right person and getting them to assist. Reasons for dissatisfaction are shown in figure 4e. Figure 4e Reasons for dissatisfaction with way company handled complaint (unprompted)
4.8 All consumers were asked who else, apart from their telephone company, they would contact if they were not satisfied with the way their company handled their complaint. As seen in figure 4f, half of consumers were unsure of who could assist them or said they wouldn’t contact anyone else. Oftel was the most frequently mentioned source, particularly amongst middle age and higher income groups, whilst a small proportion said they would contact bodies such as Citizens Advice, Trading Standards, or consumer bodies such as Consumers Association. Figure 4f Organisations consumes would contact if dissatisfied with the way their complaint was handled by their telecoms supplier
Base: UK adults, Feb 01 (Base: 2073)
Impact of mobile phones on the calling behaviour from fixed home phones 5.1 About 6 in 10 UK adults claimed to personally have both a fixed and mobile phone (dual-users). Some examples of the various ways in which mobile communications are impacting on fixed line usage are shown below in figure 5a. There has been little change in these figures over the last six months. 5.2 Convenience was unsurprisingly the main reason for selecting mobiles rather than fixed phones, and almost a quarter of customers said they use their mobile when their fixed phone is being used by someone else. A significant minority of customers were selecting their mobile rather than fixed phone for perceived cost savings on a range of call types. 5.3 Just less than a third of dual-users said they were not substituting fixed phone usage with mobile in any of the listed circumstances. These tended to be lower spending fixed and mobile customers, and those over the age of 55. 5.4 1 in 5 consumers with both fixed and mobile phones said that people call them more on their mobile and less on their fixed phone than they used to. This was higher still amongst younger consumers, those living in larger households, and high spending mobile customers. There has been no change in this figure since August. Figure 5a Examples of consumer preference for mobile over fixed phone usage
Base: UK consumers with both fixed and mobile phone, Feb 01 (Base: 1233) 5.5 Despite indications that some consumers are choosing one means of calling over another to get the best deal, there is still evidence of consumer confusion over identification of mobile numbers, awareness of call costs and some concern over price of calls to mobiles from fixed line phones (figure 5b). 5.6 Almost half (46%) of those with fixed phones said they usually know whether or not it’s a mobile number they’re calling. This is slightly lower than reported in August 2000 (55% overall) which indicates that the national code and number change with regard to mobiles has yet to filter down to consumers, although this situation should improve as of end April 2001 when all mobile numbers will begin 077, 078 or 079. 5.7 At 41%, the proportion of consumers who said that if they know they’re calling a mobile number they tend to keep the call shorter than if they had been calling a fixed phone, has fallen slightly since August (51%). Almost a third of consumers (32%) said they were less likely to call a mobile number because of the call cost. 5.8 Only a fifth of consumers said they know roughly how much it costs to call a mobile number from their fixed phone, slightly lower than in August, and only 14% said that the cost of calling a mobile number doesn’t really matter to them. 5.9 Awareness of mobile numbers and costs was lowest amongst older consumers (age 55+), lower income groups, and consumers who don’t personally have mobiles. Figure 5b Consumer opinion on calls from fixed phone calls to mobiles
Base: UK adults with fixed phone at home, Feb 01 (Base: 1925)
Fixed and mobile usage 6.1 The proportion of homes with fixed line phones continues to remain stable at 93%. The proportion of homes with both fixed and mobile phones continues to rise however, currently 70% of UK homes. 16% of all UK consumers consider their mobile to be their main phone – 7 in 10 of these consumers also had a fixed phone at home. This was considerably higher amongst younger consumers – 33% of those aged 15-34 considered their mobile to be their main phone. It will be interesting to see whether these groups (forming 15% of the population) move to fixed phones or whether they will have a greater propensity to remain using mobiles as their main form of communication as they become home-owners. 6.2 It could be that these people make most of their calls when out and about and hence the convenience is more important than cost. This quarter’s survey confirmed findings from August that a significant minority of consumers use mobiles rather than fixed phones for at least some of their calls, (in some instances when both are available) for convenience and call savings. This is consistent with recent qualitative research conducted for Oftel by Research Works [web link] which identified some consumers who continue to use their mobile once at home (when a fixed phone is also available). 6.3 This quarter’s survey identified 1 in 5 consumers with both fixed and mobile phones who said that people now call them less on their fixed and more on their mobile. This was supported by recent qualitative research which reported some consumers increasingly giving our their mobile rather than fixed number (primarily only family and close friends calling their fixed phone). 6.4 The qualitative research also indicated an increasing culture of wanting and expecting to be able to get hold of people wherever they are. Two concerns that arose however, related to the cost of calls to mobiles and ability to identify mobile numbers. A third of fixed line customers said they were less likely to call mobiles because of the cost, and 2 in 5 said they tend to keep calls to mobiles shorter than calls to other fixed phones. Perhaps of more concern, is the evident confusion over identification of mobile numbers and awareness of charges, resulting in a significant proportion of consumers who don’t know they are paying higher charges. Now that all mobile numbers begin with 07 following the national number change, ability to identify mobile numbers should improve. Oftel is currently conducting effective competition reviews of both the mobile market and calls to mobiles, with statements due in July 2001. Areas for improving fixed phone services 6.5 Overall 90% of customers rated their fixed phone service as good, very good or excellent. This was slightly higher than comparable ratings for mobile and Internet services. 70% of customers said their fixed service was at least ‘good’ value for money, similar to ratings for mobile value for money, which is perhaps surprising given the higher mobile charges for many calls. This is perhaps a result of mobile customers factoring in the convenience aspect of their mobile service. The cost of fixed line international and calls to mobiles received the lowest ratings. Areas for improvement were also identified in telecos handling of customer complaints. Of the quarter of consumers who had complained, only half were satisfied with the way their complaint had been handled. Whilst this was primarily because the initial problem had not been resolved to their satisfaction, other areas for improvement included keeping the customer informed of progress, meeting promises made to the customer, and dealing with the complaint in a reasonable period of time. Improving awareness of customer information 6.6 10% of residential customers had changed the supplier of their fixed line services in the last 12 months. Half of these customers kept their original phone number. Suppliers were reported to be advising significant proportions of customers that they were unable to port their original number. Lack of awareness and perceptions of cost and inconvenience were also issues. Fewer consumers were aware of independent price and quality comparison information and whilst 1 in 5 expressed interest in using a website offering independent telecoms advice and information, there is still significant demand for price comparisons in particular, as found in previous Oftel research. The telecoms industry has significant work to do to promote these initiatives, providing consumers with better information to assist them get the best deal. Oftel is contributing to his information awareness though the recent publication of its consumer guides. Copies can be obtained from Oftel’s Research and Information Unit on 020 7634 8761. 6.7 Oftel is also working the industry to revise the comparable performance indicators to improve their clarity and ease of use. Other initiatives such as the Oftel endorsed TelecomsAdvice website, which offers independent information for small businesses may also be of use to some consumers, providing information on the uses, benefits and availability of different technologies.
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