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| Consumers' use of Internet: Oftel residential survey Q4 February 2001 | |
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| Contents
Chapter 1 Introduction Chapter 2 Summary findings Chapter 3 Main findings Chapter 4 Are consumers making use of the range of connections and ISP packages available? Chapter 5 Satisfaction with Internet service Chapter 6 Potential future Internet growth and barriers to home access Chapter 7 Conclusion 1.1 This report provides an overview of the key findings on consumer behaviour in the Internet market. The results are taken from the fourth quarter 2000/01 of Oftel’s quarterly residential consumer survey conducted in February 2001. Results from previous quarters (conducted in May, August and November 2000) are used for comparison purposes and referred to throughout this report. 1.2 The report provides a base for 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 during February 2001, of whom 34% claimed to have Internet at home (see note 1) . This report has been prepared by Oftel (see note 2) , based on the results provided by MORI. 1.4 The report covers:
1.5 Other issues addressed in recent quarters include:
Notes 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 sample of 673 home Internet users is about 2-4%, 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 any decisions taken by any person in reliance on the
report.
2.1 Home Internet access continues to grow. By February 2001, 34% of UK homes said they were connected, up from 30% in November 2000. This represents an increase of 1 million homes connected to the Internet since November, with a total of 8.5 million homes connected by February 2001. 2.2 Home Internet access rose amongst most subgroups of the population between August and November. Although access remains highest amongst younger and middle aged groups, higher income and large households, an increasing number of DE homes and older consumers are connecting. 2.3 Whilst the vast majority of customers still access the Internet via the traditional PC and ordinary phoneline / dial up method, already small numbers, particularly younger consumers, are adopting new technologies including mobile phones, digital TV, and to a lesser extent games consoles and personal organisers. Internet access via digital TV was also popular amongst increasing numbers of lower income groups. Take up of high speed Internet access via ADSL technology remains low at just less than 1% amongst Internet homes. 2.4 Use of unmetered packages continues to grow - with over a third of Internet homes (35%) currently claiming to use fully or partially unmetered packages. Average weekly household time spent on-line remained stable at about 7 hours, and while this was inflated by a small number of heavy users, customers with unmetered packages (c. 10 hours) spent about twice as long on-line as those on pay per use packages (c. 5 hours). 2.5 As found in previous months, the vast majority of customers (90%) were satisfied with their home Internet service. The November report identified the most satisfactory aspects of Internet service, which included ISP quality of service and to a lesser extent call and subscription charges. Fewer were satisfied the speed of their service, and with the choice of speeds available for accessing and using the Internet although this may partly reflect lack of awareness of alternatives available. 2.6 A further 15% of UK homes thought they would be likely to connect to the Internet within the next 12 months. A similar proportion identified significant barriers that would prevent them from connecting in the short term, and said that cheaper call, subscription, and equipment costs, along with better provision of information detailing the potential uses and benefits of the Internet, and advice on how to connect, would encourage them to get access sooner. A significant proportion of UK homes however (36%) said they didn’t want or need the Internet at home. Figure 2a Summary of Internet penetration / potential penetration in the UK
Base: UK homes, Feb ’01 (Base: 2073)
The extent of UK Internet usage at home 3.1 Across the UK, an average 34% (see note 3) of homes (8.5 million) claimed to be connected to the Internet during February 2001, a growth of 1 million in the 3 months since November 2000 (30%). A further 6% of adults who do not have home Internet access said they use the Internet at work / place of study, or elsewhere. Figure 3a shows home Internet connection trends since January ’99. 3.2 Until August 2000, PC ownership had remained fairly unchanged around the 40% mark since January 1999. By November 2000 however, it had risen to 46% and has continued to rise to 48%. Until recently, PCs have been almost the sole method of home Internet access and we will continue to track these levels in subsequent surveys as the uptake and expansion of alternative means of access such as digital TV continues. 3.3 During February 5% of Internet homes (c. 2% UK homes) claimed to be accessing the Internet via their TV (see note 4). Figure 3a % UK homes with PC and Internet access
Base: *UK homes, Feb ‘01 (Base: 2073) Note - Figures up to March 2000 are based on GB population and are taken from MORI’s Technology Tracker. Figures from May 2000 onwards include Northern Ireland and therefore represent the UK adult population. Which consumers have Internet access at home? 3.4 Figure 3b shows growth between November ’00 and February ’01, in the proportion of UK consumers who have Internet at home. There was an increase in Internet uptake across almost all consumer groups. Usage remains highest amongst AB social grades and higher income groups, who were three times as likely to have Internet as those on lower incomes. Although usage remains lowest amongst the lowest income groups and consumers over the age of 55, take up by these groups has continued and almost 1 in 5 of these consumers now have Internet at home. 3.5 All regions experienced some increase in the proportion of homes with Internet access between August ’00 and February ‘01. Figure 3c shows combined quarterly rolling data from the August and November, and November and February surveys for individual geographic regions, to provide more robust sample sizes (minimum of 200 for each area) on which to base conclusions. Figure 3b % adult population with home Internet
Figure 3c % UK homes with Internet
Base: UK adults Base: UK homes * 3.6 Home Internet users were also more likely than average to have other technologies including mobile phones and pay TV, particularly digital. This can be seen in figure 3d. 3.7 However, home Internet users do not confine their usage exclusively to the home, but are also more likely than average to use the Internet at work or their place of study. Figure 3d Telecoms usage in UK Internet homes (February 2001)
How has the profile of Internet homes changed? 3.9 Between January ’99 and May ’00 there was a slight shift in the profile of homes with Internet access. This is illustrated in figure 3e. Although still prevalent amongst the younger and middle age groups, and the working population and higher social classes, distribution had experienced a slight shift towards older users, lower social grades, and those not working. Between May and November 2000, there was little change in the profile of home Internet users, although more recently there appears to have been a slight rise in the proportion of DE social grades and consumers over the age of 55. Figure 3e Changing profile of homes with Internet access
Base: Homes with Internet access, Feb ‘01 (Base: 673) Notes 3
The error margin for this sample of 673 home Internet users is about
2-4%.
Are consumers making use of the range of connections and ISP packages available? Connection method 4.1 The majority of consumers connect to the Internet using the traditional PC and ordinary phone line / dial up method. This is shown in figure 4a. However, a small proportion of consumers have adopted newer technologies including ADSL and cable modems offering ‘always on’ and faster usage speeds, or alternative access mediums such as digital TV, mobile phones and to a lesser extent other technologies such as games consoles and personal organisers. Figure 4a Methods used by consumers to access the Internet at home
Base: UK homes with Internet access, Feb ‘01 (Base: 673, excludes 6% ‘don’t knows’) *6% of consumers claimed to be using cable modems which seems quite high and is likely to be an over-estimate resulting from consumer confusion as to what this constitutes. Industry estimates suggest that less than 1% of Internet homes currently use cable modems. 4.2 Consumers accessing the Internet via digital TV, games consoles and personal organisers were primarily under the age of 34. Digital TV access was also particularly popular in lower income homes and amongst the C2DE social grades indicating that is perhaps a more cost effective or familiar technology enabling these groups to have home Internet access. 4.3 The May and August surveys (see note 5) reported significant levels of interest in ADSL, however considerably fewer consumers were prepared to pay £40 per month for the service. 4.4 Potential barriers to take-up of ADSL services for some consumers included the price of the service, concerns about the level of security with a permanent connection, a lack of understanding about the service, and concerns that there would be hassle involved in switching to ADSL. 4.5 Potential early adopters of the service (depending on availability) included younger consumers (aged 15-34), the higher income groups, and larger households (5+ people) of whom 1 in 3 (already with Internet) thought they would be likely to get ADSL in the next 12 months. Interest was also higher than average amongst customers paying a subscription and calls costs for their Internet usage, and longer established Internet homes (connected for more than one year). Number of ISPs used 4.6 Consumers on the whole appeared to be making relatively wide use of the range of ISPs and Internet packages available, given the relatively short length of time that some of the deals have been available. 4.7 Figure 4b shows that just over a fifth of Internet homes said they use more than one ISP. Additional research conducted for OFTEL in January 2001 by Ipsos-RSL found that 30% of GB Internet homes said they had switched ISP. 4.8 Multi-ISP usage appears to have fallen over recent months, which may reflect the growth in use of unmetered and subscription based packages where consumers may be committed to a minimum contract. 4.9 Multi-ISP usage was most popular amongst younger consumers (under the age of 34), amongst higher income groups, and amongst medium to heavy Internet usage homes (more than 6 hours per week). Figure 4b Number of ISPs used at home
Base: UK homes with Internet access, Feb ’01 (Base: 673, 7% ‘don’t knows’ have been excluded) Type of package used 4.10 Use of unmetered packages continues to grow, with just over a third of homes now claiming to use some form of unmetered access, up from a quarter in August (which was in line with industry estimates). This is shown in figure 4c. Use of the traditional "ISP subscription and cost of calls whilst on-line" package, (which was the predominant pricing package until the end of ’98 when subscription-free packages were popularised by Freeserve) appears to have risen in the last three months (to 20%), following several months of stability at about 15%. Figure 4c Main type of Internet package used at home
Base: UK home with Internet access, Feb ’01 (Base: 673, 19% ‘don’t knows/none of these’ have been excluded) ISPs used 4.11 Consumers are making use of a range of ISPs as shown in figures 4d and 4e. The following chart and table shows individual ISP share of the residential Internet market based on what ISPs consumers said they were using. [NB This is not the same as the proportion of consumers using each ISP as some customers are using more than ISP] Only ISPs with share of 2% or more are shown. ISPs with less than 2% share are included in the ‘other’ category. Figure 4d ISP share of UK residential Internet access (based on all ISPs consumers use)
Base: All ISPs used in UK homes with Internet access, Feb ’01 (Base: 807, 12% ‘don’t knows’ have been excluded) Figure 4e ISP share of UK residential Internet access (based on all ISPs consumers use)
Base: All ISPs used in UK homes with Internet access, Feb ’01 (Base: 807, 12% ‘don’t knows’ have been excluded). See also note 6. Time spent online 4.12 There has been no change since August, in the average weekly household time spent on-line - about 7 hours. This is inflated by a small number of heavy users and in fact the majority of homes are on-line for less than this. Just over 1 in 10 households claim to be using the Internet for more than a couple of hours each day. Further details of on-line activities can be found in the May ’00 report. 4.13 Although income seems to be a contributing factor in connecting to the Internet it does not seem to be a key determinant in the amount of time spent on-line. February results confirm previous findings that heavier users tend to be larger households, but also the C2DE social grades and lower income groups. Younger consumers (aged 15-34) still tend to spend longer online each week than older consumers (aged 55+). Previous quarters’ results indicated more experienced users who had been connected for longer tended to spend slightly longer on-line than more recently connected users. What impact does the type of package have on levels and patterns of usage? 4.14 Despite small sample sizes in previous quarters in terms of the number of people using partially unmetered packages, early indications supported heavier use amongst these customers than those on other Internet packages. As sample sizes increase, this trend continues, seen in figure 4f. 4.15 Customers using unmetered packages claimed to be using the Internet for almost twice as long each week as those on pay-per-use packages. This may partly reflect the number of users in each home, as large homes (with 5+ people) were slightly more likely than average to use unmetered packages (particularly fully unmetered). Both large and medium sized homes said they were on-line each week for longer than smaller homes. Figure 4f Average weekly household hours spent on-line, by type of package used
Base: UK homes with Internet access, Feb ’01 (Base: 673, excludes 6% ‘don’t knows’) Caution should be exercised as base size less than 100 ** Time spent online by the connection medium is shown for interest only - extreme caution should be exercised due to some very small base sizes. It is too early to derive any conclusions from these figures but we shall continue to track time spent online as use of these alternatives grows. Notes 5 See www.oftel.gov.uk/publications/research/int1000.htm
and www.oftel.gov.uk/publications/research/int0800.htm
Satisfaction with Internet service 5.1 The majority of Internet users (90%) were satisfied with their home Internet service as seen in figure 5a. There has been a slight drop in this level since May ’00 from 95%. This level of satisfaction is broadly in line with consumer satisfaction in other markets including fixed and mobile. Generally there was little difference between consumers or by the type of ISP package used, and heavy usage homes (more than 16 hours per week) were only slightly less satisfied than lighter users. Figure 5a Customer satisfaction with home Internet service
Base: UK home with Internet access, Feb ’01 (Base: 673, excludes 8% ‘don’t knows’) 5.2 The November survey (see note 7) found that customer satisfaction was highest for quality of service offered by ISPs – 4 in 5 consumers said they were satisfied with this aspect of their Internet service. About 3 in 5 customers were satisfied with subscription and call costs, and with the customer service offered by their ISP. Satisfaction was lowest (although still more than half of customers were satisfied) with speed of service, reflecting the findings in May which identified speed and connection difficulties as problems experienced by a significant proportion of customers. 5.3 The November survey found 74% of home Internet customers were satisfied that their particular ISP and package was best suited to their needs. This report can also be referred to for satisfaction with the level of choice in the Internet market and sources of information used by consumers when selecting their Internet service. Notes 7 See www.oftel.gov.uk/research/2001/q3intr.htm
Potential future Internet growth and barriers to home access 6.1 Of the 66% UK homes currently without home Internet access, a fifth (22%) thought they would connect at home within the next 12 months (figure 6a) – which equates to a further 15% of UK homes. Potential connection in the near future was highest amongst the younger and middle age groups, AB social grades, higher income and larger homes. Interestingly, homes currently without a fixed line phone were as likely as those with a fixed phone, to plan to get home Internet access within the next 12 months. Figure 6a Likelihood of getting home Internet access in next 12 months
Base: UK homes without Internet access, Feb ’01 (Base: 1400) 6.2 Half of homes without Internet said that nothing would encourage them to connect at home in the next 12 months because they didn’t want the Internet and felt they didn’t have any need for it. For the remainder of unconnected homes however, potential barriers to earlier connection included costs and lack of information. Factors that people said would encourage them to connect to the Internet at home are shown in figure 6b. Figure 6b Factors that would encourage UK homes without Internet access to connect to the Internet in the next 12 months - unprompted
Base: UK homes without Internet access, Feb ’01 (Base: 1400)
7.1 Home Internet usage continues to grow, and whilst it is still used most widely by the AB social grades, higher income groups, and younger consumers, increasing proportions of older consumers and lower income groups are connecting at home. Digital TV appears to be an increasingly popular means of connection amongst lower income groups / DE social grades. 7.2 Although the majority of online customers access the Internet via the traditional PC and ordinary phone line / dial up method, younger consumers in particularly are starting to use alternative methods including digital TV, mobile phones, games consoles and personal organisers – albeit in fairly small numbers to date. Anecdotal (due to the small numbers of users involved) evidence from this survey indicated these methods are currently offering less satisfactory ways of accessing the Internet than the traditional PC and phoneline method. This may change as they become more advanced or as consumers revise their expectations as to the level of service these methods can offer. 7.3 A significant proportion of UK homes (36%) neither have, nor appear to want home Internet access, certainly in the short term. But it will be interesting to see the extent to which this changes in the longer term as familiarity, online services and potential benefits increase. 15% of homes are currently without Internet access but think they are likely to get it in the next 12 months. A further 15% said they were unsure whether they would get connected, but not because they don’t want Internet access it seems. The main factors that would encourage them onto the Internet included cheaper subscription and/or call charges; cheaper equipment costs (eg PC, TV); and cheaper phoneline installation charges. Education was also an issue evidenced in requests for better (or perhaps wider availability) of information on the benefits and uses of the Internet, and information on how to connect and learn to use the Internet. Currently cost and lack of familiarity with the Internet would appear to be barriers to access for a significant minority of consumers.
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