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Consumers’ use of mobile telephony - Summary of Oftel residential survey |
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Q4 February 2001 Chapter 4 - Consumers' use of mobile packages and suppliers Chapter 5 - Customer satisfaction with mobile service Chapter 6 - Impact of mobile phones on use of fixed line home phones Annex A - A Price Index for Mobile Telephony
1.1 This report provides an overview of the key findings of consumer behaviour in the mobile market, 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 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 below) during February 2001, of whom 67% claimed to personally own or use a mobile phone. A further 8% who do not personally use a mobile claim to live in a home with at least one mobile. The report has been prepared by Oftel (see note 2 below) , based on the results provided by MORI. 1.4 This 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 survey of 1343 consumers with mobiles is about 2-3%, 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.
Mobile usage 2.1 Mobile ownership continues to rise. During February 67% of UK adults claimed to have a mobile, up from 62% in November. Furthermore, mobile penetration amongst the UK population (adults and children) has risen by 6 million since November, to 40 million subscribers by January 2001 (Note: Mobile subscriber estimates published by Fintec Mobile Communications, January 2001 - includes residential and business subscribers). Three-quarters of UK homes now claim to have at least one mobile phone. 2.2 Use of pre-paid package (‘pay as you go’ and ‘all in one’ packages) continues to grow, currently favoured by almost 8 in 10 residential customers, and they remain particularly popular amongst mobile-only homes. 2.3 16% of UK adults consider their mobile to be their main method of making and receiving calls. 7 in 10 of these consumers also have a fixed phone at home. There has been little change since November in the proportion of consumers (almost 7 in 10) with both fixed and mobiles phones who claim to be actively choosing mobile rather than fixed phones (in situations, typically at home, where they could use either) for at least some of their calls. The most popular circumstances where this occurred included when the home fixed phone was already being used, to use up free call minutes, or call savings on specific numbers or at certain times of the day. Calls to mobiles 2.4 20% of consumers with fixed and mobile phones claimed that people now call them more on their mobile and less on their fixed phone than they used to. 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. Satisfaction with mobiles 2.5 Following a slight drop last quarter to 90%, overall satisfaction with mobile services recovered in February to 93%, which is consistent with previous quarters. The proportion of consumers rating their mobile service as good, very good or excellent, was slightly lower than ratings for their fixed phone service, but broadly in line with ratings for their Internet service. Cost of calls, particularly international and off-net calls received the lowest ratings, and less than half of consumers said they were aware of these costs before they bought their mobile. Use of mobile data services 2.6 Just over half of mobile users said they send text messages, on average 10 per week. For half of customers text messages comprise less than a quarter of the total calls made from their mobile, while 3 in 10 customers said that text messages comprise at least half of their total mobile calls. Text messaging was considerably more popular amongst younger than older customers. Switching supplier 2.7 Only 17% of mobile customers were aware of the procedures and potential costs involved in switching supplier before they bought their phone, although previous Oftel surveys reported that the majority of customers who had switched found the process easy. Just over a third of mobile customers were aware that their handsets could be locked to their current supplier and a quarter were aware that they might be charged to have their phone unlocked.
Mobile phone usage 3.1 Mobile usage continues to rise. 67% of adults surveyed in February 2001 said they owned/used a mobile phone, up from 62% in November (figure 3a). This equates to about 32 million adult subscribers. However, when asked about other mobile subscribers in their household (adults and children), mobile penetration rose to a conservative (Note: Homes with more than 4 mobiles were counted as 4 subscribers) 38 million, a rise of 6 million over the Christmas period to February 2001. This estimate is slightly lower than industry subscriber estimates for the same period - Fintec Mobile Communications January 2001 estimate 40 million subscribers - although it should be borne in mind that these include business subscribers. Figure 3a Mobile
growth - % UK* adults who have a mobile phone * Note - Figures up to March 2000 are based on GB population and are taken from MORIs Technology Tracker. Figures from May 2000 onwards include Northern Ireland and therefore represent the UK adult population.
3.2 Three-quarters of UK homes claimed to have at least one mobile phone (figure 3b). (This includes both adult and child users, but we are unable to accurately establish from this survey the split between the two). Figure 3b %
UK homes with at least one mobile phone
3.3 7% of UK homes claim to be without fixed phones. The proportion of these using mobiles instead remains high at almost 8 in 10, which equates to just over 5% mobile-only homes in the UK. This is broadly consistent with findings from the May and August surveys and can be seen in figure 3c below. Figure 3c Penetration
of mobile telephony in UK homes
Which consumers use mobile phones? 3.4 Figure 3d shows mobile ownership (Note: Includes small number phones (c.5%) provided by someone else eg, employers) levels amongst various demographic groups of the population. Mobile ownership is still largely dependent on income and age. 3.5 Ownership continues to rise amongst all groups, but remains highest amongst the high income groups (more than £30,000 annual household income) and younger consumers (aged 15-34), over 80% of whom have a mobile. Use of mobiles fell with increasing age, and are currently used by 13% of those over the age of 75. It was also significantly lower than average amongst lower income groups and consumers not working, although half of these groups now also have mobiles. 3.6 Figure 3d shows combined quarterly rolling data from the August and November, and November and February surveys for geographic regions, to provide more robust sample sizes (minimum of 200 for each area) on which to base conclusions.
3.7 Between January ’99 and May ’00 there was a slight shift in the profile mobile phone users. This is illustrated in figure 3e. Although still prevalent amongst the younger and middle age groups, and higher social classes, distribution had experienced a slight shift towards the lower social grades and to a lesser extent older consumers. Since November the proportion of mobile users over the age of 55 has risen, although in terms of social grade there has been little change. Figure 3e Changing
profile of mobile usage
Mobile-only homes 3.8 7% of UK homes had no fixed phone in November. Almost 8 in 10 of these homes use mobiles instead of fixed phones, predominantly pre-pay packages. Preference for the flexibility and convenience that mobiles offer, particularly pre-pay in relation to managing costs, were previously found to be the main drivers behind this trend. 3.9 Spending an average £28 each month on their mobile bill, they spend more than mobile users generally (average mobile monthly spend £18). Equating to over £80 per quarter, these mobile-only users are spending as much as the average fixed line customer (who spends about £80 per quarter). This suggests that these consumers are either not familiar with fixed line charges and perhaps overestimate them, or that the greater control and convenience of mobiles is more significant than cost alone. Mobile as main method of calling 3.10 16% of all residential consumers considered a mobile to be their main method of making and receiving calls. 7 in 10 of these consumers who considered mobiles their main telephony services also had a fixed phone at home. Satisfaction with their main method of calling is shown in figure 3f. 3.11Consumers for whom mobile was their main telephony service tended to be younger (15-34) 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 3f %
UK consumers using and satisfied with their main method of telephony
Chapter 4 - Consumers'
use of mobile packages and suppliers Packages used 4.1 Popularity of pre-paid packages continues to grow, preferred by 78% (‘pay as you go’ 68% and ‘all in one’ 10%) of mobile users in February 2001 (figure 4a). Over 4 in 5 mobile-only homes said they used pre-paid packages. Figure 4a Profile
of mobile package usage
4.2 ‘Pay as you go’ packages are still most popular amongst DE social grades / low income groups, 4 in 5 of whom used these. They are also more favoured amongst women than men, and amongst customers over the age of 55, than middle age groups. There were fewer distinct features of consumers using ‘all in one’ packages (ie where phone and line rental is paid in advance and calls are either billed monthly or paid by call vouchers), although they were slightly more popular with the higher income groups and AB social grades. 4.3 Post-pay ‘monthly subscription’ packages remained more popular amongst AB social grades / high income groups, over a third of whom used these post pay packages. They were also favoured by more men than women. 4.4 Over three-quarters of mobile customers (78%) said they were satisfied with the choice of mobile packages and tariffs available. 11% were not satisfied (younger rather than older customers, higher income groups, and those using post-pay packages) and 10% weren’t sure (primarily older customers). Suppliers used 4.5 A comparison of Oftel’s survey with published sources of mobile market share information (in terms of numbers of subscribers using each of the four networks, shown in figure 4b), indicates that the survey is broadly reflective of the current mobile market in terms of the proportion of customers using each network. It should be noted that industry figures include business subscribers. Figure 4b %
mobile users using each network
* NB rounding of data has resulted in industry data totalling 101% Switching experiences 4.6 The August survey reported that 21% of mobile customers switched network. A fifth of those who had changed their network said they had kept their original number and a similar proportion had kept their original handset. This equates to about 4% of mobile customers who had ported their number and 4% who had unlocked their handset. 4.7 Whilst previous Oftel surveys (www.oftel.gov.uk/publications/research/swit0800.htm) reported that the majority of customers who had switched found it easy, results from February found that only 17% of mobile customers were aware of the procedures and potential costs involved in switching supplier before they bought their phone. Just over a third (35%) were aware that their handsets could be locked to their current supplier (and would need to be unlocked to enable them to use a different network) and 26% were aware that they might be charged to have their phone unlocked. Awareness of the costs and procedures involved in switching was highest amongst younger customers, AB social grades (these two groups were previously found to be most likely to have switched), heavy mobile spenders, and those using post-pay packages. 4.8 The February survey also reported that 4% of mobile customers said they had attempted to have their handset unlocked in order to use it on a different network. Three-quarters completed this process successfully and a quarter did not, citing barriers which included their uncertainty as to how to go about it; a complicated and lengthy process; lack of assistance from their current supplier who said it would be difficult; and the expense involved. Use of mobile data services 4.9 Just over half of mobile customers said they use text messaging (53%), although as yet only a small proportion were using predictive text messaging – a faster method of writing text messages (7%). Small proportions were also using their mobile for Internet access (2%) and email (4%). These services were all more popular amongst younger consumers (aged 15-34). 4.10 Frequency of text messaging, taken from a survey conducted on behalf of Oftel by Ipsos-RSL amongst 1366 GB mobile customers during April 2001, is shown in figure 4c. Use of text messaging was highest amongst younger customers (under the age of 24) of whom 85% said they send text messages, including 56% who send them on a daily basis. Only 8% of customers over the age of 65 said they send text messages. Figure 4c Frequency
of mobile text messaging
4.11Customers who use their mobile to send text messages, on average send about 10 messages per week. This was considerably higher amongst those under the age of 24 (on average 16 per week), compared with those over 55 (on average 5 per week). Half of mobile customers who send text messages said these messages comprise less than a quarter of the total calls they make on their mobile. 3 in 10 however said that text messages comprise at least half of their total mobile calls. This rose to just over 4 in 10 younger customers. 4.12 8 in 10 mobile customers were satisfied with the choice of services available through their mobile, only 6% were not satisfied (younger rather than older customers, and those using post-pay packages), and 14% were unsure. Mobile spend 4.13 Average monthly mobile spend was about £18 (figure 4d), which is slightly lower than in previous months (£21). Oftel’s Market Information (www.oftel.gov.uk/publications/market_info/miu1100.pdf) publication reports continuing growth in mobile minutes which indicates that consumers are using their mobiles more rather than less, and Oftel’s mobile price monitoring (www.oftel.gov.uk/publications/research/prin1100.htm) indicates that consumers are getting more minutes for their money as prices fall. Figure 4d
Average monthly mobile spends
4.14 Heavy spenders were typically high income groups, large households, and heavy fixed line spenders, but equally, homes without a fixed phone. Average monthly mobile spend decreased with increasing age, and was lowest amongst customers over the age of 55. 4.15 Aside from differences by customer type, spend varies quite considerably by the type of mobile package used, with those using monthly subscription packages spending three times as much as those using pre-pay.
Chapter 5 - Customer satisfaction with mobile service 5.1 Overall customer satisfaction recovered to 93% during February following a slight drop in November compared with previous months (90% November, 93% September, 94% May). This is seen in figure 5a. Figure 5a %
UK mobile customers satisfied with mobile service overall
5.2 Differences between customers of different networks and mobile packages are shown in figure 5b. There were only small variations in satisfaction levels between customers of different networks and using different mobile packages, and there was little other difference in satisfaction levels between consumer groups. Heavy mobile spenders (more than £30 per month) tended to be slightly less satisfied than average with their mobile service. Figure 5b Customer
satisfaction with mobile phone service
5.3 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 mobile service was slightly lower than their fixed line services, but of a similar level to their Internet service. This is shown in figure 5c. Figure 5c
% GB consumers rating their fixed, mobile, and Internet service
as good / very good / excellent
5.4 In the same April survey mobile customers were asked to rate a series of aspects of their mobile service, shown in figure 5d. Quality and customer service received the highest ratings, considered at least ‘good’ by about three-quarters of customers. Overall value for money was considered at least ‘good’ by two-thirds of customers, and was comparable to ratings for fixed phone services, where 70% of customers rated the overall value for money at least ‘good’. Only a third of mobile customers on average rated the cost of calls to other mobile networks, and calls to international numbers, as good, very good or excellent. Figure 5d %
GB consumers rating various aspects of their mobile service as good
/ very good / excellent
Mobile call costs 5.5 The August survey reported that the cost of calls to mobiles was not a significant factor for the majority of customers when selecting their mobile phone, and there has been little change in this situation over the last six months, as seen in figure 5e. Almost 1 in 5 customers said they took into consideration the mobile networks they were likely to be calling when making their mobile selection. The relevance of this is the provision of cheaper calls by mobile suppliers to callers on their own network (on-net) than other networks. Younger customers appeared to be taking greater advantage of this ‘on-net’ benefit than older customers, who were less likely to consider the networks they would be calling. 5.6 The majority of mobile customers however, said they did not find out how much it would cost people to call them and this cost was not a significant factor in their choice of network. Figure 5e %
mobile users who considered cost of calls to mobiles when selecting
their mobile
5.7 Two-thirds of mobile customers were aware that off-net mobile call costs (ie calls to mobiles on different networks) were more expensive than on-net call costs (calls to mobiles on the same network) – 29% thought they cost ‘a little more’ and 37% thought they cost ‘a lot more’. Only 4% of customers thought that off-net costs were cheaper than on-net costs, but a sizeable minority (30%) thought they cost roughly the same, or weren’t sure. 5.8 On average, about half of mobile customers (47%) said they were aware of the price of calls to mobiles on different networks before they bought their phone, and a similar proportion (54%) were aware of differences in the price of calls depending on who they called and the time of day. Just less than a quarter of customers (23%) were aware of the cost of using their mobiles whilst abroad, before they had bought their mobile. Awareness of these various call charges was higher amongst younger mobile customers.
Chapter 6 - Impact of mobile phones on use of fixed line home phones 6.1 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 6a. There has been little change in these figures over the last six months. 6.2 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. 6.3 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. 6.4 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 6a Examples
of consumer preference for mobile over fixed phone usage
6.5 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. 6.6 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. 6.7 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. 6.8 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. 6.9 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 6b Consumer
opinion on calls from fixed phone calls to mobiles
Mobile growth continues.... 7.1 Growth in mobile usage in terms of number of subscribers continues, currently used by two-thirds of UK adults, and three-quarters of UK households claim to have at least one mobile. Mobiles appear to be an affordable service for the majority of homes without a fixed phone, consistently used by three-quarters of these homes, and the majority of whom were satisfied with this method of calling. 7.2 Overall 16% of adults consider their mobile to be their main method of making and receiving calls, 7 in 10 of whom also have a fixed phone at home. Additionally, 7 in 10 homes with both fixed and mobile phones are choosing their mobile over their fixed phone for a certain proportion of their calls. Reasons include convenience eg when fixed phone is already in use, and for cost savings eg cheaper calls to other mobiles, at certain times of the day, or to use up free call minutes. Further research on this topic, in the form of qualitative depth interviews conducted on behalf of Oftel by Research Works during March 2001 can be found at www.oftel.gov.uk/publications/research/2001/q4sub0501.htm. And consumers are generally satisfied with the service they receive … 7.3 Overall satisfaction with mobiles remains high, and recovered to 93% (consistent with previous quarters) following a small drop in November. This might have been a result of the flooding which affected much of the country at this time. Consumers’ overall rating of their mobile service was slightly lower than for fixed phones, although was still high at over 80%, and received similar ratings to their home Internet service. They are benefiting from falling prices, but are still dissatisfied with some charges … 7.4 Consumers are getting more minutes for their money as the price of mobile calls continues to fall. Oftel’s Market Information publication (www.oftel.gov.uk/publications/market_info/miu1100.pdf) reports continued growth of mobile minutes and this latest quarterly survey reported a drop of about £3 in consumers’ average monthly mobile bill. We shall continue to track this in coming quarters. Dissatisfaction with mobile call charges, particularly international and off-net calls remains quite high however, and less than half of mobile customers said they were aware of these costs before they bought their mobile. And there is still confusion and concern over price of calls to mobiles … 7.5 There is still considerable confusion over the price of calls to mobiles from fixed lines. Concern over costs is persuading 2 in 5 fixed line customers to keep calls to mobiles shorter than if they were calling a fixed phone, and a third of customers said they were less likely to call a mobile number because of the cost. Perhaps due to informational issues… 7.6 In addition to confusion over price of calls to mobiles, significant proportions of mobile customers said they had not been aware of various charges and procedures when they bought their mobile. In particular, cost of international and off-net calls were not particularly familiar, and only a third of customers were aware that their handsets may require unlocking if they wanted to use their phone on a different network. Fewer still were aware that there may be a charge for unlocking their handset. This is broadly consistent with findings from previous quarters which reported that although the majority of customers were satisfied with the information sources available to assist their mobile selection, advice from family and friends was the most popular source of their information, which is not necessarily impartial or complete.
Annex A - A Price Index for Mobile Telephony December 2000 Background A.1 In February 2001, Oftel published the initial results of its review of competition in the mobile sector. A.2 An essential part of this review is an analysis of price trends. In 1999 Oftel appointed National Economic Research Associates (NERA) to construct a suitable model to allow Oftel to track price changes over time and reflect the actual experience of different types of customer. A.3 Results are now available showing price trends to the end of December. These results update those which were referred to in the mobile review consultation document. Results A.4 Prices of mobile telephony services fell by 4 per cent in the final quarter of 2000. While prices of advance and monthly contract packages remained relatively unchanged from September levels pre-pay prices fell by almost a fifth during the quarter. Note that these results precede recent announcements that prices for pre-pay packages may rise. Figure 1: Prices of mobile telephony by payment type (January 1999=100)
A.5 Overall prices fell 13 per cent cheaper during 2000 and are now 27 per cent cheaper than at the start of 1999 when the monitoring exercise began. A.6 Pre-pay prices fell by 35 per cent during 2000; monthly contract prices fell by 9 per cent. Advance contract prices remained relatively unchanged from end 1999 levels. A.7 During 2000 price falls were greatest (18%) for ‘zero-use’ customers. Prices fell least for high users although these users were still paying 11% less in December 2000 than a year previously.
Figure 2: Prices for mobile telephony by usage pattern
Methodological notes A.8 The model used to produce these analyses classifies mobile customers into particular categories or ‘profiles’ according to usage patterns and then applies operator tariffs to these profiles. User profiles of typical customers were identified from responses to a consumer survey carried out early in 1999. A.9 For each user profile the model estimates the proportion of calls made at peak, off-peak and weekend rates. The model also estimates the proportion of different call types made by each profile. Estimates are made of the proportion of calls made to fixed networks – local, national or international; calls made to mobile networks – own or other; and other calls such as voicemail, fax or SMS. A.10 While customer profiles may have changed since the original survey was conducted the model provides an indicative guide to recent price trends. A.11 The model does not consider the actual cost of handsets but does take into account connection fees and handset subsidies as well as call charges. A.12 Full details of the model were outlined in the NERA report ‘A Price Index for Mobile Telephony’. To reduce monthly fluctuations in the latest figures, however, NERA has used a one-year moving average to estimate subscriber growth and the rate of new connections. This change means that results presented in the original NERA report for January to June 1999 have been revised slightly. In addition NERA has made some small revisions to previously published data following clarification of the charging procedures on some packages. A.13 More detailed results are available on request. Data are presented in index form only and are not available for individual operators. A.14 For further information on mobile price monitoring please contact: Kenny Osborne Tel: 020 7634 8973 Or by e-mail: kenny.osborne@oftel.gov.uk
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