Contents

Chapter 1 Introduction

Chapter 2 Summary findings, conclusions and recommendations

Chapter 3 UK Internet penetration at home

Chapter 4 Connection methods, ISPs, and packages used

Chapter 5 General household use of the Internet

Chapter 6 Satisfaction with Internet service

Chapter 7 Internet use outside of the home

Chapter 8 Awareness of broadband services

Annex 1 February 2002 residential questionnaire

Chapter 1

Introduction

1.1 This report provides an overview of the key findings on consumer behaviour in the Internet market. These results are taken from the eighth wave of Oftel’s quarterly residential consumer survey conducted in February 2002. The survey was conducted amongst UK adults aged 15+.

1.2 The quarterly survey was conducted for Oftel by MORI amongst 2138 {footnote 1} UK adults during February 2002, of whom 46% claimed to have Internet at home. This report has been prepared by Oftel, {footnote 2} based on the results provided by MORI.

1.3 The report covers:

• Internet penetration
• usage of ISPs and packages
• time spent online
• satisfaction with overall service
• usage outside the home
• awareness of DSL/cable modem services

1.4 A copy of the questions is attached in annex 1. Topics to be researched each quarter are requested by Oftel project teams and results feed into current investigations and reviews in individual market areas.

Footnote 1 - The quarterly survey was conducted face to face in respondents own homes, 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 824 home Internet users is about 2-4%, but is higher amongst smaller subgroups. Results referred to as 'significantly' different, have been tested at the 95% level of confidence and hence are outside of the error margins and therefore can be considered real changes. 

Footnote 2 - The report should not be seen as recommending 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.

Chapter 2

Summary findings

Headline figures

• 50% UK adults use the Internet in a variety of locations
• 46% UK homes connected to the Internet
• 43% Internet homes currently using unmetered packages
• 3% Internet homes using broadband – according to recent subscriber figures
• 9 hours is the average weekly household time spent online

Little change in the residential Internet market over recent months

2.1 Currently 46% of UK households have Internet access and a further 4% claim to use the Internet from various locations, broadly unchanged since November 2001. Unmetered packages remain most popular – currently used by 43% of Internet households - and consumers continue to prefer PSTN/dial up access.

2.2 The overall profile of Internet households also remains broadly similar to recent quarters – the only real change since August 2000 being the steady rise in the proportion of C2DE households and lower income groups with Internet access.

First increase in time spent online since August ’01

2.3 The average weekly household time spent on line is currently 9 hours. This has increased from the average 8 hours reported since August 2001. We will continue to monitor this aspect of Internet usage to determine whether this is a real increase. Heavier users tend to be younger to middle age groups, larger households and higher income groups.

Satisfaction with overall Internet service remains stable

2.4 9 out of 10 households (89%) are satisfied with their overall Internet service. Those using subscription and calls packages are amongst those least satisfied with their service – perhaps this lower level of satisfaction is linked to the higher awareness of unmetered packages and faster access methods. In other words consumers may be less satisfied as they become aware of possibly cheaper and faster alternatives.

Over half of adults with home Internet access are aware of DSL or cable modem services

2.5 53% of adults with Internet access at home are aware of high speed broadband services such as DSL or cable modem. Awareness increases with usage – 68% of heavy users were aware compared to 49% amongst light Internet users. Awareness was highest amongst men, younger to middle age groups and higher income households. The most popular source of information on DSL/cable modem services was advice from friends and relatives.

Chapter 3

UK Internet penetration at home

3.1 Home Internet penetration remains broadly similar to that reported in November '01, up from 45% to 46% of homes connected to the Internet (approximately 11.5 million homes). This is shown in figure 3a.

3.2 PC ownership also remains broadly unchanged since last quarter, currently 54% of homes have PCs. The long-term trend shows that the gap between PC ownership and Internet penetration has been narrowing for some time but remains similar to that reported in November ’01, in other words, most of those who have a PC are already connected to the Internet.

Figure 3a: % UK homes with Internet access

Base: *UK homes, Feb ‘02 (Base: 2138)

* 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.

Internet usage outside the home

3.3 A further 4% of UK adults access the Internet from locations other than home. Combined with those accessing from home this equates to half of all adults using the Internet. There has been no change in this figure since August 2001. Further details on use of alternative access points are discussed in section 7.

Which consumers are connecting to the Internet at home?

3.4 PC ownership continues to follow a similar pattern to Internet penetration – most popular amongst younger to middle age customers and higher income groups – shown in figure 3b.

Figure 3b: % adult population with PC and Internet at home

Base: UK residential consumers aged 15+, Feb ‘02 (Base: 2138)

How is the profile of Internet homes changing?

3.5 The profile of Internet homes in terms of age, socio-economic and income profiles remains broadly similar to that reported in November ’01. There has been no real change in these profiles over recent months apart from the gradual rise in the number of C2DE households connecting to the Internet. Further change would be required before home Internet access more accurately reflects the distribution of the UK population.

Figure 3c: Changing profile of homes with Internet access

Base: UK homes with Internet access, Feb ‘02 (Base: 824)

Chapter 4

Connection methods, ISPs, and packages used

Method of connecting to the Internet at home

4.1 The vast majority (94%) of homes connected to the Internet, currently use a PC or laptop. Other methods used in homes with access to the Internet include access via mobile phones – currently 6% use this method, and digital television -used by 5% adults with Internet access at home.

4.2 In general most consumers accessing the Internet via a mobile phone, TV or other method such as a games console or personal organiser also access the Internet via PC.

4.3 Figure 4a shows the various types of access used by homes with the Internet. Ordinary phone line/dial up remains the most popular method, currently used by almost 9 out of 10 households (88%).

Figure 4a: Changing penetration of methods used by consumers to access the Internet at home

Base: UK homes with Internet access, Feb ‘02 (Base: 824, 6% ‘don’t knows’ have been excluded)

* not asked in November survey

4.4 2% of Internet homes claimed to use ADSL which is broadly in line with current subscriber estimates from BT and Kingston which estimate about 1% of Internet homes use ADSL. In total, estimates suggest about 3% Internet homes use cable modem or ADSL. However, 6% of Internet homes claimed to use cable modems which is higher than subscriber estimates from the cable companies which indicate that this figure should be about 2%. Despite the use of consumer-friendly explanations of these technologies in the survey, some consumers remain confused about the type of Internet connection they have. This is likely to occur increasingly with the introduction of lower speed ‘broadband’ services, and is to be expected given that the quarterly surveys are conducted amongst any Internet user in the home, and not necessarily the Internet decision-maker. There has been little change in these figures since August 2001.

Type of Internet package used

4.5 The upward trend in the use of unmetered packages continues this quarter currently standing at 43% amongst UK homes with Internet access as shown in figure 4b. This corresponds with the continuing decrease in use of calls only packages, which has halved since May ’00 (34% and 66% respectively).

Figure 4b: Main type of Internet package used at home

Base: UK homes with Internet access Feb ‘02 (Base: 824, 18% ‘don’t knows/none of these’ have been excluded)

ISPs used

4.6 Consumers with Internet access continue to be making use of a range of ISPs. Freeserve (21%), BT (20%) and AOL (17%) are the most popular ISPs within the residential Internet market. However the remaining significant 42% are choosing to use various other services providers for their Internet access. Figure 4c shows individual ISPs shares of the UK residential Internet market, this is based on all ISPs used.

Figure 4c: ISP share of UK residential homes with Internet access (based on all ISPs consumer use)

Base: All ISPs used in UK homes with Internet access, Feb ‘02 (Base: 824, 9% don’t knows have been excluded)

Figure 4d: ISP share of UK residential homes with Internet access (based on all ISPs consumers use)

Base: All ISPs used in UK homes with Internet access Feb ‘02 (Base: 824, 9% ‘don’t knows’ have been excluded)

( – Shares of less than 2%, included in the ‘Other’ category)

  Chapter 5

General household use of the Internet

Weekly time spent online

5.1 On average Internet homes are spending almost 9 hours per week online. This has risen slightly since last quarter (8 hours), which has been the average amount of time on line since August ’01 (7.5 hours). These figures however are inflated somewhat by a small proportion of heavy usage homes, and in fact around half of Internet homes spend less than five hours online each week. This is shown in figure 5a.

Figure 5a: Average weekly household time spent online

Base: UK homes connected to the Internet, Feb ‘02 (Base: 824)

5.2 Heavier users tend to be younger to middle age groups, higher social grades (ABC1) and larger households. Users of unmetered narrowband packages also tend to spend longer per week online than users of subscription and calls, or calls only packages. This is shown in figure 5b.

5.3 Household income does not largely affect the weekly amount of time spent on line. However, those with a low household annual income (up to £17,499) spend slightly more time using the Internet at home than those with a medium (£17,500-£29,999) to high (£30,000+) household income (9 hours amongst low income households, compared to 7 and 8 hours respectively).

Figure 5b: Average weekly household time spent online (hours)

Base: UK homes connected to the Internet, Feb ‘02 (Base: 824)

Chapter 6

Satisfaction with Internet service

6.1 Overall, 89% of Internet customers said they were satisfied with their home Internet service – unchanged since November 2001. This figure remains slightly lower than overall satisfaction with mobile 94% and fixed line services 91%.

Figure 6a: % homes satisfied with home Internet service

Base: UK homes with Internet access, Feb ‘02 (Base: 824, 9% ‘don’t knows’ have been excluded)

6.2 Younger consumers, higher social grades and households with higher incomes were amongst those most satisfied with their Internet service.

6.3 Dissatisfaction was prominent amongst users of subscription and calls packages (33% dissatisfied). Perhaps becoming less satisfied as awareness of unmetered packages and higher speed access increases.

6.4 Satisfaction did not vary greatly according to connection method however, in general those with higher speed connections such as cable modems/DSL connections or ISDN lines were slightly more satisfied with their overall Internet service than those using PSTN/dial up access.

Chapter 7

Internet use outside of the home

7.1 Half of UK adults currently claim to use the Internet in various locations. 1 in 5 (19%) currently access the Internet at work, this being the most popular access point other than at home. Men are significantly more likely to access the Internet at work than women (24% and 13% respectively). There has been little change in these figures since August 2001, 1% currently use various Internet cafés or kiosks and 2% access the Internet from libraries, as shown in figure 7a.

Figure 7a: % adults using Internet in various locations at least once a month

Base: UK residential consumers aged 15+, Feb ‘02 (Base: 2138)

7.2 Currently 16% of adults who don’t have access to the Internet at home claim to access the Internet elsewhere. However, alternative access points are generally more popular amongst customers who already have Internet access at home as shown in figure 7b.

Figure 7b: Adults use of Internet outside of home, at least once a month (prompted)

Base: UK residential consumers aged 15+ without Internet at home, Feb ‘02 (Base: 1262),UK residential consumers with Internet at home, Feb ’02 (Base: 894)

Chapter 8

Awareness of DSL and cable modem services

8.1 A third of all UK adults claimed to be aware of DSL or cable modem services. Awareness was highest amongst men, younger to middle aged groups, and higher income households. Unsurprisingly older consumers and DE social grades were amongst those who were unaware of DSL or cable modem services as they are also least likely to have access to the Internet at home.

Figure 8a: % aware of broadband services

Base: UK residential consumers aged 15+, Feb ’02 (Base: 2138)

8.2 Awareness of these types of high speed broadband Internet services rises to over half (53%) amongst adults with Internet access at home (as shown in figure 8a), and increases with usage – 68% of heavy users (more than 16 hours per week) were aware of DSL or cable modem services, compared to 49% of light users (up to 5 hours per week). Perhaps increased usage prompts consumers into finding out about alternative products compatible with their usage patterns. Consumers without Internet access have, unsurprisingly, lower than average awareness of these services.

8.3 Currently 63% of unmetered users are aware of DSL or cable modem services compared to 59% of those on calls only packages and 48% paying for calls in addition to a subscription – however, these differences are not statistically significant.

8.4 Generally, consumers currently using high speed Internet access at home are more aware of DSL or cable modem than those using PSTN/dial up access.

8.5 Recent Oftel research published in January 2002 into consumer perceptions of broadband services showed that the majority of broadband users were satisfied with their service. Current narrowband users who tested broadband services were impressed with the speed and ability to make voice calls over the same line but valued the always-on aspect less due to unmetered products being already available with narrowband services. The full report can be found at www.oftel.gov.uk/publications/research/2002/bban0102.pdf.

8.6 Of the 33% of consumers who had previously heard about DSL or cable modem services, most (95%) had used some source of information to find out about them. The main sources mentioned are detailed in figure 8b.

Figure 8b: % consumers used various sources of information on broadband

Base: UK residential consumers aged 15+ aware of broadband services (Base: 613)

8.7 A third of consumers aware of these services relied on advice from friends and relatives, which is consistent with findings from the broadband research referred to earlier, which also suggested that consumers generally felt that broadband had not been very widely publicised.

8.8 The second most popular source was via the media (again consistent with previous findings) magazines or newspaper articles were mentioned by almost 1 in 5 (17%) consumers who were aware. Various other sources were also cited but to a lesser extent, such as information from telecoms suppliers or direct from ISPs and a few mentioned television or radio (included in other category on chart above).

Annex 1

Q8 Internet questionnaire

Q1. Do you or does anyone in your household have access to the Internet/world wide web at home (via any device eg PC, TV, mobile phone)

Q2. Do you or does anyone in your household have a PC (by PC we mean laptop or any other computer)?

Q3. Which of these does your household use to access the Internet at home?

• PC/laptop
  
• TV
  
• Mobile phone/device
  
• Personal organiser/digital assistant
  
• Games console
  
• Other

Q4. Any which of these types of connection does your household use to connect to the Internet at home?

• Ordinary phone line/dial up access using a modem
  
• ISDN line – mid speed access which can allow voice calls at the same time as using the Internet
  
• High speed access via DSL – always on unmetered access, faster than an ordinary phone line which enables you to make voice calls at the same times as using the Internet
  
• High speed access via cable modem – always on unmetered access, offering various access speeds, faster than an ordinary phone line which enables you to make voice calls at the same time as using the Internet
  
• High speed access via another method – eg satellite, fibre optic, fixed wireless or leased line
  
• Other

Q5. Which Internet service provider does your household currently use (including free ISPs)?

Q6. Which of these statements best describes the package provided by your households main Internet service provider (ISP)?

• I/we pay monthly/annual subscription and cost of calls whilst online
  
• I/we pay no subscription fee and pay cost of online calls only
  
• I/we pay monthly/annual subscription which gives unlimited free usage, and pay no call costs
  
• I/we pay monthly/annual subscription which gives free usage at certain times or for certain amount of time, but pay for
• calls costs at other times

Q7. How many hours do you and members of your household spend using the Internet at home in a typical week?

Q8. Overall how satisfied are you with your home Internet service?

• Very satisfied
  
• Fairly satisfied
  
• Not very satisfied
  
• Not at all satisfied

Q9. Higher speed broadband Internet services such as DSL or cable modem allow you to be permanently connected to the Internet for a set (monthly) fee. You do not have to pay call charges for the time you spend online, and you can use the same line to make voice calls while you are using the Internet . Before this interview, were you aware of broadband services?

Q10. And what sources of information have you used, if any, to find out about broadband services?

Q11. In which if any of the following places do you use the Internet at least once a month?

• Your home
  
• Someone else’s home
  
• Work
  
• Internet café/shop/kiosk
  
• Library
  
• School/College/University/Other learning centre
  
• Community or voluntary organisation
  
• Somewhere else