Contents

Chapter 1 – Introduction

Chapter 2 – Summary

Main findings

Chapter 3 – Penetration and use of fixed telecoms in UK homes

Chapter 4 – Consumers’ use of fixed telecoms operators

Chapter 5 – Use of additional information sent with telephone bills

Chapter 6 – Awareness of changes to Directory Enquiries services

Chapter 7 – Use of public payphones

Annex A Q12 – February 2003 residential questionnaire: fixed telecoms questions

Chapter 1

Introduction

1.1 This report provides an overview of the key findings of consumer behaviour in the fixed telecoms services market, taken from the twelfth wave of Oftel’s quarterly residential consumer survey, conducted in February 2003. Results from previous waves are used for comparison purposes where appropriate and referred to throughout this report.

1.2 The report provides trend information and examines differences between consumers with different social characteristics.

1.3 The survey was conducted for Oftel by Recom (Research in Communications) amongst 2289 UK (see note one below) adults during February 2003, of whom 92% claimed to have a fixed line at home. The report has been prepared by Oftel (see note two below), based on the results provided by Recom.

1.4 This report covers:

• penetration of fixed home phones;
• use of fixed phone suppliers;
• attitudes to additional information received with phone bill;
• awareness of DQ changes; and
• use of public payphones.

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

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 and representative of cabled/non cabled areas, rural/urban areas, and levels of deprivation. Data has also been weighted to ensure the sample is representative of the UK adult population.

2. Because the surveys were 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 the total sample of 2289 consumers is about 1-2% but higher amongst smaller subgroups. 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. 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. 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 Recom or any decisions taken by any person in reliance on the report.

Summary findings

Headline figures

• 92% of UK homes have a fixed line phone;
• £74 was the average quarterly spend on fixed telecoms (inc. calls, rental, VAT);
• 97% of adults were satisfied with their fixed telecoms service overall;
• 55% of adults read information included with their phone bill at least occasionally and 10% have bought a product or service as a result;
• 40% were aware of changes to DQ numbers; and
• A quarter of adults claimed to use public payphones.

Significant rise in awareness of the introduction of new numbers for Directory Enquiries

2.1 New directory enquiry numbers were launched at the end of 2002. 38% of adults were aware that new numbers are going to be or had already been introduced, a rise from 9% in November 2002. However, few (5%) were aware of what the new numbers would be. Although a quarter knew the old 192 and 153 numbers will be withdrawn, so far only 1% claimed to have called one of the new DQ numbers.

Little change in overall fixed line market since last quarter

2.2 Fixed phone penetration remains at 92%. There has been a small decrease in the proportion of homes with a fixed line only, due to a rise in mobile penetration. Average quarterly spend remains virtually unchanged at £74.

2.3 Supplier usage has remained unchanged over the last couple of years. Currently 8 in 10 fixed line customers use BT for some or all of their fixed line services. 19% use one of the cable companies. Overall satisfaction remains high at 97%.

1 in 10 of those with a fixed phone at home have bought a product or service as a result of marketing information sent with their bill

2.4 Over half (55%) of fixed line customers had ever read additional information included with their phone bill. 1 in 10 had gone on to purchase a product or service as a result of this – BT customers were slightly more likely than cable customers to have done so. A quarter of those who had read the information had followed up on this by requesting more information about a product or service. Those with Internet were significantly more likely than those without to have read information included with their phone bill.

A quarter of UK adults use public pay phones

2.5 Just over a quarter (27%) of UK adults said that they use public payphones, at least occasionally. Payphone use appears to be decreasing – research conducted by Oftel in October 2002 amongst GB adults found that 4 in 10 (39%) claimed to use a payphone, which had fallen from 5 in 10 the previous year.

2.6 Groups most likely to use public payphones included those aged 15-34, and unsurprisingly those who have no fixed phone or mobile phone. Mobile only users were around twice as likely as those with a fixed line at home to use public payphones.

2.7 Just over 1 in 10 (12%) payphone users claimed that they used public payphones to make calls to freephone numbers to access prepaid calling card services – equating to 3% of all adults. 1 in 5 (19%) payphone users claimed to use a payphone to make calls to other freephone numbers (equating to 1 in 20 adults).

Main findings

Chapter 3

Penetration and use of fixed telecoms in UK homes

3.1 Fixed phone penetration amongst UK households has remained stable, since August ’02. The proportion of homes with a fixed line only has fallen this quarter to 16% from 19% in November 2002, as mobile penetration among homes with a fixed phone has risen. The proportion of homes without telephony remains at 1%.

Figure 3a: Penetration of fixed and mobile telephony in UK homes
Base: UK homes, Feb 03 (Base: 2289, less than 1% ‘don’t knows’ have been excluded)

3.2 The proportion of different groups of consumers without a fixed phone can be seen in figure 3b. The main groups where mobile only ownership was most prevalent were the 15-34 age group, the unemployed and those living in rented accommodation. 90% of households without a fixed phone have mobiles and 84% of these mobile-only homes used prepay. Previous Oftel research reported that one of the main reasons for having a mobile instead of the fixed phone was convenience and the ability to control costs via prepay. 

Figure 3b: % UK consumers without a fixed line phone
Base: UK residential consumers aged 15+, Feb ‘03 (Base: 2289)

Average spend on fixed telecoms services

3.3 Consumers spent on average £74 per quarter on their home fixed phone services – this figure has remained at around £75 - £80 for the last year. The average is inflated however, by the small proportion of customers spending over £150 per quarter and indeed just over half spend less that £70 per quarter.

3.4 Average quarterly spend on fixed telecoms amongst different consumer groups is shown in figure 3c, and is related to the obvious characteristics including income, household size, and use of additional services such as Internet. Spend has remained broadly similar amongst most groups since last quarter.

Figure 3c: Average quarterly fixed telecoms spend, including rental, calls, metered Internet usage & VAT
Base: UK residential fixed phone customers aged 15+, Feb ‘03 (Base: 2108, ‘don’t knows’ have been excluded)

Chapter 4

Consumers’ use of fixed telecoms operators

4.1 Supplier usage has remained broadly unchanged over the last couple of years, as shown in figure 4a. Use of ‘other‘ suppliers fell between November 2001 and August 2002 and has remained stable since, at around 2-3%.

4.2 In total, 8 in 10 (81%) fixed phone customers used BT for access and some, if not all, of their calls. The remaining 19% used cable — broadly consistent with market shares shown in Oftel’s Market Information based on the number of lines.

Figure 4a: Residential supplier usage
Base: UK residential fixed phone customers aged 15+, Feb ‘03 (Base: 2108, 1% don’t knows have been excluded)

Satisfaction with fixed telecoms

4.3 Overall satisfaction with fixed telecoms services remains stable and stands at 97%, slightly but significantly higher than the Internet market (91%). Satisfaction with the reliability of fixed line services also remains stable (97%). Satisfaction with value for money has risen from 81% last quarter to 85% in February 2003, as shown in figure 4b. The rise in satisfaction with value for money is apparent amongst all groups with particularly marked increases amongst high income households. There have been no substantive price changes during this period. 

Figure 4b: Satisfaction with home fixed phone service
Base: UK residential fixed phone customers aged 15+, Feb ‘03 (Base: 2108, don’t knows have been excluded)

Chapter 5

Use of additional information sent with telephone bills

5.1 As shown in figure 5a, 55% of consumers with a fixed line phone claimed to read the additional information that comes with their phone bill – at least occasionally. The proportion of BT customers that read this type of information was significantly higher (57%) than amongst cable customers (49%), although the proportion who ‘always’ read this was broadly similar at about 1 in 7.

Figure 5a: % UK consumers who read additional information included with phone bill
Base: UK residential fixed phone customers aged 15+, Feb ‘03

5.2 Those most likely to have read additional information sent with their phone bill were, aged 55+, AB social grades and heavy spenders. Those with Internet at home (58%) were significantly more likely to have read information sent with their phone bill than those without Internet (52%).

5.3 19% of those who had ‘ever’ read information with their bill claimed to have bought a product or a service after reading this information – this equates to 10% of all fixed line customers. Those most likely to have made a purchase include the middle-aged, higher income groups and heavier spenders. BT customers (11%) were slightly more likely than cable customers (7%) to have bought a product or service after reading information included with their phone bill. 14% of all those with Internet at home had bought a product or service after reading information enclosed with their phone bill (the product or service was not necessarily Internet related).

5.4 25% of those who read the information included with their bill had requested more information on a product or service – this equates to 14% of all fixed line customers. Those most likely to have requested further information included the middle-aged, higher income groups and heavier spenders. There was no significant difference in likelihood to have requested further information between BT and cable customers, as shown in figure 5b. 1 in 5 (19%) of all those with Internet at home had requested further information on a product or service (again, not necessarily about an Internet related product or service).

Figure 5b: % UK consumers who took action after reading information received with their phone bill
Base: UK residential fixed phone customers aged 15+, Feb ‘03 (Base: 2108)

5.5 Those that had read information included in their phone bill but had not taken follow up action, were asked why they had not done so. As figure 5c shows, the most common reason given was there being nothing interesting enclosed, cited by 44%. Other reasons given included, having no need for additional service or products (28%), having no need for additional information (26%) and 7% claimed never to buy anything from direct mail. Cable customers were less likely than BT customers to say that nothing interesting was enclosed.

Figure 5c: Reasons why never contacted telephone supplier about information included with phone bill
Base: UK residential fixed phone customers aged 15+ who had read information included with bill but did not buy anything or request any further information , Feb ‘03 (Base: 790)

Chapter 6

Awareness of changes to Directory Enquiries services

6.1 At the end of 2001, Oftel announced plans to replace the existing national (192) and international (153) directory enquiries (DQ) services with a range of new numbers. Previously, consumers were most likely to use the DQ service provided by their network operator, as only network operators had access to the ‘192’ DQ number. The new arrangements mean that consumers have an easy choice of DQ service provider no matter what network they use, and that all DQ service providers will be competing on a level playing field as regards the number used to access their DQ services

6.2 In late 2002, new numbers in the range 118XXX were introduced for directory enquiries services. These are available in conjunction with the exiting 192 and 153 DQ services until August 2003, when 192 and 153 will no longer connect to DQ services.

6.3 These changes are expected to lead to the introduction of a range of new services using short telephone numbers, such as call completion facilities where the operator can connect people directly to the number they have requested, or services in a range of languages for people whose first language is not English and visitors from overseas. In fact, some of these new services are already available. The presence of new firms in the market should promote competition in quality of service and on price, encouraging better customer service and lower prices.

Awareness of introduction of new numbers

6.4 17% of UK consumers said they were aware that new numbers for Directory Enquiries and International Directory Enquiries have already been introduced. A further 21% were aware that new numbers are being introduced, but did not realise they already had been. The total proportion aware of the introduction does not match the total figure in 6a due to rounding.

6.5 Awareness has increased significantly since the launch of the new numbers. In November ’02, just 9% of adults were aware that the new numbers were going to be introduced, compared with 38% in Feb 2003 aware that the new numbers were going to be or had already been introduced.

6.6 Awareness was highest among AB social groups and higher income households. There were no significant differences in awareness according to supplier, standing at 41% among BT customers and 37% among cable customers.

Awareness of what the new numbers will be

6.7 Of those aware that new numbers are being introduced, 13% knew that the 118 prefix is going to be used for the new DQ services. This equates to 5% of all adults. This is a significant increase from before the launch – in November ‘02 less than 1% were aware. It should be noted that no advertising of the new numbers was permitted prior to their introduction in December, so that consumers did not suffer problems in dialling these numbers whilst they were being tested.

6.8 Men, younger consumers, higher social grades and income groups were most likely to know the 118 prefix. Those in the London region were significantly more likely than all other regions to know this prefix.

Figure 6a: Awareness of the forthcoming changes to DQ
Base: UK residential consumers aged 15+, Feb ‘03, (Base: 2289)

Awareness of the old numbers being withdrawn

6.9 A quarter (26%) of UK adults knew that the old 192 and 153 numbers are going to be withdrawn, up from 6% in November 2002. Again, awareness was highest among AB social groups, higher income households and those with Internet at home (this may be linked to the profile of homes with Internet). Of those that were aware of the numbers being withdrawn, the majority (69%) were unsure when it is happening. 27% knew it is happening in 2003 (6% narrowed it down to August/ summer 2003), and 3% thought it is happening in 2004. This equates to 7% of all consumers aware that the existing DQ numbers, 192 and 153, will be withdrawn this year.

6.10 As shown in figure 6a, overall, 4 in 10 consumers were aware that new numbers are being introduced and/or the old numbers are being withdrawn. A quarter were aware of both, but the majority of these were still unclear as to what the numbers are changing to and when the old numbers will be withdrawn. However there have been significant improvements in awareness since last quarter.

Sources of awareness of the DQ changes

6.11 The four main sources where consumers had become aware of the DQ changes are TV (31%), the press (17%), radio (16%) and their phone bill (9%) (whether BT or another phone company).

6.12 Less common sources included, 6% stating that they heard from BT, 5% from direct mail, 5% from word of mouth, and 4% heard about the changes from their phone company.

6.13 Other sources mentioned included through work, the Internet, their mobile phone, telephone directory and in a telephone box.

Use and planned use of new numbers

6.14 1% of all consumers said that they had already called at least one of the new numbers, and 1 in 10 (12%) said that they would do so the next time they needed to use directory enquiries. Amongst those previously aware that the new numbers were already available 2% had used a new number, and nearly a quarter (22%) said that they would do so next time they needed to call directory enquiries. Those most likely to have already called the new numbers, or planned to next time they need to use directory enquiries, include AB social groups, higher income households, and those living in London.

6.15 1 in 10 said that they would only start to use the numbers when the old ones are withdrawn, and 1 in 5 (22%) said that the next time they used directory enquiries they would still call 192 or 153. 4 in 10 (42%) said that they would still call the old numbers because they did not know what the new numbers are. 

Figure 6b: Use and planned use of new DQ numbers
Base: UK residential consumers aged 15+, Feb ‘03, (Base: 2289)

Chapter 7

Use of public payphones

Frequency of use

7.1 Just over a quarter (27%) of UK consumers claimed that they used public phone boxes. This compares to 39% of GB adults who claimed to use a payphone in October ’02. Groups most likely to, at least occasionally, use public phone boxes included those aged 15-34, and unsurprisingly, those without a fixed or mobile phone. About half of mobile only homes used payphones, around twice as likely as those with a fixed phone.

Figure 7a: Frequency of payphone use
Base: UK residential consumers aged 15+, Feb ‘03, (Base: 2289)

7.2 During February ’03, just over 1 in 10 (12%) public payphone users claimed to use a payphone to make calls to freephone numbers to access prepaid calling card services – 2% claimed to do so frequently and 10% ‘sometimes’. This equates to 3% of all UK adults.

7.3 1 in 5 (19%) payphone users claimed to use a payphone to make calls to other freephone numbers – 1% frequently and 18% ‘sometimes’. This equates to 1 in 20 UK adults.

  Annex A

Q12 February 2003 residential questionnaire – Fixed phone questions

Base: All adults
Q1. Do you have a fixed line phone in your home?

Yes
No
Don't know/no answer

Base: All with a fixed phone
Q2. Which of these types of companies on this card do you/your household use for your home fixed line telephone services? If you use more than one fixed line supplier, please let me know what type of company each supplier is. Please do not count mobile phone companies.

BT
NTL
Telewest
Cable (if name not known)
Someone else not BT or NTL or Telewest (write in)

Base: All with a fixed phone
Q3 How satisfied are you with the following?

Very satisfied
Fairly satisfied
Not very satisfied
Not at all satisfied

Your fixed line telephone service overall
Reliability of your fixed line telephone service
Overall value for money from your fixed line telephone service

Base: All with a fixed phone
Q4. Approximately how much would you estimate your TOTAL household spend per quarter on telecoms services is for all telecoms suppliers used (including line rental, any other charges and VAT) but EXCLUDING mobile phone costs?

Base: All adults
Q5. How often, if at all, do you use a public payphone? By public payphone, I mean public phone boxes, not payphones in hotels, bars, restaurants or residential accommodation.

Every day
At least once a week
At least once a month
A few times a year
Less than once a year
Never

Base: All who use a payphone
Q6. How often, if ever, do you use a public payphone for the following purposes? Please tell me whether it’s Frequently, Sometimes or Never.

Calls to freephone numbers to access prepaid calling card services
Calls to other freephone numbers

Base: All adults
Q7. New numbers for directory enquiry services have recently been introduced. Which of the following best describes whether you were aware of this before now?

I was aware that new numbers were being introduced but was not aware that they were already available
I was aware that new numbers had already been introduced
I was not aware that new numbers were being introduced

Base: All aware of introduction of new DQ numbers
Q8. Do you know what the new numbers for directory enquiries are?

Yes – 118 (xxx) any mention of this
Yes – Other number mentioned
No

Base: All adults
Q9. The national 192 and international 153 Directory Enquiries numbers will be withdrawn from service. Before now, were you aware of this? SINGLE CODE

Base: All aware of withdrawal of DQ numbers
Q10. Do you know when these numbers (192/153) are going to be withdrawn from service?

Summer / August 2003
This year
Next year
In 2 years time
Other
Don’t know

Base: All aware of withdrawal of old numbers of introduction of new
Q11. Where did you hear about the changes that are currently being made to the directory enquiry services?

Base: All adults
Q12. Which of the following best describes whether you have already called or plan to call any of the new directory enquiry numbers?

I have already called at least one of the new 118 directory enquiry numbers
I have not needed to call directory enquiries yet but will call the new 118 numbers the next time I do
I have not needed to call directory enquiries and the next time I do I will still call 192 or 153
I will only start using the new 118 numbers when the old ones are withdrawn
I do not know what the new numbers for directory enquiries are so will still call 192 or 153 when I need to

Base: All with a fixed phone
Q13. How often, if at all, do you read the additional information that comes with your phone bill?

Always
Sometimes
Rarely
Never

Base: All who read additional information
Q14. Have you ever done either of the following after reading the information that came with your phone bill?

Bought a product or service
Requested more information on a particular product or service

Base: All who did not buy or request information
Q15. Why have you never contacted your telecom supplier about any of the information that came in your phone bill?