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Consumers' use of Internet Oftel residential survey – Q12 February 2003 – Published 12 May 2003
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Contents

Chapter 1 Introduction

Chapter 2 Summary findings

Main findings

Chapter 3 UK home Internet penetration, usage, and planned take-up

Chapter 4 Connection methods, ISPs, packages used, and response to price changes

Chapter 5 Satisfaction with home Internet services

Chapter 6 Broadband customers, and planned take-up

Chapter 7 PSTN Internet customers’ interest in broadband

Annex A February 2003 questionnaire and ad hoc broadband questionnaire

Annex B Topline results for broadband customers excluding ntl 128k service


 Chapter 1

Introduction

1.1 This report provides an overview of the key findings of consumer behaviour in the Internet market, taken from the twelfth wave of Oftel’s quarterly residential consumer survey, conducted in February 2003. Results from previous research 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. The sample and methodology were changed in May ’02. For information on these changes and the effect on the results, see Annex B in http://www.oftel.gov.uk/publications/research/2003/q11intr0103.htm.

1.3 The quarterly survey was conducted for Oftel by Recom (Research in Communications) amongst 2289 UK adults (see note one below) during February 2003, of whom 45% claimed to be connected to the Internet at home. In addition, an ad hoc survey was conducted by Continental Research amongst 250 broadband customers (see note two below) during February 2003. Findings from both surveys are discussed in this report, which has been prepared by Oftel (see note three below) based on the results provided by Recom and Continental Research.

1.4 his report covers:

  • Internet penetration, time spent online;
  • Non-users interest in getting Internet, and barriers to take-up;
  • Connection methods, packages, and ISPs used;
  • Amount spent on Internet services, and potential reaction to price rises;
  • Payment and billing preferences; and
  • Satisfaction with Internet services;
  • Broadband customers – drivers of broadband take-up and ISP choice, perceived benefits and value of broadband compared with previous access methods; and
  • PSTN Internet customers’ interest in broadband, and barriers to take-up.

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.

1.6 Please note that in this report ‘broadband’ refers to customers using ADSL or cable modem services at speeds of 128k and above. Narrowband refers to any ISDN and PSTN Internet services (ordinary analogue phoneline), and unmetered includes those on fully unmetered (ie 24/7 access) and partly unmetered (ie a certain number of unlimited hours or certain periods of time unlimited eg evenings / weekends). Separate topline results from the ad hoc survey, excluding ntl 128k customers, are shown in annex B.

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.

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 total sample of 2289 consumers is about 1-2%, and for 250 broadband users is around 4-6% but higher amongst smaller subgroups.

2.This survey was conducted amongst 250 adults responsible for the household's broadband decisions. The survey was conducted amongst 50% ADSL customers and 50% cable modem customers to ensure sufficiently large samples for individual analysis, however the overall results were weighted to 40% ADSL and 60% cable modem to represent the current residential split in the broadband market based on industry subscriber figures provided to Oftel.

3. 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, and Continental or any decisions taken by any person in reliance on the report.


Chapter 2

Summary findings

Headline figures

  • 45% UK homes have Internet
  • 14% Internet homes using broadband
  • Average Internet home spending 10 hours online each week
  • 91% Internet homes satisfied with their overall service

Rise in Internet penetration, after months of stability

2.1 Home Internet penetration has risen to 45% since November 2002, having previously been stable at about 42% during the previous nine months. PC ownership rose insignificantly, indicating that this recent rise in Internet was driven primarily by homes who previously had a PC.

Cost barriers to Internet access for 1 in 5 homes, and significant minority still not interested in Internet

2.2 A further 1 in 10 homes thought they were likely to get Internet in the next 12 months. 1 in 5 homes were deterred by cost barriers (primarily the cost of equipment), and a similar proportion were not interested in Internet for other reasons (mainly perceptions of lack of need).

General Internet usage continues to rise

2.3 General household time spent online continues to rise, up by two-thirds during the last three years, currently the average Internet home spends 10 hours online each week. This ranges from 5 hours in metered homes, to 18 hours in broadband homes. In total about 3 in 10 Internet homes have the ability to make calls at the same time as using the Internet (either via broadband, ISDN, or multiple PSTN lines).

Broadband ISP choice driven by cost and familiarity, majority are not attracted by single billing

2.4 General advertising was the main source of information about broadband suppliers, few customers had been contacted directly by their ISP either via phone or information with their phonebill.

2.5 Cost and familiarity (ie using the supplier already) were the main drivers of ISP choice, with significant differences between BT and cable customers. 3 in 10 Internet customers said they would prefer a single phone / Internet bill. This was significantly lower amongst broadband customers, the majority of whom had not considered this when deciding which ISP to use.

At least 4 in 5 broadband customers would tolerate a 10% price increase

2.6 Broadband penetration continues to rise, currently 14% of Internet homes use broadband. Most broadband customers had upgraded from unmetered narrowband services. Although speed primarily drives the initial decision to get broadband, once connected customers experience and value the benefits of simultaneous usage, permanent connection, and enhanced content. 4 in 5 broadband customers claimed they would continue to use broadband if prices rose 10%. The perceived value of the faster speeds was the main reason for this decision.

More interested in getting broadband, other would want lower prices

2.7 A quarter of PSTN Internet customers thought they might get broadband at current prices. Cost and light Internet usage were the main reasons for not getting broadband. A third of all Internet homes were unsure what price if any would attract them to broadband, and of the quarter who thought they might consider broadband at a lower price, most said it would need to fall to under £20. This figure however is deflated by light users, and does not necessarily reflect realistic perceptions of an acceptable price.

Improvements in satisfaction with speed, reliability and value for money, as more move to broadband

2.8 Overall satisfaction with Internet services remains stable at just over 9 in 10, whilst satisfaction with speed, reliability and value for money all experienced slight improvements on last quarter, partly due to increasing broadband take-up.

 


Main findings

Chapter 3

UK home Internet penetration, usage, and planned take-up

3.1 Home Internet penetration rose between November 02 and February 03, to 45%, having been at a plateau of about 42% during the last nine months, as shown in figure 3a. PC ownership rose insignificantly, suggesting that this recent rise in Internet was driven primarily by homes who already had a PC.

Figure 3a: % UK homes with Internet access
Base: *UK homes, Feb ‘03 (Base: 2289)

* 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.

3.2 Internet and PC penetration remains closely related to age and income, most popular amongst younger and middle age groups, and higher income groups, as shown in figure 3b. This most recent rise in penetration however, has been driven primarily by middle age and income groups. 

Figure 3b: % homes / adult population with PC and Internet at home
Base: UK homes / residential consumers aged 15+, Feb ‘03 (Base: 2289)

* Nb. GB only - Deprivation index is based on a composite score of the level of unemployment, overcrowding, non-car ownership and non-home ownership in an area. The index is only available for the UK mainland (ie excluding Northern Ireland) this quarter. 46% of GB adults are classified as living in areas of low deprivation, 47% in areas of medium deprivation and 7% in areas of high deprivation.

Interest in getting Internet at home, and barriers to take-up

3.3 A further 1 in 10 (11%) homes thought they were likely to get Internet access in the next 12 months, as shown in figure 3c. Interest was highest amongst younger consumers, higher income groups, and larger households. It was also significantly higher amongst the 1 in 10 homes who already have a PC – about half of this group thought they would get Internet access in the next 12 months. Some caution should be applied to questions on future behaviour as actual take-up rates often fall short of claimed intentions. However, in February 2000, 15% of homes thought they would get Internet access within the next 12 months, and indeed a year later penetration had risen 12% points.

3.4 4 in 10 homes thought they were unlikely to get the Internet at home in the next 12 months. Reasons included not having a PC (mentioned by 45% of those not likely to get the Internet at home in the next 12 months) and being unable to afford the equipment (10%), not needing to use the Internet (33%), and not knowing enough about it (13%). 3% didn’t need it at home as they had access elsewhere. In total, about a fifth of all homes mentioned what might be considered cost barriers to getting home Internet access, which included not having a PC, inability to afford equipment or usage costs, or waiting for these costs to fall, as shown in figure 3c.

3.5 Those hampered by these costs tended to be younger and lower income groups. In comparison, those claiming to have no need or interest in the Internet were older, and less likely to have mobile phones, but had average income levels and fixed telecoms spend, confirming that cost would not seem to be an underlying barrier.

3.6 This is broadly unchanged since February 2001, when cheaper equipment and usage costs were identified as the main factors that would encourage take-up. The main change during the last two years has been the drop in the proportion of consumers claiming they don’t need home Internet, falling by about half during this period, equivalent to about 15% of homes at present. 

Figure 3c: Home Internet penetration and barriers to take-up
Base: UK homes, Feb ‘03 (Base: 2289)

Time spent online

3.7 The average amount of time households spend online each week has been rising steadily over the last 3 years, up by two-thirds since May 2000, as shown in figure 3d. Currently about 10 hours per week, the rise since last quarter is consistent with the growing number of homes using unmetered packages and their heavier usage. The vast majority of broadband customers claim to go online on an almost daily basis and average about 18 hours per week, compared with 13 hours in unmetered narrowband households and 5 hours in metered households, as shown in figure 3d. It should be noted however that the weekly average is inflated by about a third of households who are heavy Internet users, and in fact half of Internet households spend less than 6 hours online each week.

Figure 3d: Average weekly household time spent online (hours)
Base: UK homes with Internet access, Feb ’03 (Base: 986)

3.8 Younger to middle age groups, larger homes (ie with more users), and the DE social groups remain the heaviest users. As reported in previous quarters, whilst DE groups are less likely than average to have home Internet access (see figure 3b), once online they tend to be slightly heavier users than their peers.

 


 Chapter 4

Connection methods, ISPs, packages used, and response to price changes

Access method

4.1 Use of narrowband Internet access continues to fall as consumers switch to broadband access as shown in figure 4a. Just less than 8 in 10 Internet homes currently connect via their ordinary phoneline using dial-up access, compared with 88% a year ago. There has been a corresponding rise in use of faster access methods such as ADSL and cable modem, confirmed by Industry subscriber figures which indicate about 14% of Internet homes have broadband. The survey currently estimates that about 17% of Internet homes have broadband, only marginally higher than subscriber estimates, the difference being largely within the error margins of the survey.

4.2 Use of narrowband Internet access packages has remained fairly stable over the last year, currently 25% use metered packages, 38% use unmetered and about 16% use narrowband but are unsure whether their package is metered or unmetered, as shown in figure 4b. This latter proportion has been falling over the last year, which is probably a reflection of increasing familiarity with the different types of Internet package available. The figure remains high however as the person responsible for the Internet decisions in the home is not always the person interviewed (as this survey is representative of UK adults, not Internet decision-makers).

4.3 16% of PSTN Internet customers have a second line enabling them to make calls at the same time as using the Internet. There was little difference between metered and unmetered customers. This equates to 12% of all Internet homes, and added to broadband and ISDN which provide simultaneous usage, totals about 3 in 10 Internet homes with the ability to make calls at the same time as using the Internet.

 Figure 4a: Penetration of methods used by consumers to access the Internet at home
Base: UK homes with Internet access, Feb ’03 (Base: 986)
NB 3% of homes were unsure what type of Internet connection they used and are not shown on the chart

 

Figure 4b: Type of Internet package used
Base: UK homes with Internet access, Feb ’03 (Base: 986)
NB 3% of homes were unsure what type of Internet connection they used and are not shown on the chart

ISPs used

4.4 Consumers with home Internet access continue to be making use of a range of ISPs. BT, Freeserve, and AOL remain the most widely used in the residential Internet market, and figure 4c indicates a fairly stable situation over recent months.

Figure 4c: 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 Nov ‘02 (Base: 996, 7% ‘don’t knows’ have been excluded)

NB this is not the same as the proportion of consumers using each ISP as some households are using more than one ISP. Results are only indicative of ISP shares.

Aug ‘00

Aug ‘01

Nov ‘01

Feb ‘02

May ‘02

Aug ’02

Nov ’02

Feb ‘03

Freeserve

27%

19%

21%

21%

20%

20%

19%

21%

BT

15%

18%

16%

20%

23%

18%

22%

20%

AOL

10%

16%

15%

17%

20%

19%

19%

17%

NTL (includes cable and Wireless)

8%

9%

11%

13%

12%

17%

14%

13%

Tiscali (including Tiny Online and Lineone from May ’02 onwards)

-

-

3%

2%

5%

4%

4%

6%

Virgin Net

3%

3%

3%

2%

3%

4%

3%

4%

Others

23%

25%

22%

18%

15%

18%

19%

18%

Total

100%

100%

100%

100%

100%

100%

100%

100%

Amount paid for broadband and unmetered narrowband

4.5 PSTN Internet customers using unmetered packages claim to pay on average £14 per month for their Internet service – this includes those on fully unmetered packages (ie 24/7 access), and those on partly unmetered packages (ie unlimited use at certain times, or a set number of hours).

4.6 Broadband customers in comparison claim to pay about £22 per month on average for their service. ADSL customers estimated their monthly cost to be about £26 on average, compared with cable customers whose average spend was about £20. This lower cable spend is consistent with the lower speed (128k) / lower cost ‘broadband’ services offered by ntl (which cost about £15 per month). ADSL customers using BT as their ISP claimed to pay about £30 per month for their service compared with those using other ISPs over ADSL who paid about £23. These estimates are consistent with current market prices indicating that customers appear to have a fairly good idea of how much they are paying for their broadband services.

Potential response to price increases

4.7 Broadband customers and PSTN Internet customers using unmetered access were asked about the ways in which they might change their Internet usage if prices were to rise by 10% and by 50%. This type of result should be treated with some degree of caution as it is speculative, asking people to predict what they might do, and therefore may not accurately reflect the reality of what would happen if prices did change. Actual behaviour would depend amongst other things on customers noticing changes to prices and making the effort to change – it is well known that the level of claimed switching intentions is rarely achieved in practice. This type of questioning however, can give a useful guide to the minimum number of customers who would not switch following price changes, and their reasons for not doing so.

Unmetered PSTN

4.8 In response to a 10% rise, just over half of PSTN unmetered Internet customers said they would continue to use this access / package. Almost 1 in 5 said they would switch to a different type of access (10% would upgrade to broadband, and 8% would switch to metered access). Following a 50% increase, those loyal to PSTN unmetered access fell to just 6%. About 3 in 10 would switch to another package (16% to broadband, and 12% to metered access). The remainder were unsure what their reaction would be, or thought they might stop using the Internet at home. This is shown in figure 4d. Those who said they would consider switching to broadband at a 10% rise in PSTN unmetered prices were younger and higher income groups.

Figure 4d: Proposed behaviour in response to price increases
Base: UK homes with PSTN unmetered Internet access (Base: 364), Feb ’03

Broadband

4.9 In comparison, broadband customers were more loyal to their access method, with 4 in 5 claiming they would continue to use broadband if prices rose 10%, falling to a third at a 50% price rise. The main reason for this loyalty was the perceived value of the faster speeds. Just over half said this was the reason they would continue to use broadband, even at a 50% price rise, which is consistent with perceptions of the main reasons for getting broadband, the main benefits noticed since adoption, and the most valued aspect of the service, all discussed in chapter 6. About a fifth each mentioned the value of the permanent connection and the simultaneous phone / Internet usage as reasons why they would not switch away from broadband if prices rose.

4.10 Given a 10% price increase, only 1 in 10 broadband customers thought they would switch to narrowband, mostly to unmetered access, rising to 4 in 10 at a 50% price increase.

4.11 About half of those claiming they would switch to narrowband said they would get a second line (32% definitely, 15% maybe). This equates to about 1 in 5 broadband homes who would switch to narrowband with 2 lines. This is consistent with broadband customers’ heavier Internet usage and the perceived value of being able to make and receive calls at the same time as using the Internet.

Figure 4e: Proposed behaviour in response to price increases
Base: UK broadband decision-makers, Mar ’03 (Base: 250)

Internet customers’ payment and billing preferences

4.12 When asked about billing and payment preferences for their home Internet service 8 in 10 Internet customers expressed a preference for a particular method. 4 in 10 (39%) said they would prefer a direct debit payment to be taken automatically from their bank account or credit card. 3 in 10 (29%) preferred to be billed for their Internet service on their ordinary phonebill which they would then pay by their normal method, and 12% preferred a completely separate bill which they would pay by their chosen method. This is shown in figure 4f.

4.13 Fewer broadband customers expressed preference for their broadband charges to appear on their phonebill (17% vs 29% average), preferring instead a direct debit from their bank or debit card.

Figure 4f Billing / payment preferences for Internet services
Base: UK homes with Internet access, Feb ’03 (Base: 986)


Chapter 5

Satisfaction with home Internet services

5.1 In February 2003, 9 in 10 (91%) of Internet customers were satisfied with their overall service. Satisfaction has remained stable during the past couple of years, as shown in figure 5a, at a level slightly below satisfaction with fixed and mobile services.

5.2 Satisfaction with speed and reliability of service improved marginally this quarter, possibly a result of increasing broadband take-up. 9 in 10 customers were satisfied with value for money of their home Internet service, again a slight improvement on last quarter.

Figure 5a: Satisfaction with home Internet service
Base: UK homes with Internet access, Feb ‘03 (Base: 986, ‘don’t knows have been excluded)

5.3 Internet customers remain least satisfied with the speed of access which has been consistently lower than other aspects of service. Narrowband unmetered customers were least satisfied with this aspect of their service, which probably reflects their heavy usage in comparison to those using metered packages, who are lighter users, and therefore potentially less affected by or concerned with speed. Satisfaction with speed rises significantly amongst those consumers using broadband Internet access. Broadband customers remain most satisfied with all aspects of their Internet service as shown in figure 5b.

Figure 5b: Satisfaction with aspects of home Internet service
Base: UK homes with Internet access, Feb ‘03 (Base: 986, ‘don’t knows have been excluded)

 

Average

Narrowband unmetered (PSTN/ISDN)

Narrowband metered (PSTN/ISDN)

Broadband

Overall Internet service

91%

89%

93%

97%

Quality and reliability

88%

88%

89%

95%

Speed

74%

66%

70%

94%

Value for money

90%

89%

90%

91%


Chapter 6

Broadband customers (ADSL / cable modem of 128k and above)

Reasons for getting broadband

6.1 Faster Internet access was the main reason for getting broadband Internet access for 7 in 10 (69%) broadband customers. Significantly fewer mentioned simultaneous use (ie the ability to make phone calls at the same time as using the Internet), or the permanent connection (ie not having to dial up each time) amongst their main reasons for getting broadband. However, as discussed in paragraph 6.12, whilst these are not necessarily appreciated prior to adoption, they appear to become more valued once consumers get used to having these features. These results are consistent with those reported in November 2002, which also contains information on what broadband customers were using their service for.

Figure 6a: Reasons for getting broadband services
Base: UK broadband decision-makers, Mar ‘03 (Base: 250)

 

Choice of broadband supplier

6.2 According to industry subscriber figures, approximately 2 in 5 residential broadband customers use ADSL services and the remainder use cable modem. ADSL customers have a choice of a number of ISPs in addition to BT, and of those using cable, approximately two-thirds use ntl and a third Telewest.

6.3 Cost and familiarity / convenience were the main drivers of ISP choice as shown in figure 6b. In total just under half (46%) of broadband customers mentioned costs, including usage, installation, and special deals. A similar proportion (44%) said they already used their broadband supplier for their home phone or previous Internet service. This was significantly higher among cable than BT customers however, at 54% and 30% respectively. BT broadband customers tended to be driven more by special deals, perceptions of reliability and customer service, and the trustworthy brand name, as did those using alternative ADSL ISPs. Cable customers on the other hand were more likely to mention cost as well as the familiarity / convenience of already using the supplier.

Figure 6b: Reasons for choice of broadband ISP (spontaneous mentions)
Base: UK broadband decision-makers, Mar ‘03 (Base: 250)

Importance of broadband billing arrangements

6.4 Just over 7 in 10 (71%) broadband customers used the same supplier for their ISP and home phone services (BT, ntl, Telewest). Two-thirds (68%) of these customers using said they were billed for their broadband service on their ordinary phone bill (equivalent to just less than half – 48% – of all broadband customers). Single billing was significantly higher amongst cable (74%) than BT customers(45%). The remainder were billed separately for their broadband service either via direct debit, or a separate bill.

6.5 When asked about preferred billing method, as discussed in chapter 4, broadband customers were less likely than average to express preference for a joint broadband / phone bill (17% vs 29% average preference for a single bill). Previous research conducted by Oftel in August 2002 found that 1 in 10 narrowband customers interested in upgrading to broadband said they would choose a supplier offering a one-bill service, although the majority said they would not select a more expensive broadband service simply because it offered this convenience.

6.6 When asked about reasons for their choice of ISP only one broadband customer spontaneously mentioned a single bill. However, when prompted, of the half of broadband customers who receive a single broadband / phone bill, 1 in 5 (equivalent to about 10% of broadband customers) said ability to provide a single bill was one of the most important factors in deciding which ISP to use. For the remainder, single billing was not the key driver of their ISP choice as shown in figure 6c. This is consistent with research conducted in November 2002. Single billing was important to twice as many cable as BT customers.

Figure 6c: Importance of single billing in ISP choice
Base: UK broadband decision-makers, Mar ‘03 (Base: 250)

Where heard about ISP’s broadband service

6.7 General advertising (direct mail, poster, radio, newspaper and TV ads) was the main means by which broadband customers became aware of their ISPs broadband service, as shown in figure 6d. 15% of customers said they read about the service in information sent with their phonebill, and 10% said their ISP had called them about the service. Only 1% said they had phoned their ISP about something else and were told about the broadband service at this point.

6.8 Again there were differences between BT, cable, and other ISP broadband customers. BT customers were more likely to quote advertising or that they had contacted BT to enquire about their broadband service. Cable customers in comparison were more likely than average to mention information with their phonebill or direct mail, whilst customers of other DSL ISPs relied more on work of mouth, their ISP calling them or information via the Internet.

Figure 6d: How became aware of ISPs broadband service (spontaneous mentions)
Base: UK broadband decision-makers, Mar ‘03 (Base: 250)

Broadband customers’ previous Internet access

6.9 Qualitative results reported in November indicated that the majority of broadband customers had upgraded from narrowband, primarily from unmetered PSTN services. This is confirmed by results from the March ad hoc broadband survey, shown below in figure 6e.

6.10 A third of broadband customers previously had two PSTN lines, again higher amongst cable (42%) than BT customers (25%).

Figure 6e: Previous Internet access used by broadband customers
Base: UK broadband decision-makers, Mar ‘03 (Base: 250)

Benefits of broadband

6.11 Faster speed was by far the most obvious benefit of broadband in comparison to previous Internet access methods, as shown in figure 6f. A third of broadband customers who had upgraded from narrowband mentioned the value of the permanent connection, and a similar proportion the simultaneous usage facilities.

6.12 Simultaneous usage was a noticeable benefit to considerably fewer customers who previously had two PSTN lines, and to a lesser extent those who used metered access, presumably as the latter group tended spend less time online than average and hence phone calls were not constrained to the same extent.

6.13 About 1 in 6 customers specifically noticed the content benefits of broadband – these tended to be younger consumers.

Figure 6f: Perceived benefits of broadband compared to previous narrowband service
Base: UK broadband decision-makers, who previously used narrowband, Mar ‘03 (Base: 231)

Features of broadband valued most

6.14 Similar results, shown in figure 6g below, indicate the three features of broadband which customers value most – speed, permanent connection, and simultaneously usage. Speed primarily drives broadband take-up, and the permanent connection and simultaneous usage were not key drivers for the vast majority of customers. However, once connected to broadband, the value and perceived benefits of these latter two features become much more evident to customers. Content was considered amongst the top three most valuable aspects of broadband for just over half (54%) of customers, again more evident among younger groups.

Figure 6g: Top three most valued features of broadband
Base: UK broadband decision-makers, Mar ‘03 (Base: 250)


Chapter 7

Interest in broadband among non-users

7.1 Customers using PSTN Internet services were told about the features and current prices of broadband Internet services (monthly fee starting from £20 and a one-off connection charge of £50), and asked how likely they were to get broadband at these prices. Last quarter’s report highlighted a significant rise in awareness of broadband services – almost 8 in 10 Internet users were aware of broadband in November 2002, compared with just over half nine months previously in February 2002.

7.2 At current prices, a quarter of PSTN Internet customers thought they would get broadband. This does not necessarily mean that a quarter will actually get broadband, as previous research has clearly shown that claimed intentions rarely materialise in the same level of take-up. What can be more reliable however, is the proportion of consumers claiming they are not currently interested in broadband, reasons for which include the cost (connection fee as well as usage costs), insufficient use to justify getting broadband, and satisfaction with current method / speed, as shown in figures 7a and 7b.

Figure 7a: Likelihood of getting broadband at current prices
Base: UK homes with PSTN Internet access, Feb ’03 (Base: 767)

 

 

7.3 Those expressing greatest interest in getting broadband at current prices include younger to middle age groups, higher income groups, medium to heavy weekly Internet users, and those already using unmetered packages (33% of unmetered customers thought they would upgrade compared to 20% of metered customers), and those with more than one fixed line. 2 in 5 of this latter group thought they would get broadband, but perhaps more interesting is that the same proportion thought they would not. Given that their monthly rental costs for two lines are likely to be comparable to broadband costs, this perhaps indicates either that they don’t realise what they are paying for two lines and its comparability with broadband costs, or, that they value their second line for phone calls and not just Internet use. The latter is consistent with previous Oftel research which found that only half of homes with a second line actually used this for Internet.

Reasons for not getting broadband

7.4 Reasons for not getting broadband obviously differ by customer type. Cost barriers however, were consistent across income groups. Older customers (who are generally lighter users) said they didn’t use the Internet enough, as did ABC1 social groups, who are lighter users than their C2DE peers. Overall only 3% mentioned lack of availability as the reason for not getting broadband, and only 4% were specifically deterred by not knowing enough about it.

Figure 7b: Reasons not likely to get broadband at currently prices (unprompted)
Base: UK homes using PSTN Internet not likely to get broadband at current prices Feb ’03 (Base: 430)

Opinion on ‘attractive’ broadband prices

7.5 Given the obvious importance of costs, PSTN Internet customers who said they were not likely to get broadband were asked what broadband prices would need to fall to before they would consider getting it. 15% of these customers said they wouldn’t switch to broadband at any price, and a further 20% weren’t sure what price, if any, would attract them.

7.6 Of the remaining two-thirds, the vast majority said that prices would have to fall to under £20, quoting £12 on average, with those using unmetered packages prepared to pay about a third more than those on metered packages.

7.7 Caution should be applied to this type of result however due to the hypothetical nature of the questioning. Even at £12, many of these customers may still not adopt broadband. The average price is deflated by lighter users and reflects the low value of broadband to these customers and potentially a lack of appreciation of the benefits of broadband, rather than realistic perceptions of an acceptable price.

7.8 Perhaps surprisingly, customers with second lines didn’t value broadband any more than average, consistent again with findings above which indicate the value of second lines for phone calls and not just Internet use.

Figure 7c: Take-up and interest in broadband at various prices
Base: UK homes with Internet access, Feb ’03 (Base: 986)


Annex A

Q12 February 2003 residential questionnaire – Internet questions

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

Yes
No
Don’t know/no answer

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

Yes
No
Don’t know/no answer

All not connected to the Internet
How likely, if at all, are you to get access to the Internet at home in the next 12 months?

Very likely
Fairly likely
Not very likely
Not at all likely
Don’t know/no answer

Unlikely to get Internet access
Why are you unlikely to get access to the Internet at home?

Have Internet access
And 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/faster than an ordinary phone. You can make voice calls at the same time as using the Internet.
Broadband Access via DSL/ADSL – much faster than ordinary phone – is always on and unmetered access. You can make voice calls at the same time as using the Internet.
Broadband access via Cable modem – much faster than ordinary phone – is always on and unmetered access. You can make voice calls at the same time as using the Internet.
High speed access via another method e.g. satellite, fibre optic, fixed, wireless or leased line
Other
Don’t know/no answer

Have PSTN Internet access
Do you have a second phone line to enable you to make telephone calls at the same time as using the Internet, please do not include your mobile phone?

Yes
No
Don’t know/no answer
Have Internet access
Which Internet Service Provider(s) (ISPs) does your household currently use, including any free ISPs?

Have Internet access
Thinking about your household’s main ISP, do you have to pay a subscription fee for the package provided? This might include free usage time, and normally is paid on a monthly or annual basis.

Yes
No
Don’t know / no answer

Have Internet access
Do you ever pay any ‘per minute’ call charges for the time you spend online?

Pay ‘per minute’ call charges for all the time spent online
Pay ‘per minute’ call charges for some but not all of the time spent online
Do not pay any ‘per minute’ call charges for being online
Don’t know/no answer

Have broadband or unmetered PSTN Internet access
How much do you pay each month for your Internet service? Please do not include any other phone charges or bills, only the subscription you pay for your Internet service.

Have Internet access
Which of the following best describes how you would prefer to pay for your home Internet services?

Direct payment from my credit card, with no separate bill
Direct debit payment straight from my bank account, with no separate bill
Charges billed on my phone bill then pay by cheque, direct debit, credit card, or other method
Charges billed on a separate bill then pay by cheque, direct debit, credit card, or other method
I don’t mind how I pay
Other
Don’t know/no answer

Have Internet access
How many hours would you say you and members of your household spend using the Internet at home in a typical week?

Less than an hour per week
1 –2 hours per week
3 – 5 hours per week
6 – 10 hours per week
11 – 15 hours per week
16 – 20 hours per week
21 – 30 hours per week
More than 30 hours per week
Don’t know/no answer

Have Internet access
How satisfied are you with the following…..?

Your home Internet service overall
The speed of your home Internet service
The quality and reliability of your home Internet service The overall value for money of your home Internet service

Very satisfied
Fairly satisfied
Not very satisfied
Not at all satisfied
Don’t know/no answer

Have PSTN unmetered Internet access
Which of the following do you think you would do if current unmetered charges were to rise by 10% would you?

Continue to use unmetered narrowband/current package
Switch to metered narrowband – ordinary phone line, dial-up access with a pay as you go package
Switch to DSL/cable modem broadband
Stop using the Internet
Don’t know/no answer

Have PSTN unmetered Internet access
And if they were to rise by 50% would you?

Continue to use unmetered narrowband/current package
Switch to metered narrowband – ordinary phone line, dial-up access with a pay as you go package
Switch to DSL/cable modem broadband
Stop using the Internet
Don’t know/no answer

Have PSTN unmetered Internet access
Broadband Internet services such as DSL or cable modem allow you to be permanently connected to the Internet and offer much faster Internet access than an ordinary phone line. 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. Current charges start around £20 per month, in addition you may have to pay a one off connection fee of about £50.

How likely are you to consider replacing your current connection with broadband services at current prices.

Very likely
Fairly likely
Not very likely
Not at all likely
Don’t know/no answer

Have PSTN access and unlikely to get broadband
Why would you not consider replacing your current connection with broadband?

Have PSTN access and unlikely to get broadband
What would the monthly broadband subscription have to drop to before you would consider using a broadband Internet service?

 Ad hoc broadband decision-makers survey

Firstly, how often do you personally access the Internet from a PC or laptop from home? Please include receiving and sending emails from home?
Almost every day
Every 2-3 days
About once a week
About once a fortnight
About once a month
Never but have access here
Don't have Internet here

Do you have broadband Internet access at home via either an ADSL (Assymetric Digital Subscriber Line) or cable modem connection?

Broadband Internet access offers high speed Internet access enabling you to download information and content up to 10 times faster than via your existing phone line. It also means you are permanently connected to the Internet and don't have to dial up each time you want to use it and that you can make telephone calls at the same time as using the Internet (without the need for a second fixed line).

Is this an ISDN connection?
Yes - ADSL
Yes - cable modem
Yes - not sure which type of connection (but not ISDN)
No
Don't know

Which telecoms provider supplies the telephone line(s) in your home? Is it...?

BT 1
NTL 2
Telewest 3
Other cable company4
Other 1

 What were your main reasons for getting broadband Internet at home? PROBE: What others?

And which Internet Service Provider (ISP) do you currently use for your broadband Internet service at home?

What were your main reasons for choosing ...... for your broadband service rather than one of the other ISP's? PROBE: Why else?

How did you come to hear about you ISP's (Internet Service Provider's) broadband service?

TV advert 1
Radio advert 2
Poster 3
Newspaper advert 4
Direct mail 5
Information with phone bill 6
I phoned the ISP 7
Someone from the ISP called me 8
The ISP mentioned it when I called them about something else 9
Word of mouth 0
Other (SPECIFY) 1

 Are you billed for your broadband service on your ordinary phone bill or do you receive a separate bill or are you billed for your broadband service in some other way, e.g. by credit or debit card?
On same phone bill 1
Billed separately 2
Billed in some other way e.g. by credit/ debit card 3
Don't know Y

 When deciding which supplier to use for your broadband, how important was the fact that you were billed for your broadband service on your ordinary phone bill? Was it ..

The most important factor 1
An equally important factor along with others 2
It was important but other factors were more important 3
I was aware of it but it was not very important 4
I did not even take it into account 5
Don't know Y

 How much do you pay each month for your broadband service? Please do not include any other phone charges or bills, only the subscription you pay for your broadband service.

(And) Which of the following do you think you would do if current broadband charges were to rise by 10%? Would you...?
(And) Which of the following do you think you would do if current broadband charges were to rise by 50%? Would you...?

Continue to use broadband

Switch to unmetered narrowband - ordinary phone line dial-up access paying a set fee for unlimited use

Switch to metered narrowband - ordinary phone line dial-up access with a pay as you go package

Stop using Internet

Don't know (DO NOT READ OUT)

 Why would you continue to use broadband rather than switching to a narrowband package?

And if you switched to narrowband Internet access, would you get a second line to enable the phone to be used at the same time as the Internet?

Yes definitely 1
Yes maybe 2
No probably not 3
No definitely not 4

 Which of the following best describes the type of Internet connection you used before getting broadband?

Ordinary phone line/ dial up access 1
ISDN 2
Didn't have Internet before getting broadband 3
Other 4

 And which of the following best describes the type of package you used before getting broadband?
Pay as you go - where you pay for all your calls whilst online perhaps in addition to a set monthly or quarterly charge 1
Subscription providing unlimited usage at certain times of the day or for a set number of hours 2
Subscription providing unlimited usage at all times and for any number of hours 3
Don't know Y

 And before getting broadband, did you have more than one fixed line enabling the phone to be used at the same time as the Internet?

What benefits of broadband have you noticed compared to your previous Internet service?

And which three of the following features of broadband do you value most?

Faster speed 1
Always on/ not having to dial up each time 2
Simultaneous Internet/ phone use 3
Increased content 4
Better quality/ accessibility of images, videos, animations, music, live webcasts 5
Internet radio 6
Better interactive gaming, debates, two way video communications 7
Faster/ wider range of e-commerce opportunities 8
Something else 9

 


Annex B

Summary of ad hoc broadband results, excluding ntl 128k customers

What were your main reasons for getting broadband Internet at home? (Unprompted), Base: UK broadband decision makers (Base: 191)

Faster access generally 71%
Simultaneous use of phone/ Internet 13%
Faster movement around the web 11%
Not much more expensive than normal lines 9%
Permanent connection 9%
More reliable 7%
Generally for more Internet use 7%
Continuous email access 4%
Good deal/ offer 4%
Business use 4%
Gaming 3%
Internet radio 3%
School/ college work/ children’s education 3%
Download music files 3%
Exchange file attachments more quickly 3%
Other reasons 9%
Don’t know 1%

And which Internet Service Provider (ISP) do you currently use for your broadband Internet service at home?
Base: UK broadband decision makers (Base: 191)

NTL 23%
BT 23%
Telewest 18%
AOL 9%
Freeserve 5%
Others 17%
Don’t know 5%

What were your main reasons for choosing ...... for your broadband service rather than one of the other ISP's? (Unprompted)
Base: UK broadband decision makers (Base: 191)

Use them already for phone service 28%
Cheap usage costs 18%
Had special deal 16%
Cheaper package generally 11%
Reliable service 11%
Only choice in my area 8%
Use them already as ISP 8%
Use them already (general mention) 8%
Cheap installation costs 5%
Good customer service 4%
Have good name 4%
Came with package/ cable TV 4%
Fast speeds 3%
Only one available/ main provider at the time 3%
Recommendation 3%
Other reasons 9%
Don’t know 5%

How did you come to hear about you ISP's (Internet Service Provider's) broadband service? (Prompted)
Base: UK broadband decision makers (Base: 191)

Direct mail 25%
Word of mouth 22%
TV advert 19%
Information with phone bill 12%
Newspaper advert 10%
Phoned ISP 6%
ISP called me 6%
ISP website 5%
Poster 4%
Internet 4%
Through work 3%
Internet adverts 3%
Other 11%
Don’t know 7%

Are you billed for your broadband service on your ordinary phone bill or do you receive a separate bill or are you billed for your broadband service in some other way, e.g. by credit or debit card?
Base: All using BT/ntl/Telewest for both their telephone lines and Internet broadband service (Base: 108)

On same phone bill 70%
Billed separately 20%
Billed in some other way 4%
Don’t know 6%

When deciding which supplier to use for your broadband, how important was the fact that you were billed for your broadband service on your ordinary phone bill? (Prompted) Base: All paying for their Internet broadband service on their ordinary phone bill (Base: 71)

The most important factor 3%
An equally important factor along with others 18%
Important, but other factors more important 6%
Not very important 22%
Didn’t consider it 48%
Don’t know 3%

How much do you pay each month for your broadband service? Please do not include any other phone charges or bills, only the subscription you pay for your broadband service. [Actual amount in £ and p was coded]

Base: UK broadband decision makers (Base: 191)
Average £26
Don’t know 5%

Which of the following do you think you would do if current broadband charges were to rise by 10%? Would you...?
Base: UK broadband decision makers (Base: 191)

Continue to use broadband 82%
Switch to unmetered narrowband 6%
Switch to metered narrowband 2%
Stop using Internet 6%
Don’t know 4%

Which of the following do you think you would do if current broadband charges were to rise by 50%? Would you...?

Base: UK broadband decision makers (Base: 191)
Continue to use broadband 35%
Switch to unmetered narrowband 31%
Switch to metered narrowband 7%
Stop using Internet 16%
Don’t know 10%

Why would you continue to use broadband rather than switching to a narrowband package? (Unprompted)
Base: All who would continue to use broadband if charges rose by 50% (Base: 67)

Value the faster speeds 55%
Value simultaneous Internet/ phone usage 20%
Value not having to dial up/ connect 18%
Broadband worth the additional cost 16%
Cannot be bothered/ too much hassle to change 3%
Other reasons 9%
Don’t know 9%

And if you switched to narrowband Internet access, would you get a second line to enable the phone to be used at the same time as the Internet?
Base: All saying they would switch to narrowband at either price increase (Base: 75)

Yes definitely 30%
Yes maybe 13%
No probably not 22%
No definitely not 32%
Don’t know 3%

Which of the following best describes the type of Internet connection you used before getting broadband? (Prompted)
Base: UK broadband decision makers (Base: 191)

Ordinary phoneline / dial up access 84%
ISDN 6%
Other 2%
Didn’t have Internet prior to getting broadband 7%
Don’t know 2%

And which of the following best describes the type of package you used before getting broadband? (Prompted)
Base: All previously using PSTN Internet access (Base: 159)

Pay as you go 22%
Partly unmetered 42%
Fully unmetered 34%
Don’t know 3%

And before getting broadband, did you have more than one fixed line enabling the phone to be used at the same time as the Internet?
Base: All previously using PSTN Internet access (Base: 159)

Yes 36%
No 64%

What benefits of broadband have you noticed compared to your previous Internet service? (Unprompted)
Base: All previously used a different connection method (Base: 174)

Faster speed 87%
Simultaneous use of phone/ Internet 30%
Always on/ don’t have to dial up 30%
Better quality/ more accessible content 14%
Other benefits 10%
No obvious benefits/ not sure 4%

And which three of the following features of broadband do you value most? (Prompted)
Base: UK broadband decision makers (Base: 191)

Faster speed 88%
Always on/ don’t have to dial up 67%
Simultaneous use of phone/ Internet 45%
Better quality/ more accessible content 36%
Better interactivity 13%
More ecommerce opportunities 10%
Increased content 7%
Internet radio 6%
Summary of any content mentioned 59%

 

 

 

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