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| Consumers' use of Internet - Oftel residential survey - Q13 May 2003, 31 July 2003 | |
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Aug ‘00 |
Aug ‘01 |
Feb ‘02 |
Aug ’02 |
Feb ‘03 |
May ‘03 |
|
|
Freeserve |
27% |
19% |
21% |
20% |
21% |
19% |
|
BT |
15% |
18% |
20% |
18% |
20% |
18% |
|
AOL |
10% |
16% |
17% |
19% |
17% |
18% |
|
NTL (includes cable and Wireless) |
8% |
9% |
13% |
17% |
13% |
12% |
|
Tiscali (including Tiny Online and Lineone from May ’02 onwards) |
- |
- |
2% |
4% |
6% |
6% |
|
Telewest/Blueyonder |
- |
- |
3% |
3% |
6% |
5% |
|
Virgin Net |
3% |
3% |
2% |
4% |
4% |
4% |
|
Others |
23% |
25% |
15% |
15% |
12% |
17% |
|
Total |
100% |
100% |
100% |
100% |
100% |
100% |
- less than 2% share included in other category
Amount paid for broadband and unmetered narrowband
5.1 Narrowband Internet customers using unmetered packages claim to pay on average £13 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).
5.2 In comparison broadband customers claim to pay about £21 per month on average for their service. These figures are broadly similar to those reported last quarter and current market prices (broadband is available for between £18-£26 per month), which indicates that customers appear to have a fairly good idea of how much they are paying for their broadband services.
Potential response to price increases
5.3 Customers paying a set fee subscription for their Internet services (ie. broadband and unmetered narrowband customers) were asked about the ways in which they might change their Internet usage if prices were to rise by 10%. 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 as explored during February, their reasons for not doing so.
Unmetered narrowband (PSTN/ISDN)
5.4 In response to a 10% rise, just over half of narrowband unmetered Internet customers said they would continue to use this access / package. Around 1 in 4 said they would switch to a different type of access (14% would upgrade to broadband – half to high speed and half to a connection with speeds up to and including 256K but excluding ISDN, and 8% would switch to metered access).
5.5 Those who said they would switch to broadband at a 10% rise in PSTN or ISDN prices were higher income groups and medium sized households (3-4 people) and those with more than one phoneline. Likelihood to switch to broadband was not affected by the price consumers were currently paying for their connection.
Figure 5a:
Proposed behaviour in response to price increases
Base: UK homes with PSTN or ISDN unmetered Internet access, May ’03
(Base: 308)
Broadband
5.6 Overall, results remain broadly similar to February ’03, broadband customers remain more loyal to their access method, as shown in figure 5b. 3 in 5 claimed they would continue to use the same broadband product if prices rose 10% and a further 1 in 5 stated they would switch to a higher or lower speed broadband product than currently. This equates to 4 in 5 broadband customers that would continue to use a broadband product given a 10% rise across broadband access. The claimed intentions amongst just the high-speed broadband customers is examined in chapter 8.
5.7 Consistent with previous findings, only around 1 in 10 broadband customers thought they would switch to narrowband given a 10% increase in broadband prices, and around half of these claimed they would get a dedicated second phone line for their narrowband Internet connection. This equates 5% of all broadband customers that would switch to narrowband and get a second line dedicated to Internet access.
Figure 5b:
Proposed behaviour in response to price increases
Base: UK broadband customers, May ’03 (Base: 193)
* only applicable
to those currently using over 256K broadband connection
**
only applicable to those currently using up to 256K broadband connection
6.1 Customers using any Internet access product other than broadband 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. Recently there has been 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.
6.2 Similarly to the February ’03 report, at current prices, a quarter (26%) of non-broadband Internet customers thought it likely that they would get broadband, which equates to 21% of all Internet customers. This does not necessarily mean that this proportion 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 as reported during February ‘03, include the cost (connection fee as well as usage costs), insufficient use to justify getting broadband, and satisfaction with current method / speed.
Figure 6a:
Likelihood of getting broadband at current prices and at 10% price increase
Base:
UK homes with non-broadband Internet access, May ’03 (Base: 774)
6.3 As reported in February ‘03, those consumers expressing greatest interest in getting broadband at current prices are younger to middle age groups, higher income groups, and those already using unmetered packages (32% of unmetered customers thought they would upgrade compared to 22% of metered customers).
6.4 In addition 3 in 10 consumers who considered themselves early adopters of technology but who were not currently using broadband for their Internet connection think it likely they will upgrade at current prices. A further 4 out of 10 non-broadband customers that claim usually to take up new services or products fairly quickly, also think they are likely to upgrade. These groups seem most likely to actually get broadband. This equates to 8% of non-broadband customers and 7% of all those with Internet.
6.5 As shown in figure 6a, in the event of a 10% rise in broadband prices, likelihood of upgrading to broadband amongst these consumers reduces to 15%. This suggests 1 in 10 do not value broadband at higher than current prices and although use of broadband would continue, growth would slow given a 10% increase in prices. Those consumers that remained likely to upgrade to broadband at a 10% price rise were middle aged or older consumers, high income and small households, and those using an unmetered package. Please note that these findings should be treated with a large degree of caution, and as indicative only. Claimed reactions to hypothetical situations generally give only a broad indication of what actual reactions might be should the situation actually materialise. These findings should therefore be considered in this context.
Net effect of 10% increase in broadband prices
6.6 1 in 5 households with Internet access currently use broadband and a further 1 in 5 said they would consider getting broadband at current prices. Assuming these consumers did upgrade to broadband (note that the level of claimed switching intentions is rarely achieved in practice), 2 in 5 Internet homes would be using broadband if prices stayed at current levels and overall Internet use remained stable.
6.7 If broadband prices rose by 10%, assuming claimed reactions were carried out, up to 14% of current broadband users would stop using broadband (in addition some would switch to faster or slower broadband connection than currently as shown in figure 5b). This equates to approximately 3% of Internet users, leaving approximately 16% of Internet users with broadband. A further 11% of narrowband homes claimed they would be dissuaded from upgrading to broadband if prices rose by 10%, leaving about 12% of Internet homes that would still consider upgrading.
6.8 Based on these assumptions the net effect of a 10% increase in broadband prices would be to slow down the uptake of broadband, rather than halt it. Potential use would fall from an estimated 40% to about 28%. However, these results should only be treated as indicative due to the hypothetical nature of predicting future behaviour.
Price increases
7.1 During May ’03 85% of broadband customers claimed to use a high-speed broadband product with speeds over 256K, (16% of all Internet customers). These customers react to a 10% price increase in broadly the same way as broadband customers as a whole.
7.2. As shown in the chart below, 78% would continue to use broadband. 6 in 10 would stick with their current speed, 12% would switch to a slower/mid speed connection and 7% would move to a higher speed broadband connection than currently being used.
Figure 7a:
Proposed behaviour in response to a price increase
Base:
UK broadband customers with over 256K connection, May ’03 (Base: 162)
7.3 Slightly more than 1 in 10 (11%) claimed they would switch to narrowband either metered or unmetered, and a further 4% said they would stop using the Internet. In total, 6% of high speed broadband customers would switch to narrowband and get a second line dedicated to Internet access.
7.4 There were no significant differences in levels of satisfaction with overall Internet services, or speed amongst high speed broadband users group compared to all broadband users.
Net effect of 10% increase in broadband prices amongst high speed broadband users
7.5 As stated above 16% of households with Internet access currently use high speed broadband and 1 in 5 Internet customers said they would consider getting broadband at current prices it should be noted that some consumers may have based this intention on the lower prices of 128K connections. Assuming these consumers did upgrade to broadband (note that the level of claimed switching intentions is rarely achieved in practice), around a third of Internet homes would be using broadband if prices stayed at current levels and overall Internet use remained stable.
7.6 If broadband prices rose by 10%, assuming claimed reactions were carried out, up to 27% of current high-speed broadband users would stop using a high speed connection, (some would switch to slower speeds). In total, 4% of Internet customers would stop using broadband. This would leave approximately 12% of Internet users with broadband. Around a further 12% of Internet homes claimed they would consider upgrading to broadband even if prices rose by 10%.
7.7 Based on these assumptions the net effect of a 10% increase in broadband prices would be to slow down the uptake of broadband, rather than halt it. Potential use would fall from around 37% to 24%. However, these results should only be treated as indicative due to the hypothetical nature of predicting future behaviour.
8.1 Satisfaction remains stable, currently standing at 92% as shown in figure 8a below. Satisfaction with speed of access has been consistently lower than other aspects of service. During May ’03 narrowband metered customers were significantly less satisfied with both their overall service and the speed at which they are receiving, than in February. Satisfaction with overall service amongst this group has fallen significantly from 93% to 88%, similarly satisfaction with speed has plummeted from 70% to 57%. This may be linked to a continued awareness of the benefits of broadband influencing opinion on the speeds being received via narrowband. Similar findings were obtained amongst business customers using metered narrowband access – satisfaction has also been falling amongst this group (82% satisfied with their overall service and 62% satisfied with their speed). For further details see the May ’03 Business use of Internet report (link).
Figure 8a:
Satisfaction with home Internet service
Base:
UK homes with Internet access, May ‘03 (Base: 967, ‘don’t knows have
been excluded)
8.2 Broadband customers remain most satisfied with all aspects of their Internet service and satisfaction with speed amongst these Internet customers has risen to 98%. There were no differences in satisfaction with speeds according to the length of time customers have had their connection however, this is based on base sizes of less than 100.
Figure 8b:
Satisfaction with aspects of home Internet service
Base: UK homes with Internet access, May ‘03 (Base: 967, ‘don’t knows
have been excluded)
|
Average |
Narrowband unmetered (PSTN/ISDN) |
Narrowband metered (PSTN/ISDN) |
Broadband |
|||||
|
Feb ‘03 |
May ’03 |
Feb ‘03 |
May ‘03 |
Feb ‘03 |
May ‘03 |
Feb ‘03 |
May ‘03 |
|
|
Overall Internet service |
91% |
92% |
89% |
91% |
93% |
88% |
97% |
98% |
|
Speed |
74% |
72% |
66% |
69% |
70% |
57% |
94% |
98% |
Actual versus expected broadband speeds
8.3 Broadband customers were asked about how their actual broadband speeds compared to their expectations when they first started using broadband services.
8.4 The majority (88%) of broadband customers thought their connection was about the same if not faster than they had expected it to be initially, as shown in figure 8c. These proportions did not vary significantly according to the length of time customers had their connection or they type of broadband connection they were using (DSL or cable modem).
Figure 8c:
Actual speed of broadband versus expected speeds
Base:
Broadband customers, May ’03 (Base: 193)
8.5 There were no significant differences according to the speed of broadband service consumers were using. Unsurprisingly, almost all (99%) broadband customers who thought their speeds were faster than they had expected were satisfied with this aspect. Of those that were expecting faster speeds, 10% were dissatisfied with their speed of Internet service.
Methodology
In April
2003, Oftel changed the market research agency it uses to conduct the
fieldwork for its UK quarterly residential surveys. At the same time
Oftel took the opportunity to return to the use of CAPI from PAPI allowing
greater flexibility and ease of interviewing.
Sample
The sample
remains the same as previous waves, representative of UK adults, aged
15+, in terms of age, gender, social grade, working status, and region.
We continue to ensure representation of rural and deprived areas in
their natural proportions.
As previously, controls are also set on the proportion of interviews conducted in cabled and non-cabled areas to ensure they are included in their natural proportions, using updated postcode data provided by the cable operators.
Impact of
changes on results
Results have remained largely unaffected by this change in
methodology.
ASK ALL
Q1. 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
ASK ALL
Q2. Do you or does anyone in your household have access to the Internet/worldwide web at HOME (via any device, eg PC, mobile phone etc)?
Q3. Which of these methods does your household use to connect to the Internet at home?
Q4. Which of these best describes how you access broadband at home?
A Access via
a BT or other telephone line, but NOT a cable line (DSL/ADSL)
B Access
via cable companies such as NTL/Telewest using a cable modem
Don’t know
ASK ALL
WITH BROADBAND
Q5. How long has your household had a broadband Internet connection?
Q6. Thinking about the speed of your broadband Internet connection, is this faster, slower or about the same as you expected it to be when you first got it?
Q7. Which of these best describes whether you have a second fixed phone line to enable you to make telephone calls at the same time as using the Internet, please do not include your mobile phone?
Q8. Which Internet Service Provider(s) (ISPs) does your household currently use, including any free ISPs?
Q9. Thinking about your household’s main Internet Service Provider (ISP), do you have to pay them a subscription fee for the package provided? This might include free usage time, and is normally paid on a monthly or annual basis.
Q10. Which of the following applies to your main ISP?
Q11. Have you ever used an unmetered Internet package where you pay a set monthly or quarterly charge for unlimited usage for some or all of the time you are online?
Q12. Have you ever used a pay as you go package where you pay for all your calls whilst online, this might be in addition to a set monthly or quarterly charge?
Q13. 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 at around £20 per month, in addition you may have to pay a one off connection fee of about £50
Q14. And if current broadband charges across all suppliers were to rise by 10%, how likely would you be to replace your current connection with a broadband connection? SINGLE CODE
Q15. Which of these would you do if the cost of your current unmetered ordinary phone line Internet package were to rise by 10%? Just read out the letter that applies.
Q16. Which of these would do if the cost of your current unmetered ISDN Internet package were to rise by 10%? Just read out the letter that applies.
Q17. 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.
Q18. Which of these do you think you would do if current broadband subscription charges were to rise by 10%? Just read out the letter that applies.
Q19. And when you switched to an [ISDN line/ordinary phone line], would you use a pay as you go package, or an unmetered package where you pay a set fee for unlimited use?
Q20. And would you get a dedicated phone line for your Internet connection or would you use a line that is also shared with telephone calls or a fax machine?
Q21. How satisfied are you with the following…..?
Q22. Please tell me whether you agree or disagree with the following statements about home Internet services?
Q23. Which of these best applies to you when it comes to buying telecoms and Internet services? Just read out the letter that applies.
A I tend to
buy the latest products or services soon after they come out
B I don’t
usually buy the latest products or services straight away, but I am
often one of the first of my friends to have them
C I don’t
usually buy the latest products or services until most of my friends
or family have them
D I rarely
buy the latest products or services, even when they have been around
for a long time
