The Communications Market 2010: UK
Industry metrics and summary
With retail revenues totalling over £30bn in 2009 (equivalent to around £500 for every person in the UK), telecoms networks in the UK (fixed voice and internet networks, and mobile networks) contributed around 75% of total service revenues for the UK's communications industry.
However, after years of growth, 2009 was a difficult year for the UK's telecoms operators. For the first time, overall revenues declined, falling below 2007 levels. This was driven in part by the economic downturn, but also by the impact of falling prices and a slowdown in the growth of mobile and broadband connections. Revenues from mobile voice and messaging declined for the first time, and revenues from fixed-line internet connections also fell. But at the same time, massive growth in data use, the widening availability of super-fast broadband networks and changing consumer behaviour as more people access internet services on mobile phones all suggest a dynamic industry in which operators seek new revenue streams and consumers are presented with increasing opportunities to find new and better ways to communicate, to seek information and to find entertainment.
The following two sections look at the telecoms sector from an industry and then from a consumer perspective. In this section we look at five key market developments that are shaping the future of the industry and changing consumer behaviour.
- Declining retail revenues while use increased. We look at how the revenue mix in the telecoms industry has changed over the past decade, and highlight how in 2009 the long-term growth in mobile and internet revenues reversed, despite increases in voice volumes, data use and mobile messaging (page 280).
- The growing gap between data use and revenues. This decline in revenues came in the context of massive increases in data use; we examine how this gap has developed (page 282).
- Broadband speeds increase. The roll-out of ADSL2+ services and upgrades to cable networks resulted in actual broadband speeds increasing. However, with most DSL broadband now sold at an advertised speed of 'up to' 20Mbit/s or more, there is a growing gap between this and the average actual speed of 5.2Mbit/s. Meanwhile, deployments of super-fast broadband point to a new high-speed future, but current take-up is still very low (page 286).
- Mobile broadband finds its niche. After rapid growth in 2008, take-up of mobile broadband slowed in 2009. However, as fixed-line broadband take-up plateaus, mobile broadband is enabling some households to get online for the first time (page 291).
- Growth of the 'pocket internet'. The increasing take-up of smartphones is driving significant increases in the number of people accessing the internet on mobile phones, creating new business models and changing consumer behaviour (page 297).