the communications market report 2014 - home - ofcomthe communications market report 2014 . 7 august...

Ofcom analyst briefing The Communications Market Report 2014

7 August 2014

1

Agenda

Market Overview Jane Rumble, Head of Media Research and Market Intelligence

The telecoms industries Nick Collins, Senior Telecoms Analyst

The audio-visual industries Jonathan Fenn, Senior Media Analyst

Internet and web-based content Andrew Jackson, Senior Convergence Analyst

Post Steven Cape, Senior Analyst, Market Intelligence

2

Market overview

Jane Rumble, Head of Media Research and Market Intelligence

3

TV reported the largest rise in revenues

Source: Ofcom/ operators Note: Includes licence fee allocation for radio and TV, Figures are in nominal terms

£billion

Communications industry revenue: telecoms, TV, radio, post

Page 21 Figure 1.1

41.6 41.1 40.5 39.4 39.3 38.6

11.2 11.1 11.8 12.4 12.5 12.9 1.1 1.1 1.1 1.2 1.2 1.2 7.0 6.8 6.7 6.9 7.3 7.5

60.9 60.1 60.1 59.8 60.2 60.2

0

20

40

60

80

2008 2009 2010 2011 2012 2013

Total

Post

Radio

TV

Telecoms

Annual change

5 year CAGR

0.2% -0.2%

2.9% 1.6%

-2.1% 0.9%

3.4% 2.8%

-1.7% -1.5%

4

Falling household spend on communications

Source: Ofcom / operators/ ONS Notes: Adjusted for CPI; includes VAT.

27.59 25.67 25.49 23.80 22.85 22.32

52.32 49.95 49.32 48.70 48.23 45.65

11.77 11.59 11.28 11.79 12.49 13.19

29.68 29.75 30.68 31.01 30.59 30.61

126.73 122.19 121.48 120.40 119.20 117.08

5.3% 5.4% 5.4% 5.4% 5.5% 5.5%

0%

1%

2%

3%

4%

5%

6%

0

50

100

150

2008 2009 2010 2011 2012 2013

Post

Radio

Television

Fixed internet

Mobile services

Fixed voice

% of total spend

£ per month (2013 prices)

Page 32 Figure 1.12

Take-up of connected devices grows

5

39%

14% 11% 5%

51%

22% 24%

7%

61%

24%

44%

11%

0%

20%

40%

60%

80%Q1 2012 Q1 2013 Q1 2014

Source: Ofcom research Page 24 Figure 1.3

6

Source: Ofcom research, data as at Q1 of each year

Proportion of households/ adults (%)

90 90 93 93 92 92 93 94 94 95

91 90 90 88 87 85 85 84

84 84

60 60 64 67 70 73 76 79 80 82

31

41

52 58

68 71 74 76 75 77

65 65 67

72 72 73

20 21

32 39

49

57

12 15 17 13

5 8 0

20

40

60

80

100

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Mobile telephony

Fixed telephony

Internet connection

Total broadband

Fixed broadband

Internet on mobile(personal)Mobile broadbanddongle or datacard

Nearly six in ten consumers now report accessing the internet on their mobile

Page 25 Figure 1.4

7

Proportion of media and communications time, by age

Source: Ofcom

37%

24%

31%

34%

39%

45%

49%

2%

5%

3%

2%

1%

1%

1%

1%

3%

1%

1%

10%

2%

8%

12%

13%

13%

15%

2%

1%

3%

2%

3%

2%

1%

5%

9%

5%

5%

3%

3%

2%

2%

1%

1%

1%

2%

3%

6%

5%

5%

6%

6%

5%

4%

4%

16%

23%

20%

18%

14%

10%

7%

5%

9%

7%

4%

3%

3%

2%

11%

11%

12%

10%

10%

10%

10%

5%

7%

5%

5%

6%

5%

3%

All adults16+

16-24

25-34

35-44

45-54

55-64

65+

TV or films on a TV set TV or films on another device Short video clips Radio on radio setRadio on another device Other audio Print media Voice commsText comms Games Other internet media Other non-internet media

Average time spent hours:mins

9:16

10:15

11:20

10:54

11:46

14:07

11:07

Page 60 Figure 1.40

Young people spend as much time on text comms as watching TV or films

8

The audio-visual industries

Jonathan Fenn, Senior Media Analyst, Market Intelligence

9

Overall TV revenues were up by 3.4%

Source: Ofcom/broadcasters. Note: Figures expressed in nominal terms.

Total TV industry revenue, by source

4,384 4,655

5,027 5,428 5,512

5,879

3,488 3,143

3,496 3,630 3,551 3,697

2,554 2,555 2,563 2,585 2,671 2,600

793 736 715 723 750 736 0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

2008 2009 2010 2011 2012 2013

Subscriptionrevenue

Netadvertisingrevenue

BBC incomeallocated toTV

Otherrevenue

£11,088 £11,220

6.7%

4.1%

6.0%

1.2%

-1.9% -1.5%

£m 1 year 5yr CAGR

Growth to 2013

£11,801 £12,366 3.4% 2.8%

-2.7% 0.4%

£12,485 Total £12,911

Page 161 Figure 2.36

£2,204m £1,896m £2,144m £2,159m £2,054m £2,059m

£449m £445m

£518m £563m £563m £669m

£835m

£802m

£834m £908m £910m £968m

£3,471m

£3,136m

£3,486m £3,619m £3,551m

£3,697m

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

2008 2009 2010 2011 2012 2013

Commercialmultichannels

Commercial PSBportfoliochannels

Main commercialPSB channels

TV advertising revenues up 4%

10

TV net advertising revenues, by source: 2008 - 2013

£m

0%

1 year 5yr CAGR

Growth

-1%

4% 1%

6% 3%

14% 8%

Source: Ofcom/broadcasters. Note: Figures expressed in nominal terms. Page 163 Figure 2.38

11

Online TV revenues: 2007 - 2013

£m

17.1 39.6 41.0 44.3 61.8 15.0 18.8 22.3 24.5

63.5

111.7

32.2

73.5 112.8

146.4

183.9

21.4 49.6

72.7

140.6

183.3

257.7

363.6

0

50

100

150

200

250

300

350

400

2007 2008 2009 2010 2011 2012 2013

FTV AdRevenues

Subscriptions

PPVtransactions

DTOtransactions

Annual Growth

41% 26% 76% 74% 40%

Total

Source: IHS

Online TV revenues grew 41% YoY

Page 130 Figure 2.4

12

Spend on network TV programmes: 2012 - 2013

£1,772m £2,093m

£848m £747m

£814m £794m

£691m £708m

£492m £486m

£310m £298m £232m £246m £250m £260m £192m £179m

0

1,000

2,000

3,000

4,000

5,000

6,000

2012 2013

Channel 5

Other PSB portfolio channels

BBC digital channels

BBC Two

Channel 4

Other digital channels

ITV1/ITV Breakfast

BBC One

Film/Sport channels

+3.7% £m 1 yr change

£5,601m £5,811m

+4%

-1%

+2%

-12%

+18%

-2%

+6%

-4%

-7%

Increase in programme spend driven by sports channels

Source: Ofcom/broadcasters. Note: Figures expressed in nominal prices Page 167 Figure 2.42

13

224.9 219.2 216.4 205.6

17.2 22.2 24.2 26.2

0

50

100

150

200

250

2010 2011 2012 2013

Timeshift

Live

Average minutes of viewing per day by activity

Source: BARB

4hr 2m 4hr 2m 4hr 1m 3hr 52m

Aver

age

min

s/da

y

TV viewing fell below 4 hours in 2013


14

343 345 347 341 311 316 314 309

269 270 269 256

234 232 227 216 199 196 196 185 169 165 157 148 151 147 142 134

0

50

100

150

200

250

300

350

2010 2011 2012 2013

Adults 65+

Adults 55-64

Adults 45-54

Adults 35-44

Adults 25-34

Adults 16-24

Children

The decline was seen across all ages

Source: BARB, Network

Average minutes of television viewing per day, by age, all homes

Average mins/day


15

69%

50%

82%

16%

16%

12% 5%

13%

2% 5%

7%

3% 3% 6%

1% 2% 8%

0%

20%

40%

60%

80%

100%

All adults 16-24 65+

Short video clips

Streamed TV or films (paid-for)

Catch-up TV or films (free)

DVD / Blu-ray

Recorded TV

Live TV

16-24s spend less time watching live TV

Proportion of watching activities, by age group

Source: Ofcom Page 64 Figure 1.45

16

1% 2% 1% 4%

7% 6% 6% 8%

19% 17%

40%

2% 2% 3% 3% 3% 3% 5% 6% 7% 8%

14%

20% 22%

38%

0%

10%

20%

30%

40%

50%

Q1 2013 Q1 2014

BBC iPlayer remains most popular online VOD service Claimed use of selected online VOD services

Source: Decipher mediabug Page 145 Figure 2.19

17

42

47

38

24

12

20

9

9

0% 20% 40% 60% 80% 100%

H2 2012

H2 2013 TV total

PC/Laptop

Tablet

Smartphone

% Share

We are increasingly turning to TV sets and tablets to access on demand content

Estimated share of the UK long-form ‘pull’ VOD market, by device (programmes/films only)

Source: 3Reasons LLP. ‘TV total’ includes VOD via set-top box, internet-enabled sets and TVs connected by games consoles.


Take-up of smart TVs among UK TV households

18

7 %

12 %

0 5 10 15

2013

2014

% of UK homes with a smart TV

Smart TV take-up is growing and more people are connecting them

Source: Ofcom technology tracker. Data from Q1 of each year

Consumers’ use of internet connection on smart TVs

18%

Yes

No

82%

23%

77%

2014

2013

Page 132/3 Figure 2.5/7

Source: Ofcom research, Q Have you ever used the internet connection on your smart TV set?

19

Internet and web-based content

Andrew Jackson, Senior Convergence Analyst, Market Intelligence

Mobile internet audiences grow while laptop and desktop audiences remain flat

20

0

10,000

20,000

30,000

40,000

50,000

60,000

Mar

-12

Apr

-12

May

-12

Jun-

12Ju

l-12

Aug

-12

Sep

-12

Oct

-12

Nov

-12

Dec

-12

Jan-

13Fe

b-13

Mar

-13

Apr

-13

May

-13

Jun-

13Ju

l-13

Aug

-13

Sep

-13

Oct

-13

Nov

-13

Dec

-13

Jan-

14Fe

b-14

Mar

-14

Laptop and desktop audience Mobile audience Digital audience

YoY growth YoY growth

11.0% 6.6%

4.2%

Source: comScore MMX, MMX-MP, and GSMA MMM, UK

Active audience on laptop, desktop, and mobile devices Unique audience (000)

1.5%

5.7%


Tablets are preferred over laptops, desktops and smartphones

21

29

17 22

30

2 Laptop

Desktop

Smartphone

Tablet

Other

Most important device for internet access by device ownership Adults who own a desktop, laptop, smartphone and a tablet (%)

Source: Ofcom research, Q1 2014 Page 275 Figure 4.32

We spend 22 billion minutes a month on Google websites

22

0.91

1.00

1.20

1.99

2.51

3.09

3.65

4.06

14.77

22.07

0 5 10 15 20 25

Sky Sites

Glam Media

Amazon Sites

AccuWeather Sites

eBay

Microsoft Sites

BBC Sites

Yahoo Sites

Facebook

Google Sites

Source: comScore MMX Multi-Platform, UK, March 2014

Top ten internet properties among the digital audience, by time spent Total Minutes (billions)


Digital advertising was worth £6.3bn across internet, TV and press brands

23

3,219

4,516

575

184

537

990

1,882

3,794

4,642

6,300

0 1000 2000 3000 4000 5000 6000

Cinema

Radio

Out of home

Direct Mail

Press brands

TV

Internet

Non-Digital

Digital

Source: AA/Warc Expenditure Report, July 2014

UK advertising expenditure: 2013 Expenditure (£ millions)

8 Figure 4.2

Digital display advertising grew by more than 22% in 2013

24

Source: IAB / PwC Digital Adspend 2008 – 2013

Digital advertising expenditure, by type: 2008 - 2013 £ millions

684 755 1,050 1,280 1,479 1,862 1,942 2,097

2,245 2,708

3,087 3,495

713 658 718

759 818

887

3,350 3,541 4,097

4,822 5,448

6,300

0

2000

4000

6000

2008 2009 2010 2011 2012 2013

Other

Classifieds

Paid for search

Display

Page 249 Figure 4.3

Mobile advertising spend doubled to more than £1bn in 2013

25

29 38 83 203

529

1,031

20 21 32

39 49

61

0

20

40

60

80

100

0

200

400

600

800

1000

2008 2009 2010 2011 2012 2013Mobile Advertising Expenditure Internet on mobile phone take-up

Source: IAB / PwC Digital Adspend 2008-2013; Ofcom consumer research.

Mobile advertising expenditure, and mobile internet take-up Expenditure (£ millions) \ UK adult take-up (%)

Page 251 Figure 4.5

Take-up of DVDs and Blu-Ray discs holds steady between 2005 and 2014…

26

93 92 88 81 84 79

31

80

0

20

40

60

80

100

Books Music CDs Video Cassettes DVDs*

2005

2014

Source: Ofcom Media Literacy Research 2005, Kantar Media Omnibus 2014 * Includes Blu-Ray discs in 2014

Take-up of physical media Adults (%)

Page 253 Figure 4.8

…but average DVD and Blu-Ray disc collection size increases

27

89 90

45 45

86 84

36

68

0

20

40

60

80

100

Books Music CDs Video Cassettes DVD discs*

2005

2014

Source: Ofcom Media Literacy Research 2005, Kantar Media Omnibus 2014 * Includes Blu-Ray discs in 2014

Size of physical media collection Adults with collection (%)


There are generational differences in music consumption…

28

63 72

85 91 91 89

82 70 67

47

32

11

88

70 58

39

22

7

0

20

40

60

80

100

16-24 25-34 35-44 45-54 55-64 65+

Physical Music Collection Digital Music Collection Music Streaming

Source: Kantar Media Omnibus 2014

Take up of physical music, digital music and music streaming, by age Adults (%)


…but digital video streaming has leap-frogged digital video ownership for all ages

29

40

25

6

82

66

28 29 17

4 0

20

40

60

80

100

16-34 35-54 55+

Download To Own Video Streaming SVOD

Source: Kantar Media Omnibus 2014

Take up of digital video services, by age Adults (%)


30

The telecoms industries

Nick Collins, Senior Telecoms Analyst

31

Summary • Total telecoms revenue but fixed broadband revenue

• Total fixed lines but retail fixed voice revenues

• Fixed call volumes while non-traditional communication • Retail mobile revenue as SMS use • Mobile data connections and use of mobile data services

• ADSL broadband connections while superfast broadband take-up

Total telecoms revenues fell by 1.7% in 2013

32

Source: Ofcom / operators / IDC Page 324 Figure 5.26

10.7 10.5 10.1 8.9 8.3 7.9

13.4 12.9 12.5 12.3 12.3 12.4

14.8 15.0 15.1 15.4 15.9 15.6

2.8 2.7 2.7 2.7 2.7 2.7

41.6 41.1 40.5 39.4 39.3 38.6

0

10

20

30

40

50

2008 2009 2010 2011 2012 2013

Corporatedata services

Retail mobile

Retail fixed

Wholesaleservices

Revenue (£bn)

Average household telecoms spend fell by 2.9% in 2013

33

Source: Ofcom / operators / ONS 6 Figure 5.54

27.59 25.67 25.49 23.80 22.85 22.32

52.32 49.95 49.32 48.70 48.23 45.65

11.77 11.59 11.28 11.79 12.49 13.19

£91.67 £87.21 £86.09 £84.29 £83.58 £81.17

3.9% 3.9% 3.8% 3.8% 3.8% 3.8%

0%

1%

2%

3%

4%

0

50

100

2008 2009 2010 2011 2012 2013

Fixed internet

Mobile voice &data

Fixed voice

As a proportion oftotal householdspend

£ per month (2013 prices) As a % of total expenditure

Total outgoing UK fixed and mobile voice call minutes fell by 3.9% in 2013

Source: Ofcom / operators Page 326 Figure 5.28

141 128 123 111 103 92

85 90 98 103 105 110

33 36 33 29 27 24

259 255 254 243 235 226

0

100

200

300

2008 2009 2010 2011 2012 2013

Pre-paymobile

Post-paymobile

Fixed

Billions of minutes

Fixed voice

Retail fixed voice revenues declined by 1.7%

36

Source: Ofcom / operators


5.3 5.0 5.0 5.2 5.3 5.5

1.4 1.3 1.2 1.1 1.0 0.9 0.6 0.5 0.4 0.4 0.3 0.3

1.7 1.6 1.5 1.2 1.0 0.9

1.3 1.2 1.1 1.0 0.9 0.8

10.2 9.6 9.3

8.9 8.6 8.4

0

2

4

6

8

10

2008 2009 2010 2011 2012 2013

Other calls

Calls to mobiles

International calls

UK geographiccalls

Line rental

Revenue (£bn)

The real price of a basket of residential fixed voice services increased in 2013

37



18.37 17.56 17.98 18.01 18.39 18.71

1.22 1.00 0.92 0.76 0.69 0.63 2.15 2.14 2.21 2.15 2.01 1.97

21.74 20.70 21.11 20.92 21.08 21.30

0

5

10

15

20

25

2008 2009 2010 2011 2012 2013

Calls to mobiles

International calls

Fixed access &UK geographiccalls


-4.8% 2.0% -0.9% 0.8% 1.1% Annual change -0.7%

The decline in fixed voice call volumes accelerated in 2013

38


91.9 85.1 82.8 74.6 69.0 60.8

7.1 6.7 6.7

6.5 5.8

4.9

13.5 12.3 11.8

10.3 9.4

8.4

28.2 23.7 21.7

19.7 18.3

17.5

140.7 127.9 123.0

111.1 102.5

91.6

0

50

100

150

2008 2009 2010 2011 2012 2013

Other calls

Calls tomobiles

Internationalcalls

UK geographiccalls

Minutes (billions)

39

Source: Ofcom research, data as at Q1 of each year Page 351 Figure 5.60

Use of non-traditional communication services is increasing

80 71

52

22 17

4

81 78

54

28 24

8

83 78

53

35 32

14

0

20

40

60

80

100

Mobilemessaging

Email Socialnetworking

sites

VoIP (voicecall only)

Mobile instantmessaging

Video calls

2012

2013

2014

Proportion of respondents (per cent)

The ability to video call and lower prices are the main advantages of using VoIP

40

Source: YouGov online survey Page 314 Figure 5.13

2%

9%

15%

17%

28%

38%

44%

55%

57%

61%

Other

I can see whether others are online

Call quality is better if the connection is fast enough

I can use three-way calling

I can send/receive message or data files while talking

I can receive and make calls from wherever I am

I can use video communication

Costs less than using my landline

Costs less than using my mobile phone

I can see people through video calling

% of all adults in the UK who use VoIP

The total number of fixed lines increased by 2.4%, although business lines fell in 2013

41

Page 331 Figure 5.36 Source: Ofcom / operators

23.5 23.4 23.8 23.9 24.4 25.0

10.7 10.2 9.7 9.4 8.8 8.3

34.2 33.5 33.4 33.3 33.2 33.4

0

10

20

30

40

2008 2009 2010 2011 2012 2013

Business

Residential

Lines (millions)

Fixed broadband services

Almost four in five UK premises are able to receive superfast broadband services

43

Source: Ofcom / operators, June 2014 data

Proportion of premises (per cent)

9 11 1

35 40

1

34 35

31

78 85

34

0

20

40

60

80

100

UK UK Urban UK Rural

Fibre-only

Cable and fibre

Cable-only

Nations reports Figures 5.2, 5.3 and 5.4

The number of ADSL broadband connections fell for the first time in 2013

44

Source: Ofcom / operator data Page 332 Figure 5.38

Connections (millions)

8.1 8.0 7.8 8.1 7.5 6.6

5.5 6.4 7.5 7.9 8.8 9.2

3.7 3.8 4.0 4.1 4.3 4.4 0.1 0.4 1.1 2.3

17.3 18.2 19.5

20.6 21.7 22.6

0

5

10

15

20

25

2008 2009 2010 2011 2012 2013

Others

Fibre

Cable

LLU-ADSL

Non-LLUADSL

Over a quarter of the fixed broadband connections were superfast in Q1 2014

45

Source: Ofcom / operator data Superfast is defined as a package having a headline speed greater than 30Mb/s

Page 310 Figure 5.8

0.1 0.1 0.1 0.2 0.4 0.6 0.8 1.1 1.4 1.9 2.3 3.2 3.9 4.4 5.0 5.6 6.1

0.3 0.4 0.5 0.9 1.8 2.8 4.1 5.2 6.4 8.8

10.9 14.9

17.5 19.9

22.3 24.6

26.7

0

10

20

30

0

2

4

6

8

10

2010

Q1

Q2

Q3

Q4

2011

Q1

Q2

Q3

Q4

2012

Q1

Q2

Q3

Q4

2013

Q1

Q2

Q3

Q4

2014

Q1

Superfastconnections(left axis)

Superfast as a% of allconnections(right axis)

Per cent Connections (millions)

46

Average price of a fixed broadband connection increased in real terms in 2013


£19.29 £17.81 £16.44 £16.55 £16.81 £16.96

0

5

10

15

20

2008 2009 2010 2011 2012 2013

£ per month

Average actual speed

-11.2% -7.7% +0.7% -7.7% +1.6% +0.9% Annual change

4.1Mbit/s (April)

6.2Mbit/s (November)





Increasing superfast broadband take-up is driving fixed internet revenue growth

47


0.1 0.1 0.1

3.1 3.2 3.2 3.4 3.7 4.0

3.2 3.3 3.2 3.4 3.7

4.0

0

1

2

3

4

5

2008 2009 2010 2011 2012 2013

Broadband

Narrowband

Revenue (£bn)

48


Satisfaction with fixed broadband speed has increased


45 42 39 39 41 47

36 38 41 41 39 37

81 80 80 80 81 84

0

20

40

60

80

100

2009 2010 2011 2012 2013 2014

Fairlysatisfied

Verysatisfied

Proportion of all adults with service (per cent)

Mobile telecoms

The total number of mobile subscriptions fell for the first time in 2013

50

Source: Ofcom / operators Note: Excludes M2M connections.


Subscriptions (millions)

47.5 47.6 44.9 42.5 39.9 36.1

30.0 33.0 36.7 39.8 43.5 46.9

77.5 80.6 81.6 82.4 83.4 83.1

0

20

40

60

80

100

2008 2009 2010 2011 2012 2013

Post-pay

Pre-pay

Falling SMS use resulted in a decline in retail mobile revenues in 2013

51



6.3 6.1 6.4 6.8 7.3 7.8

5.1 4.7 4.3 3.9 3.7 3.3

2.8 2.7 2.6 2.5 2.4 1.8

0.6 1.6 1.8 2.1 2.5 2.7 14.8 15.0 15.1 15.4 15.9 15.6

0

5

10

15

20

2008 2009 2010 2011 2012 2013

Out-of bundledata

Out-of-bundlemessaging

Out-of-bundlecalls

Access andbundled services

Revenue (£bn)

The real price of a basket of mobile services fell by 3.5% in 2013

52



10.09 9.19 9.26 9.64 10.10 10.12

5.07 4.16 3.49 2.92 2.47 1.99

5.77 3.56 2.88 2.43 2.26 2.19

£20.93

£16.90 £15.63 £14.99 £14.82 £14.30

0

5

10

15

20

25

2008 2009 2010 2011 2012 2013

Meteredmessaging

Metered voice

Line rental fee,UK landlinecalls andinclusive calls,texts and data


-13.7% -19.2% -7.5% -4.1% -1.2% -3.5% Annual change

53

More than half of new post-pay mobile contracts cost less than £20 a month

Source: GfK Retail and Technology UK Ltd


12 12 12 13 15 18 17 18 20 24 26 26 29 30 29 27 30 31 32 34 35 20 21 23 23 22 20 19 18 17 18 19 20 20 18 16 13 13 12 15 16 19 10 13 13 13 13 13 15 16 14 13 13 11 11 9 11 11 11 13 12 10 11 7

10 10 11 11 14 15 17 21 14 12 10 10 10 12 13 13 13 12 11 9 14

13 12 13 12 13 11 10 7 8 8 9 9 11 10 9 9 11 11 9 8 26 19 15 15 14 11 13 13 12 14 14 15 14 15 16 17 13 13 11 10 9 12 13 15 12 13 10 10 10 9 9 8 9 7 6 6 10 10 7 7 11 8

0%

20%

40%

60%

80%

100%

2009

Q1

Q2

Q3

Q4

2010

Q1

Q2

Q3

Q4

2011

Q1

Q2

Q3

Q4

2012

Q1

Q2

Q3

Q4

2013

Q1

Q2

Q3

Q4

2014

Q1

£40+

£35-39.99

£30-34.99

£25-29.99

£20-24,99

£15-19.99

£0-14.99

Proportion of sales (%)

There were 55 million mobile data connections in the UK at the end of 2013

54



4.9 5.2 5.1 4.9

24.6 30.1

38.4 44.5

3.2 4.1

5.1 5.6

32.6 39.4

48.6 55.0

0

20

40

60

2010 2011 2012 2013

M2M

Internet onhandset

Dedicatedmobilebroadband

Connections (millions)

55

Use of mobile data services is increasing



40

29

19 19

47

36 29

26

52 45

35 34

0

10

20

30

40

50

60

Web browsing Emailing Downloading apps Instant messaging

2012

2013

2014

Proportion of mobile users using service (per cent)

4G mobile covers nearly three quarters of UK premises

56

Source: Ofcom based on operator data, June 2014 data

73.0 79.3

34.8

0

20

40

60

80

UK UK Urban UK rural

Proportion of premises with 4G coverage (per cent)

Nations reports Figure 5.7

4G take-up growing steadily

57

Source: Ofcom research April 2014

Page 306 Figure 5.3

12%

88%

4G

Non-4G

Proportion of mobile users (%)

58

Post

Steven Cape, Senior Analyst, Market Intelligence

Total mail revenues have risen by 2.9%...

59

6,953 6,837 6,653 6,899 7,303 7,514

6,841 6,697 6,505

6,744 7,141 7,339

6,120 5,772 5,425 5,475 5,696 5,844

721 924 1,080 1,270 1,445 1,495

112 140 142 150 157 163 0

2,000

4,000

6,000

8,000

2008 2009 2010 2011 2012 2013

Total market

Royal Mailtotal

Royal Mailend-to-end

Royal Mailaccess

Accessoperators

Revenue (£m)


Page 380 Figure 6.7

…while mail volumes have declined by 5%

60

20,577 18,651

17,546 16,676 15,545 14,764 15,574

12,534 10,629

9,502 8,299 7,523 5,003

6,105 6,906 7,166 7,228 7,185

12 11 9 18 56 0

6,000

12,000

18,000

24,000

2008 2009 2010 2011 2012 2013

Total mail

Royal Mail end-to-end

Royal Mailaccess

Other operatorsend-to-endletters

Volume (million items)


Page 381 Figure 6.8

25% 33%

40% 43% 46% 49%

0%

10%

20%

30%

40%

50%

2008 2009 2010 2011 2012 2013

61

Access mail accounts for 49% of total mail

Proportion of access in total mail volume

Year-on-year growth rate of access volumes

39.1% 20.3% 14.8% 2.2% 0.8% -0.6%


Page 382 Figure 6.9

End-to-end volume has grown but is less than 0.5% of total volume

62

11.8 11.3 8.5 18.0

56.1

0

10

20

30

40

50

60

2009 2010 2011 2012 2013

Volume (million items)



46

82

38 17

32 24 24 32

0

30

60

90

Directmail

Transactionalmail

Catalogues /brochures

Subscriptionmagazines

Largerparcels

Smallerparcels

Personal letters

Invitations /greetings

cards

63 63

The majority of mail received by consumers is sent by businesses

Proportion of respondents (%)

Source: Ofcom research


Business to consumer Parcels Consumer to consumer

Residential consumers are more likely to receive parcels from Royal Mail

64

Proportion of consumers reporting delivery of parcels, by company Company parcels delivered by (% of all who have received a parcel in the past week)

50%

21%

19%

10%

Only RoyalMail

Royal Mailand anyother/sOnly other/s

Don't know

71

9 8 7 6 6 4 4 4 0 %

20 %

40 %

60 %

80 %

Page 396 Figure 6.26 Source: Ofcom research

65

Questions?

the communications market report 2014 - home - ofcomthe communications market report 2014 . 7 august...

Documents