29 November 2006: Ofcom today published the International Communications Market Report - the latest in the Ofcom Communications Market Report (CMR) series.
The publication analyses trends in the £840bn annual turnover global television, radio, telecommunications and wireless communications industries. It also compares UK data, consumer attitudes and industry performance against that of China, France, Germany, Italy, Japan, the Republic of Ireland, the Netherlands, Poland, Spain, Sweden and the United States.
Key points include:
In every country surveyed, broadband usage appears linked to a decline in conventional television viewing. On average around one-third of consumers with broadband access said they watch less television since going online. Conversely, internet access appears to have a positive effect on radio listening, offsetting a decline in hours spent listening to conventional broadcast radio.
China leads the world in viewing music videos and television programmes over broadband; 76% of Chinese broadband users watch downloadable or streaming music video clips and 70% watch TV over broadband.
Among 18-24 year old broadband users, the UK is second only to China in its enthusiasm for online video. 77% of UK 18-24 year old broadband users watch music videos online (87% in China) and 60% watch TV programmes via their broadband connections (82% in China).
UK consumers buy more music online than consumers in any of the other European countries in the report, spending more than twice as much per head of population than the French or Germans.
However, UK adoption of new services such as Voice over Internet Protocol (VoIP - phone calls over broadband) and Internet Protocol TV (IPTV - television programmes and video on demand over broadband) is slower than in other countries. 5.4% of French consumers use VoIP services and 1.6% subscribe to IPTV services, compared to 0.4% of UK consumers for each of these services.
Radio is more popular in the UK than in any other country surveyed; UK average weekly listening per person is just under 23 hours. Listening to publicly-funded radio stations (for example, the BBC in the UK or NPR in the US) varies widely. After Sweden, the UK has the highest proportion of listening to publicly-funded radio (55% of total hours) of the countries surveyed.
The internet attracts almost 10% of all advertising spending in the UK; a higher proportion than in any other country surveyed.
The Republic of Ireland has the largest number of Wi-Fi hot spots per head of population (18.3 per 100,000 people), followed by the UK at 17.6 hot spots per 100,000 people. This compares to 10.5 in Germany, 8.8 in the US and 5.3 in Japan.
The adjusted data suggest that UK households which make extensive use of the latest communications services benefit from greater value than households in any of the five countries surveyed. A household with two mobiles, a high level of telephone use, a premium broadband connection (with a high-end PC) and a premium subscription television account (viewed on a flat screen digital TV set) would typically pay £188 per month in the UK compared with £201 in Italy and £247 in the most expensive country - the United States.
UK households with the lowest use of communications services - typically with low fixed-line phone use and free-to-air television - also benefit from greater value than households in the five other countries surveyed. The lightest users pay £28 per month in the UK compared to £31 in France and £34 in Italy.
OTHER INDUSTRY TRENDS
Average annual television revenue in the United States significantly exceeds that of Europe (£74.7bn versus £50.8bn) despite the much smaller US population. However, of the countries surveyed, the UK has the highest television revenues in Europe (£9.9bn), second only to the United States on a per head of population basis (£164 per capita compared to £253 for the US).
The UK leads the world in take-up of digital television. Around 70% of UK households watch digital television on at least one TV set in the home compared to 54% in the United States.
A higher proportion of UK consumers benefit from DAB digital radio networks than in any other country. These reach 85% of the UK population compared to 82% in Germany.
Public funding accounts for more than half of total UK radio industry revenues. The UK radio industry now attracts less than 4% of all UK advertising spending; in the United States the radio industry attracts 11.5% of advertising spending.
Take-up of broadband is now higher in the UK (around 39% of households) than the United States (38%), France (38%) and Germany (28%), but behind Japan (44%), Sweden (45%) and the Netherlands (58%).
Italy has the highest mobile phone penetration; there are more than twelve active mobile phone subscriptions for every ten people in the population as a whole (123% penetration). The UK follows closely behind with just under eleven subscriptions for every ten people (108% penetration). The UK and the United States have the most competitive mobile phone markets with the largest number of competing providers.
Ongoing consolidation in the UK communications sector has led to an increase in the number of consumers taking double- or triple-play products (typically fixed-line phone, broadband and subscription television) from the same company. As of September 2005 35% of UK households were taking at least two services from a single provider, up from 29% in March of the same year.
Ofcom Chief Executive Ed Richards said: "Rapidly converging technologies and intense competition between providers are transforming the global communications sector."
"As the UK market evolves, delivering greater innovation, choice and value for consumers, it becomes increasingly important to consider its future in the context of these emerging global trends."
The Communications Market 2006 International report is available online at: http://www.ofcom.org.uk/research/cm/icmr06/
Printed copies of the report can be ordered via The Stationery Office at: http://www.tsoshop.co.uk
