Ofcom analyst briefing...films/movies Back-catalogue films/movies Programmes/series made in own country Programmes/series made in the US* Original programmes made by the service provider

International Communications

Market Report 2015

10 December 2015

Ofcom analyst briefing

1

2

Agenda

Introduction and Market Overview

James Thickett, Director of Research

Trends in the television and audio-visual industries

Jane Rumble, Director of Market Intelligence

Trends in telecoms

Max Fernando, Telecoms Analyst

Internet and online content

Andrew Jackson, Senior Analyst

Post

Steven Cape, Senior Analyst, Market Intelligence

Comparative international pricing

Nicholas Collins, Senior Telecoms Analyst

3

Introduction and Market overview

James Thickett,

Director of Research

4

One of three Communications

Markets Reports

International Communications

Market Report 2015

Research Document

Publication date: 10 December 2015

5

Methodology Combination of industry data (2014 and 2015) and

consumer research data (September - October 2015)

• Industry data (18 countries)

- Telecoms and media industry data: IHS

- Pricing: Teligen

- Post: WIK

- Other third-party sources

• Online consumer research (9 countries, >=1000 consumers in each country) to

examine the take-up and use of communications services. It focused on:

- Device ownership

- Use of the internet to watch AV content

- Awareness and take up of 4G mobile services and superfast broadband

- Main source of news

- Use of, and attitudes towards, postal services

Third-party sources of data include: comScore, Deloitte, IHS, Populus, PricewaterhouseCoopers, Teligen, Wik Consult and

YouGov among others.

6

Global communications revenues 2010 - 2014

Source: Data derived from various sources: PwC Global Entertainment and Media Outlook 2015-2019 @ www.pwc.com/outlook for television and radio

revenues, Wik Consult / Ofcom estimates for postal revenues. IHS / industry data / Ofcom for telecoms revenues. Ofcom has used IMF 2014 average

exchange rates in converting from local currency to GBP.

Communications revenues continue to rise

785 798 825 841 846

206 216 226 233 244

73 75 73 72 72

25 26 26 27 28 £1,089bn £1,114bn

£1,150bn £1,173bn £1,190bn

0

200

400

600

800

1,000

1,200

1,400

2010 2011 2012 2013 2014

Radio

Post

Television

Telecoms

3.9% 2.9%

0.7% -0.1%

5.0% 4.3%

0.5% 1.9%

1.5% 2.3%

CAGR

2010-

2014

Year-

on-year

growth

Revenue (£bn)

All

http://www.pwc.com/outlook

7

Communications sector revenues, 2014

UK ranked 5th in terms of revenue

110

79

172

22

19

103

10

29

1

1

13

135

110

316

0 50 100 150 200 250 300 350

CHN

JPN

USA

Revenue (£bn)

6 15

19 30

20 3

6 4

7 14 15 16

25 19

29

0.6 5

4 11

6 1

2 2

2 3

4 6

20 8

14

0

1 2

2

1 1

2 1

1 3

7 7

4

1 0

3 1

1

7 21

23 43

27 4

9 7

12 18

21 25

55 36

48

0 10 20 30 40 50 60

NGA

IND

RUS

BRA

KOR

SGP

POL

SWE

NED

ESP

AUS

ITA

GER

FRA

UK

Telecoms

Television

Post

Radio

YoY %

change

1.1%

3.0%

6.0%

1.5%

-1.0%

-0.5%

-8.4%

1.0%

-8.3%

-4.0%

-0.4%

-1.7%

2.8%

4.4%

3.9%

3.4%

11.1%

4.3%

Source: Data derived from various sources: PwC Global Entertainment and Media Outlook 2015-2019 @ www.pwc.com/outlook for television and radio

revenues, Wik Consult / Ofcom estimates for postal revenues. IHS / industry data / Ofcom for telecoms revenues. Ofcom has used IMF 2014 average

exchange rates in converting from local currency to GBP.

http://www.pwc.com/outlook

8

Trends in the television

and audio-visual industries

Jane Rumble,

Director of Market Intelligence

Global TV industry revenues by source

9

Source: Data derived from PwC Global Entertainment and Media Outlook: 2015-2019

Global TV revenues up 5% YoY

101 108 113 118 125

20 20 20 21 21

85 88 92 94 99

0%

20%

40%

60%

80%

100%

2010 2011 2012 2013 2014

All

Annual revenue (%)

£244bn £226bn £216bn £233bn £206bn

Advertising

Public TV

license fees

Subscriptions

10

Source: IHS / industry data / Ofcom.

Rapid increase in online TV revenue

102 57 83

185 188

105 123

261 242 177 167

389 414

233 222

515

631

311 330

579

908

366 386

643

0

200

400

600

800

1,000

UK FRA GER JPN

2009 2010 2011 2012 2013 2014

Online TV video revenue (£m)

1.3 1.7

2.7

4.4

5.8

6.8

0

1

2

3

4

5

6

7

8

USA

Online TV video revenue (£bn)

Online TV and video revenue for selected ICMR countries

Take-up of pay TV varies by country

11

Source: IHS/ industry data/ Ofcom

Take up of pay and free-to-air television: 2014

YoY pp change

in pay TV

households

+4 +2 0 0 0 0 +2 +7 +1 -1 -1 0 +3 +2 +3 0 +1 +4

59

77

55

30

87

69

32 29

99

83 83

63

97

33

66

85

62

22

41

23

45

70

13

31

68 71

17 17

37

3

67

34

15

38

78

0%

20%

40%

60%

80%

100%

UK FRA GER ITA USA JPN AUS ESP NED SWE POL SGP KOR BRA RUS IND CHN NGA

Free TV

Pay TV

TV homes (%)

UK consumers more likely to watch TV

online…

12

Source: Ofcom consumer research October 2015. Base: All respondents

Use of any online services to watch TV or films

Proportion of respondents (%)

66

50 45

61 57

43

57 61 52

15

16 14

16

9

11

12 15

16

7

10 13

8

7

7

9

9

11

88

76 71

85

73

61

78

85 79

0

20

40

60

80

100

UK FRA GER ITA USA JPN AUS ESP SWE

Year

Month

Week

Within the last:

…driven by free catch-up services

13

Source: Ofcom consumer research September - October 2015

Use of free-to-access broadcaster catch-up TV services


44

29 20

28 22 17

32 28 30

26

24

16

24

16

8

19 24 20

13

15

18

17

13

5

14 15 15

82

67

54

70

48

31

64 67 65

0

20

40

60

80

100


Year

Month

Week

Within the last:

…and growing popularity of SVoD

14

Source: Ofcom consumer research – October 2015

Use of non-broadcaster SVoD services


26

13 16 18

38

9

22 15

10

13

8 7

11

11

5

9

12

8

8

6 8

8

7

4

6 10

10

47

27

30

37

56

19

37 37

27

0

20

40

60


Year

Month

Week

Within the last:

Back catalogue films, the most accessed

content on SVoD

15

61

54

53

50

32

12

63

43

27

44

20

16

60

62

40

57

30

13

58

45

32

34

18

13

69

52 5

9

32

44

20

48

67

44

41

16

5

65

57

44 5

2

38

17

65

42

38 4

6

17

11

48

47

39

58

37

14

0

20

40

60

80

Recently releasedfilms/movies

Back-cataloguefilms/movies

Programmes/seriesmade in own

country

Programmes/seriesmade in the US*

Originalprogrammes made

by the serviceprovider

Children'sprogrammes


Source: Ofcom consumer research September – October 2015

Types of content accessed via SVoD services

Proportion of respondents who use a SVoD service (%)

Increase in VoD enabled devices

16

42

30

36

41

32

17

39

45

40

0

20

40

60


Proportion (%) of all respondents


Household ownership of Connected TV sets

UK personally use a tablet = 54%

UK personally use a smartphone = 67%

UK watches more catch-up on connected

TVs

17


Types of AV content watched on a connected TV

Proportion (%) of respondents

48

70

54

44 41

54 49

53

43

51 49 43

53 54 51

60

43 50

70

51

32

24 25

33 39

51 50 48 53

63

44

55

37

45

54

36

0

20

40

60

80

100

Live TV broadcast overthe internet

Catch-up TV Video-on-demand orinternet streamed films

Watching video clips(e.g. via YouTube)


18

Daily TV viewing per head, 2013 - 2014

Source: Médiamétrie, Eurodata TV Worldwide. Note: Figures include timeshifted viewing via DVR.

Viewing to ‘traditional’ live TV down 5%

YoY in UK

220 221 221

262 282

264

204

239

200

153

260

196 224

239

157

0

50

100

150

200

250

300

UK FRA GER ITA USA JPN AUS ESP NED SWE POL KOR BRA RUS CHN

2014 average

223 mins

Proportional change in minutes of viewing per person per day, 2013 - 2014 Minutes

19

Internet and online content

Andrew Jackson,

Senior Convergence Analyst

Internet share of all advertising spend is

highest in the UK and China

Source: Warc data (www.warc.com)

Please refer to notes on adspend data for further detail and source information.

http://www.warc.com/NotesOnAdspendData

Internet share of all advertising spend (%)

27

15 18

10

17 15 16

12

22 23 19

4

20

4

10 7

14

43

30 27 26

30

20

34

21

39 42

29

14

31

21

25

6

43

0

10

20

30

40

50

UK FRA GER ITA USA JPN AUS ESP NED SWE POL SGP KOR BRA RUS IND CHN

2009 2014

http://www.warc.com/

UK fixed internet advertising spend

continues to grow but declines elsewhere

21

84.29

44.30 51.36

19.02

70.39

34.25

82.10

15.60

65.92

92.22

0

20

40

60

80

100

UK FRA GER ITA USA JPN AUS ESP NED SWE

2010 2011 2012 2013 2014

Fixed internet advertising expenditure per head: 2010-14

Internet advertising spend per head (£)

5% 16% 0% 3% -4% -8% -16% -2% 5% 8% YoY

Growth

Source: Ofcom analysis based on data from PwC Global Entertainment and Media Outlook 2015-2019 @ pwc.com/outlook.

Interpretation and manipulation of data are solely Ofcom’s responsibility. IHS/Ofcom for population figures

UK mobile internet advertising spends

remains the greatest

22

24.77

1.06 2.80 2.00

23.69

6.95

17.66

1.17 0.58

13.37

0

5

10

15

20

25

UK FRA GER ITA USA JPN AUS ESP NED SWE

2010 2011 2012 2013 2014

Mobile advertising expenditure per head: 2010-14

Internet advertising spend per head (£)

57% 29% 34% 20% 75% 13% 116% 51% 16% 64% YoY

Growth

Source: Ofcom analysis based on data from PwC Global Entertainment and Media Outlook 2015-2019 @

pwc.com/outlook. Interpretation and manipulation of data are solely Ofcom’s responsibility. Population figures from Ofcom/IHS

Smartphone and tablet use continues to

grow across comparator countries

23

67 66 70

79

57

77 69

83

74

44 38 35

51

34

25

42

52

37

0

20

40

60

80

100


Smartphones Tablets


Use of smartphones and tablets

Respondents (%)

Laptop and desktop online consumption is

broadly similar between countries

24

Top ten web properties accessed on laptop and desktop computers

UK FRA GER ITA USA- JPN AUS ESP

1 Google Sites - Google

Sites -

Google

Sites -

Google

Sites -

Google

Sites - Google Sites - Google Sites - Google Sites -

2 Microsoft

Sites +1 Facebook +1 Facebook - Facebook - Facebook +2 Yahoo Sites -

Microsoft

Sites - Facebook -

3 Facebook -1 Microsoft

Sites -1

Microsoft

Sites +2 ItaliaOnline - Yahoo Sites -1

Microsoft

Sites +1 Facebook -

Microsoft

Sites -

4 Amazon

Sites +1

CCM-

Benchmark +1

Amazon

Sites -1

Microsoft

Sites +1

Microsoft

Sites -1 FC2 inc. -1 Yahoo Sites -

Unidad

Medios

Digitales

-

5 BBC Sites +1 Webedia

Sites -1 eBay -1 Banzai +1

Amazon

Sites +1

LINE

Corporation N

News Corp

Australia N Prisa +2

6 eBay +1 Yahoo Sites - Axel

Springer SE -

Wikimedia

Foundation

Sites

+1 AOL, Inc. -1 DMM +2 TripAdvisor

Inc. N Yahoo Sites -

7 Yahoo Sites -3 Orange

Sites -

Deutsche

Telekom -

Amazon

Sites +3 Mode Media -

Amazon

Sites -

Wikimedia

Foundation

Sites

-1 Vocento +1

8

Wikimedia

Foundation

Sites

-

Schibsted

Media

Group

- Hubert

Burda Media +1 eBay -

Wikimedia

Foundation

Sites

N Rakuten Inc -2 eBay -3 Schibsted

Media Group +1

9 TripAdvisor

Inc. N

Amazon

Sites N

United-

Internet

Sites

-1 Yahoo Sites -5 CBS

Interactive - Facebook N Mode Media N Amazon Sites N

10 Apple Inc. -1 Solocal

Group -1

Wikimedia

Foundation

Sites

-

Gruppo

Editoriale

Espresso

N eBay -2

Kadokawa

Dwango

Corporation

N

Telstra

Corporation

Limited

-2 Alibaba.com

Corporation N

Source: comScore MMX, home and work panel, August 2014 and August 2015, persons 15+

25

Top ten web properties accessed on a mobile phone, by

country

Source: comScore MMX, home and work panel, August 2014 and August 2015, persons 15+

UK FRA GER ITA USA- JPN AUS ESP

1 Google

Sites

CCM-

Benchmark

Deutsche

Telekom

RCS

MediaGroup Google Sites AOL, Inc.

News Corp

Australia

RCS

MediaGroup

2 Facebook Webedia Sites AccuWeather

Sites Yahoo Sites Facebook

TripAdvisor

Inc.

Gumtree

Sites Vocento

3 BBC Sites Axel Springer

SE

Axel Springer

SE

TripAdvisor

Inc. Yahoo Sites

DAILYMOTION.

COM Yahoo Sites Prisa

4 Amazon

Sites

Groupe

Amaury

Shazam

Entertainment

Ltd

Banzai Amazon Sites Indeed BUZZFEED.C

OM

Mediaset

España

5 Sky Sites

Shazam

Entertainment

Ltd

Webedia Sites ItaliaOnline AOL, Inc. Rakuten Inc Mail Online /

Daily Mail

Grupo

Heraldo

6

Mail

Online /

Daily Mail

Cerise Media AOL, Inc.

Shazam

Entertainme

nt Ltd

Comcast

NBCUniversal JIJI Press Ltd AOL, Inc. Yahoo Sites

7 Microsoft

Sites

DAILYMOTION.

COM Spotify Ciaopeople

Microsoft

Sites Yahoo Sites Mode Media Grupo Godo

8 Yahoo

Sites

TripAdvisor

Inc. Yahoo Sites

Leonardo

ADV

CBS

Interactive

FASHIONSNAP

.COM LIKES.COM

Schibsted

Media Group

9 eBay Orange Sites TripAdvisor

Inc. Populis Apple Inc.

Weather

Company, The

9NEWS.COM.

AU

Zeta Gestión

De Medios

1

0

Trinity

Mirror

Group

Yahoo Sites Xing Gruppo

Mediaset Twitter

AccuWeather

Sites

Amazon

Sites

Weblogs SL

Sites

But mobile online consumption varies

much more

26

Trends in telecoms

Max Fernando,

Telecoms Analyst

131 124 114 105 96 87

73 81 89 99 110 124

236 234 232 227 217 206

87 102 121 143 162 173

526 542 555 574 585 589

0

200

400

600

2009 2010 2011 2012 2013 2014Mobile Data Mobile Voice

Fixed Broadband Fixed Voice

27

Total comparator country retail telecoms revenue

Source: IHS / industry data / Ofcom

144 141 139 133 125 119

152 159 162 172 173 172

105 107 108 111 114 117

125 135 146 158 173 180

526 542 555 574 585 589

2009 2010 2011 2012 2013 2014

BRIC & Nigeria Asia Pacific USA EU

£bn

Growth driven by mobile and fixed

28

Telecoms service retail revenues, by sector


The US and China contributed almost half

of the total retail telecoms revenue in 2014

9 4 6 4 23 11 3 3 1 1 1 0 2 9 4 2 5 0

15 11 15 10

114

43

8 8 4 3 4 2 13 15 12 13

82

6

5 4 3

2

34

25

5 3 1 1 1 1 5

6 3 1

24

0

29 19 25

16

172

79

15 14 7 4 6 3 20

30 19 15

110

6

0

50

100

150

200


Fixed

Mobile

Fixedbroadband

£bn

0.4 -5.2 -1.3 -8.2 2.5 2.6 0.4 -9.3 -0.1 2.1 -2.3 4.3 1.5 3.0 5.0 6.6 9.8 5.1 5 year

CAGR (%)

29

Fixed voice connections per 100 population

52

22 24 31

25 23 35 33

10 21

13 26

34

19 25

2

18

0

9

39 21 5 16 22 3 7

31 18

4

10

20

4 2

1

0

61 60

45

37 41

45 38 40 42 39

16

36

54

23 27

2

19

0 0

20

40

60

80


ManagedVoIPconnections

PSTN lines


Connections per 100 people

PSTN lines fell in most countries while

managed VoIP connections grow

Total

YoY

change

1.5 -0.8 -0.4 0.0 -1.1 -0.3 -2.0 -0.2 -1.2 -1.8 -1.6 -0.2 -1.4 0.0 -1.9 -0.2 -1.1 -0.1

78 73

84

72

49

65 68

79

42

63 68

78

60

43 36

50

70

34

0

20

40

60

80

100


Landline athome

Regularly usea homelandline

30

Household take-up and personal use of fixed telephony services

Source: Ofcom research, September - October 2015


Percentage point

difference

A significant proportion of UK adults have a

fixed line at home but are not regular users

15 5 6 12 6 29 18 9 8

-3 -1 +4 +3 +3 +2 +1 +2 N/A Delta on last year’s pp

difference

18

20

25

13

79

32

5 10

6

3 5

1

16

11

12

8

24

26

29

14

96

49

7 1

3

7

3 8

2

19

21 27

18

0

25

50

75

100


2009

2014

31

Fixed broadband connections


Fixed broadband continues to grow …

Connections (millions)

5.3 5.7 3.2 1.8 4.0 8.6 5.7 6.2 2.3 1.9 10.0 10.5 3.5 13.3 16.9 18.0 18.5

5 year

CAGR

(%)

107

251

3 3 3 3 3

15

2 2 5 6

8

24 22

13 10

7

19

32

11 9

17

31

23

49

0

10

20

30

40

50

UK FRA GER ITA USA JPN AUS ESP NED SWE SGP KOR

2009

2014

32

Ave. monthly fixed broadband data volume per person


… as does fixed broadband data usage

GB per month

46 33 29 23 45 16 44 34 27 41 24 15 5 year CAGR

(%)

35

12 21

4

62

81

19 24

46 42

28

83 89

11

50

3

16

0

20

40

60

80

100


33

Fixed broadband connections 30Mbit/s or higher, end 2014

Source: IHS / Ofcom / operator data

Proportion of connections (%)

UK leads EU5 for high speed broadband take-

up but lags other countries

10 4 12 3 29 6 2 7 5 4 -12 -4 3 2 5 0 4 YoY pp

change

236 234 232 227 217 206

32 35 38 39 37 33

55 67 82 104 125 139

322 336

353 370 379 378

0

100

200

300

400

2009 2010 2011 2012 2013 2014

£bn

Total

Mobile internet

Messaging

Voice

34

Total comparator country retail mobile telecoms revenue, by service


5 year

CAGR

Annual

growth

-0.1% 3.3%

11.2% 20.5%

-9.3% 1.1%

-5.1% -2.7%

Mobile revenues fell by just over £500m

35

Use of data services on mobile phones


Smartphones help push mobile data services

Proportion (%) of mobile users

88

69

46

39

87

68

33

29

83

62

50

24

90

74

75

50

73

72

34

38 5

4

88

21 3

5

89

68

39

32

67

69

75

46

92

72

41

36

0

20

40

60

80

100

SMS Email Instant messaging Twitter


Reasons for choosing to purchase 4G

36


35

33

31

33

26

26

35

38

31

21

39

22

24

37

44

43

36

29

32

19

31

49

43

40

36

29

20

30

36

39

34

34

26

24

38

48

23

35

8

31

9

31

36

32

24

29

24

20

44

45

32

46

38

39

20

38

27

21

22

29

19

15

44

0

10

20

30

40

50

60

Quickerdownloadspeeds

More reliabledata connection

Quickerstreaming

speeds

Improved datacoverage

To takeadvantage of

newest phones

To keep up withtechnology

developments

It was providedautomatically by

the operatorwithout me doing

anythingUK FRA GER ITA USA JPN AUS ESP SWE

Proportion (%) of respondents who have or are likely to get 4G

Direction of arrow indicates a statistically significant difference compared to last year

The top reason to purchase 4G is the

increased speeds, in most countries

251

198

271

469

85

3

909

448

239

169

2,3

05

280

1,3

29

1,3

69

128

96

8 81

31

362

397

398

684

1,7

71

1,4

95

481

370

313

3,0

97

529

1,5

37

2,0

24

197

181

18

126

53

0

500

1000

1500

2000

2500

3000

3500


2013

2014

37

Average per-capita monthly mobile data use


Mobile data usage increases

MB per month

44 101 47 46 108 64 7 54 85 34 89 16 48 54 89 119 55 71

YoY

change

(%)

63

68

81

39

97

82

85

47

90 9

9

66

98

100

32

36

1

1 9

84

75

92

77

98

99

87

76

100

99

80

99

100

42 5

1

2

73

11

0

20

40

60

80

100


2013

2014

38

4G population coverage (%) by country

Source: IHS

4G mobile coverage increased in most

comparator countries

Population coverage (per cent)

21 7 11 38 1 17 2 29 9 0 14 1 0 10 15 1 72 2 YoY pp

change

3 4 5 1

25 22 21

3 4

11

24

51

28

14 12

4

40 37 39

13

19

27

39

63

0

20

40

60

80

UK FRA GER ITA USA JPN AUS ESP NED SWE SGP KOR

2013

2014

39

4G as a proportion of total mobile subscriptions: end 2014


Asia Pacific countries and the US have the

highest proportion of 4G connections

Proportion of mobile connections (%)

40

Comparative international pricing

Nick Collins,

Senior Telecoms Analyst

41

Price benchmarking methodology

• We compare UK prices to those in the other EU5 countries and the US

• Pricing model developed by Teligen

• Includes tariffs from the largest providers of each service (over 15,000 in

2015)

• Takes connection fees, hardware costs and promotions into account

• Construct five household usage profiles and consider the minimum price

required to fulfil these requirements

42

Summary of households usage profiles used

in the analysis

Source: Ofcom

‘Typical’

household

type

Summary Fixed

voice

Mobile

voice

Mobile

messaging

Mobile

phone data

Fixed line

broadband

Mobile

broadband Television

1 Basic needs A low use

household

Medium

use Low use None None None None

Free-to-

air

2 Late adopters

A basic

broadband

household

High use Low use Low use Low use Low use None Free-to-

air

3 A mobile

‘power user’

A mobile-

only

household

None High use High use High use

4G None High use

Basic

pay-TV

with DVR

4 Connected

family

A family

household

Medium

use

Medium

use High use

Medium

use

Medium

use None

Basic

pay-TV

with HD

DVR

5 Sophisticated

couple

An affluent

two person

household

Low use Medium

use

Medium

use

Medium

use

High use

superfast None

Premium

pay-TV

with HD

& DVR

43

Examples of combinations of multi-play and

single service offers

Single services

Multi-play offer

Source: Teligen

Household

requirement Fixed voice Mobile Television

Multi-play offer

Single services

Multi-play offer

Single services

Multi-play offer

Single services

Television

Multi-play fixed voice & broadband

Triple-play fixed voice, fixed broadband &

Single mobile tariff Single TV service

Single mobile tariff

Single mobile tariff Single broadband

bundled TV service

bundled TV service Multi-play landline &

Quad-play fixed voice, fixed broadband, mobile and TV service

Fixed b/band

44

UK stand-alone fixed voice prices increased

by 12% in 2015

Comparative stand-alone ‘weighted average’ fixed-line voice pricing

Source: Ofcom, using data supplied by Teligen

23 26 28 28 27 28 27 29 25 26 26 27

24 28 32 32 30 32 29 30 29 30 29 27

21 24

23 24 23 24 23

26 21 22 23 19

21 23 19 20 20 21

18 25

20 21 21 15

0

20

40

60

80

100

120

20

14

20

15

20

14

20

15

20

14

20

15

20

14

20

15

20

14

20

15

20

14

20

15

Household 5(100 mins)




UK

3

GER

5

FRA

4

ESP

2

ITA

6

USA

1

Average monthly price (£)

2015 rank

12% 2% 4% 14% 5% -11%

12%

4%

-0%

-2%

10%

-3%

9

8

7

8

10

9

12

10

13

12

26

27

9

9

10

10

14

12

14

14

15

15

31

32

16

17

20

24

32

35

27

30

30

38

41

41

28

31

29

28

43

41

36

33

44

57

64

54

28

35

0

41

45

0

49

55

0

49

48

0

47

51

0

57

62

23

21

0

22

23

0

51

37

0

35

39

0

40

39

0

53

49

44

54

0

52

49

0

66

83

0

63

60

0

64

80

0

74

69

54

64

0

53

59

0

93

88

0

89

83

0

97

93

0

104

102

0 100 200 300 400 500

2014

2015

2014

2015

2014

2015

2014

2015

2014

2015

2014

2015

Connection 1 (50mins, 0SMS, 0GB data)

Connection 2 (50mins, 25SMS, 0.1GB data)

Connection 3 (150mins,200 SMS, 0.3GB data)

Connection 4 (250mins,100 SMS, 0.4GB data)

Connection 5 (200mins,50 SMS, 0.5GB 4G data)

Connection 6 (100mins,250 SMS, 2GB data)

Connection 7 (300mins,150 SMS, 1GB 4G data)

Connection 8 (500mins,200 SMS, 5GB 4G data)

45

UK weighted average mobile prices

increased by 12% in 2015

Comparative stand-alone ‘weighted average’ mobile pricing


UK

GER

FRA

ESP

ITA

USA


1

4

2

5

3

6

2015

rank

-4% 4% 21% -5% 19% 5%

YoY change

(%)

46

The UK has the cheapest ‘lowest available’

stand-alone fixed broadband prices in 2015

Comparative stand-alone ‘lowest available’ fixed-line broadband pricing


14 12 17 18 17 19 21 24 32 38 28 26

14 12 17 18 17

24 27 24

32 38

28 30 16 19

36 36 22

25 27 24

32

38

34 38

0

20

40

60

80

100

120

20

14

20

15

20

14

20

15

20

14

20

15

20

14

20

15

20

14

20

15

20

14

20

15

≥30Mbit/s, 100GB data

>10Mbit/s,50GB data

>5Mbit/s,25GB data

UK

1

GER

2

FRA

4

ESP

6

ITA

3

USA

5


2015 rank

-1% -10% 0% -17% -18% 38%

47

The UK had the third-lowest prices for mobile

broadband services

Comparative stand-alone ‘lowest available’ mobile broadband pricing


7 7 9 7 12 14 5 5 11 11 12 15

15 14 13 13 20 19

5 5

25 22 20 28 16 17 15 13

28 28

13 9

31 22 29

40

0

20

40

60

80

100

20

14

20

15

20

14

20

15

20

14

20

15

20

14

20

15

20

14

20

15

20

14

20

15

5GB 4Gpermonth

3GB 3Gpermonth

1GB 3Gpermonth

UK

3

GER

4

FRA

2

ESP

5

ITA

1

USA

6


2015 rank

17 19 22 24 16 16 11 9 35 36

17 39 17 19 22 24

22 23 11 9

35 36

17

43 63 55 40 24 29 30

38 34

56 66

67

76

12 12 10

10 17 17 9

9

0

50

100

150

20

14

20

15

20

14

20

15

20

14

20

15

20

14

20

15

20

14

20

15

20

14

20

15

Licence fee

Premium pay-TVwith HD & DVR

Basic pay-TVwith HD & DVR

Basic pay-TVwith DVR

-2% -13% 1% -12% 8% 57%

48

UK premium pay-TV prices fell in 2015


UK

4

GER

3

FRA

2

ESP

5

ITA

1

USA

6


2015 rank

Comparative stand-alone ‘lowest available’ pay-TV pricing

The UK had the lowest ‘weighted average’

stand-alone prices for three baskets in 2015...

49

Summary of stand-alone ‘weighted average, basket pricing

41

45

46

49

50

82

58

74

81

86

10

4

12

6

10

3

10

2 15

5

111

15

5

18

8

14

6

16

9 2

34

22

6 27

4

30

3

18

8

18

2 22

9

21

5 26

1

28

8

0

100

200

300

400

UK

FR

A

GE

R

ITA

ES

P

US

A

UK

FR

A

GE

R

ITA

ES

P

US

A

UK

FR

A

GE

R

ITA

ES

P

US

A

UK

FR

A

GE

R

ITA

ES

P

US

A

UK

FR

A

GE

R

ITA

ES

P

US

A

TV (excl.TV licence)

Mobilebroadband

Mobilephone

Fixedbroadband

Fixedvoice

Monthly cost (£)


Basic needs Late adopter Mobile power

user

Connected

family

Sophisticated

couple

1 1 2 1 2 UK rank

50

Summary of stand-alone ‘weighted average, basket pricing

39

35

44

48

57

84

43

40

54

57

64

11

2

97

10

2

16

8

11

2 15

4

27

9

15

9

13

0 17

6

15

3 2

06

32

8

0

100

200

300

UK

FR

A

GE

R

ITA

ES

P

US

A

UK

FR

A

GE

R

ITA

ES

P

US

A

UK

FR

A

GE

R

ITA

ES

P

US

A

UK

FR

A

GE

R

ITA

ES

P

US

A

UK

FR

A

GE

R

ITA

ES

P

US

A

Monthly cost (£)


Basic needs Late adopter Mobile power

user

Connected

family

Sophisticated

couple

2 2 n/a 1 3 UK rank

...but performed less well in terms of

‘weighted average’ bundle prices

51

Summary of ‘lowest available’ basket prices

33

31

30

35

41

45

36

37

42

50

57

99

87

74

11

0

10

1 13

3

16

0

82

94

15

3

10

1

12

2

24

3

15

4

11

4 1

61

14

9 2

00

24

8

0

100

200

300

UK

FR

A

GE

R

ITA

ES

P

US

A

UK

FR

A

GE

R

ITA

ES

P

US

A

UK

FR

A

GE

R

ITA

ES

P

US

A

UK

FR

A

GE

R

ITA

ES

P

US

A

UK

FR

A

GE

R

ITA

ES

P

US

A

TV (excl.TV licence)

Mobilebroadband

Mobilephone

Fixedbroadband

Fixed voice

Bundle

Monthly cost (£)


Basic needs Late adopter Mobile power user Connected

family

Sophisticated

couple

3 1 2 1 3 UK rank

The UK had the ‘lowest available’ prices for

three baskets in 2015, as did France

52

Comparison of international household profile pricing, 2015

The UK performed worst for the highest use

households in 2015


‘Basic needs’

household

‘Late adopters’

household

‘Mobile power

user’

household

‘Connected family’

household

‘Sophisticated

couple’ household

Price

(£ per

month)

Average

stand-

alone

Average

bundled

Lowest

available

Average

stand-

alone

Average

bundled

Lowest

available

Average

stand-

alone

Lowest

available

Average

stand-

alone

Average

bundled

Lowest

available

Average

stand-

alone

Average

bundled

Lowest

available

UK 41 39 33 58 43 36 103 87 146 97 82 188 159 154

FRA 45 35 31 74 40 37 102 74 169 102 94 182 130 114

GER 46 44 30 81 54 42 155 110 234 168 153 229 176 161

ITA 49 48 35 86 57 50 111 101 226 112 101 215 153 149

ESP 50 57 41 104 64 57 155 133 274 154 122 261 206 200

US 82 84 45 126 112 99 188 160 303 279 243 288 328 248

53

The UK’s average rank was unchanged in 2015,

but France overtook it to rank top overall

Average pricing rankings, by country: 2014 and 2015


Rank Country Average rank

2014

Average rank

2015

1 ( ) France 2.0 1.5

2 ( ) UK 1.8 1.8

3 ( - ) Italy 2.9 3.3

4 ( - ) Germany 3.9 4.1

5 ( - ) Spain 4.5 4.4

6 ( - ) USA 5.9 6.0

54

Steven Cape,

Senior Analyst,

Market Intelligence

Post

Letter volumes are down 10.2% since 2010

55

44.3 45.1 45.1 44.5 43.6

30.3 29.5 28.9 28.1 27.4

166.7 164.0 155.3 153.2 150.2

68.3 65.9 62.7 59.4 57.0

309.7 304.5 292.1 285.2 278.2

0

50

100

150

200

250

300

350

2010 2011 2012 2013 2014

Europe

USA

Asia Pacific

BRIC

Source: WIK / Ofcom analysis

Billion items

Revenues more stable over this period…

56

3.5 3.8 4.1 4.4 4.7

13.3 13.2 13.0 13.1 13.5

30.9 29.9 28.7 28.4 28.9

24.8 27.9 26.9 25.7 25.1

72.6 74.8 72.7 71.6 72.1

0

20

40

60

80

2010 2011 2012 2013 2014

Europe

USA

Asia Pacific

BRIC


Note: Figures are nominal

£ billion

…helped by price increases

57

0.9

1

1.1

1.2

1.3

1.4

1.5

1.6

2011 2012 2013 2014 2015

ITA

NED

UK

RUS

FRA

SGP

SWE

AUS

BRA

ESP

USA

POL


Change in First Class equivalent stamp price since 2010

2011=1

UK the only European comparator

where letter mail revenue rose

58


Change (%)

0.4

-1.3 -1.2

-8.2

1.6 2.6 2.2

-6.8

-2.3 -4.4

-5.7

-1.6

4.3 2.9

4.7

12.7 10.5

-15

-10

-5

0

5

10

15


The proportion of parcels is growing

59

12 15

7

33

6 4

0

20

40

UK GER USA JPN NED SWE

2013 2014


Proportion of parcels in total mail (%)

60

Respondents who received a parcel in the last week (%)

69 73 72 71

65 65 71

63 69

47 53 52 51

48 51

42 47 47

0

20

40

60

80


Weekly online shoppers Not weekly online shoppers

Source: Ofcom research

Helped by online shoppers

61

Questions?

Documents

Ofcom analyst briefing...films/movies Back-catalogue films/movies Programmes/series made in own country Programmes/series made in the US* Original programmes made by the service provider