Take–up of communications services – Ofcom Analysis Consumer Access

This metric takes into account, the extent to which the consumers are provided with communications services in their households.

It also involves the study of demographic profiles, take-up figures over time and international comparisons. According to the study, in the UK, take-up of communications services in mobile phone and digital TV are high. Nine out of ten consumers in the UK have access to these services in their households.

Take up of fixed lines
As in all other countries, over the last five years, there has been a fall in the number of fixed lines per head of population. It is mainly due to the increased usage of mobile phones and more and more households are using mobile for their telephony needs. Ofcom’s research found that in Q2 2011, 15% of houses in the UK had no fixed-line connection but had a mobile phone connection. Five years back, it was 9%. When compared to some other countries, the decline in the UK is less. There are mainly two reasons for this change.

In the UK, 79% of fixed-line broadband connections are delivered over the copper phone line. To receive DSL service consumers are required to pay a higher telephone service charge and it automatically contributed to the growth of mobile-only households. In countries like the US, where the cable broadband has higher take-up, the fall in fixed-line connections was greater. Likewise in countries like France, Sweden, Netherlands people could buy DSL with out purchasing a telephone service (Naked DSL), a higher proportion of houses opted to give up fixed line in favour of mobile phones.

Thanks to Virgin Media, in the UK, the switch over to the mobile phone was very less as the cable operator offered a low price for broadband and fixed telephone bundles enabling the people to purchase broadband. The pricing strategy of mobile and fixed operators plays a crucial role in the switch over of consumers from fixed line to mobile phones. In Europe, BT is the only operator which does not have its own mobile network. So the threat from mobile is great to BT and it has taken some measures to reduce fixed-mobile substitution. An advance payment scheme for line rental is introduced by BT.

According to this scheme the customer has to make an annual payment. At the same time the customer could save 3.90 Pounds every month by subscribing this scheme and at the same time BT will be able to lock the customer for a period of 12 months. More over, BT also offers other schemes like Free weekend calls and three Free calling features to attract customers.

Take-up of fixed line
Now let us examine the trend in take-up of fixed-line phones and the trend of switching of consumers within the UK. It is noted that there has been a general decline in fixed-line ownership last year. The proportion of using other suppliers has been increasing while the use of BT has continued to decline. Other companies make use of LLU (local loop unbundling) to compete with BT, cable and (WLR) wholesale line rental operators for fixed-line services. Now the competition in the communications market for fixed-line is maximum.

Voice over Internet Protocol
For fixed-line voice communication, VoIP (Voice over Internet Protocol) is an alternative and in some countries VoIP is a threat to fixed voice telephony. The use of VoIP and awareness of the ability to make voice calls over the internet continued to rise in the UK. Adults in the UK had access to VoIP services at home and the level of VoIP users have almost doubled. BT Home Hub, MSN, Messenger and Skype are the main VoIP suppliers in the UK. As far as the fixed-line ownership is concerned, England (85%) stands above Northern Ireland (84%) and Scotland (80%).

With regard to the take-up of fixed-line services, socio-economic group AB is more likely to take up land line services than socio-economic groups DE. People living in the rural environment opt for fixed-line service than their counterparts in the urban areas.