UK consumers are some of the earliest adopters of new communications technologies, new Ofcom research reveals.

We are among the best connected for broadband, mobile and digital TV and the UK has seen the fastest growth in smartphone take-up.

We prefer laptops to desktop PCs, watch more internet TV than anyone else and spend more money shopping online than any of our European neighbours.

At the same time we’re also enjoying lower prices for our communications services than many consumers across the world.

All these facts and more are revealed in Ofcom’s fifth International Communications Market report

Download the Full Report:ICMR_2010

This annual report looks at take-up, availability and use of broadband, landlines, mobiles, TV and radio in the UK and 16 other countries.

Italy has the highest take-up of smartphones with 26 subscribers for every 100 people, followed by Spain (21) and the UK (18).

But the UK saw the highest growth in smartphone take-up in the past year with a 70 per cent rise in subscriber numbers between January 2009 and January 2010.

Germany has the highest landline take-up with 85 per cent of the population having a landline (84 per cent in the UK), while Italy has the highest mobile take-up with 95 per cent of the population owning a mobile phone (91 per cent in the UK).

The UK is second biggest text messaging nation in Europe after Ireland, with 140 messages per person per month (218 per person per month in Ireland).
People in the UK are using their mobile phones for social networking more than in other countries.

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Smartphones, mobiles and social networks

• The UK saw the highest growth in smartphone take-up in the past year (up 70 per cent) although Italy has the highest take-up of smartphones.
• People in the UK are using their mobile phones for social networking more than in other countries
• Younger people in the UK are more likely to visit social networking sites on their mobiles than in other countries, with 45 per cent of 18-24s and 38 per cent of 25-34s saying that they did this.
• The number of social networkers is also higher in the UK than other comparator countries among 18-24s and 55-64s.
• Eighty-six per cent of 18-24s in the UK say they use the internet for social networking, compared to 77 per cent in France and 48 per cent in Japan.

Overall, Italy has the highest percentage of adults who use the internet for social networking at 63.4 per cent, closely followed by the UK and USA at 63.2 per cent.
Mobile messaging also continues to grow across the globe with Australia having the highest average use at 254 text and picture messages per person per month.
The UK is second biggest text messaging nation in Europe after Ireland, with 140 messages per person per month (218 per person per month in Ireland).

Mobile revenue growth no longer offsets decline in fixed-line revenues
The most prominent structural change affecting telecoms revenues is ongoing fixed to mobile substitution. As the average cost of mobile services falls, consumers use of mobile services increases, and a growing number of consumers cease to have a fixed-line phone at home. The chart below indicates that in aggregate the number of fixed-line voice connections and fixed-line voice volumes fell in 2009 in our comparator countries.

A second structural change is that mobile and fixed broadband take-up is slowing, particularly in the non-BRIC countries. Previously, strong growth in mobile and fixed broadband services had been more than sufficient to offset falling fixed voice revenues, but as take-up of mobile and fixed broadband services increases, growth in the number of connections (and revenues) slows. This is particularly the case outside the BRIC countries, where mobile connections and voice volumes increased by less than 4% in 2009 as markets approached saturation.

A third factor is that increases in revenues from mobile are not keeping pace with increases in take-up and use. Across all 17 countries, mobile connections increased by 16.3% and call volumes increased by 14.7% in 2009, but revenues increased by just 2.7%. Overall, mobile accounted for 58% of total telecoms revenues in the 17 countries in 2009 (up from 49% in 2004), but it is not driving growth to the same extent as previously, with total mobile revenues having increased by an average annual growth rate of 8% between 2004 and 2008. This is likely to be due to markets becoming saturated, and operators focusing increasingly on retention rather than acquisition; for example, in the UK 24-month mobile contracts now account for the majority of new pay-monthly contracts, while SIM-only contracts, offering a relatively large number of inclusive minutes within the monthly fee, are becoming increasingly popular.

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Mobile data revenues growing faster than those from fixed broadband
The chart below shows fixed broadband and mobile data revenues from 2004 to 2009 in the 13 comparator countries for which fixed broadband revenue data were available. This shows that mobile data revenues (£73bn) continued to be higher than those from fixed data services (£61bn) in 2009. Over the five-year period an interesting pattern emerges. Prior to 2006, rapid growth in the take-up of fixed broadband services led to revenues from fixed broadband services growing faster than those from mobile data services, and in 2006 the revenues from each service were equal at £42bn.
However, in 2007 fixed broadband revenue growth declined significantly (to 18% from 27% in 2006) as a result of declining average broadband prices and a slowdown in connection growth, while total mobile data revenue growth increased, mainly due to growing use of non-SMS services. While mobile data service revenue growth has since started to slow, it remains higher than fixed broadband revenue growth, and the gap between revenues from fixed and mobile data services has continued to increase.

Fixed-line voice comparatively resilient in UK, as mobile grows in all markets
The number of fixed-line connections fell between 2004 and 2009 in the countries in which we carried out our consumer research, although the fall in the UK (-5 percentage points) was much lower than in other countries. However, fixed-line take-up remains higher in Germany (58 lines per 100 people) than in the UK (54 lines per 100 people). Take-up of fixed-line voice is lowest in France (reflecting the use of VoIP) and in Italy, at 37 per 100 people (reflecting a high proportion of mobile-only households)

In contrast to its relatively low take-up of fixed-line voice, Italy leads in the number of mobile connections, with 152 connections per 100 people, reflecting high levels of multiple pre-pay SIM card use. Other countries where the number of mobile connections exceeds the population are Germany (132 connections per 100 people) and the UK (129 per 100 people).

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