UK leading internationally as digitally advanced nation

UK consumers are embracing new digital TV services, such as high definition TV and digital video recorders, alongside many other leading economies across the world, new Ofcom research reveals.

These services give UK consumers a much greater choice of TV channels with sharper pictures and the ability to record, store, pause and fast-forward programmes.

Ofcom’s third International Communications Market Report into the £876 billion global communications market also looks at takeup, availability and use of broadband, landlines and mobiles, TV and radio in 12 established industrial economies and in four fast growing economies: Brazil, Russia, India and China.

Covering 2007, the report finds that UK consumers are getting a good deal for their money when buying communications services compared with people in other countries.

Of the larger countries surveyed, the UK has more households with digital TV on their main set, at 86%, up 9% on the previous year as switchover gets underway here.

This compares with the US where 70% of households have a digital TV, up 15% over the past 12 months. France was next at 66% of households with digital TV, and it had the highest growth during the period, an increase of 25%.

Consumers across the seven main countries we surveyed are also making more sophisticated choices. High definition (HD) services were relatively new in 2006 but now takeup of HD subscriptions has been huge, especially in the UK, US and Canada. Takeup doubled during 2007 to around 9 million subscribers across the seven larger countries surveyed.

Although the US has the highest number of households with HD subscriptions at 6 million (6.2%), the number of HD households in Canada is nearly 2 million, representing 17.6% of households. The UK leads Europe with 700,000 HD households (6%), higher than the combined number of HD households in France, Germany and Italy (500,000).

More households are choosing to pause, record, store and fast-forward TV programmes with a Digital Video Recorder (DVR). Ofcom’s report shows that the UK leads the way with 30% of people saying they own a DVR. The recorders are also popular in Italy (21%), Canada and the US (20%) and least popular in Japan (7%). Across the seven largest countries, around 28 million pay-TV homes had a DVR in 2007, up from 14 million on the previous year.

According to price comparison research commissioned for the report, consumers in the UK continue to get a good deal when buying communications services. There are two reasons for this. Firstly, competitive markets are driving prices down and, secondly, consumers are shopping around for good deals through bundling – taking multiple services from single communications providers.

Mobile broadband became much more popular with an estimated 60 million subscribers worldwide who were able to access the service via a dongle or a mobile phone by the end of October 2008. In the UK, monthly mobile dongle sales reached 163,000 in July 2008. The total number of dongles in use in Sweden increased from 92,000 to 376,000 during 2007. Mobile social networking has also started to take off – 800,000 mobile subscribers in the UK and 4 million in the US access social networking sites using their mobile devices.

The takeup of these new services is having an impact on traditional industry revenues as consumer behaviour changes. With the growing popularity of pay television services, and the rising takeup of DVRs, advertising revenues no longer account for the main source of commercial TV funding. Advertising accounted for 49% (£81 billion) down from 50% on last year, while subscription revenues were at 43% (£71 billion), up by 2% on the year.

Increasingly people are relying on their mobile phone as their main device to make telephone calls. Italy has the highest number of mobile-only households at nearly 40%. Around a third of all households in Poland are mobile-only followed by a quarter of all Spanish households and a fifth of all homes in the Republic of Ireland.

Japan has the highest number of 3G phones with 83% of mobile users in the country having a 3G connection in 2007, up over 50% since 2004 when only 13% had 3G services. Italy is second with 27%, followed by the Republic of Ireland at 26%, with the UK at 17%. Canada has the lowest takeup of 3G mobiles at just 1% of connections.

The research is one in a series of reports into the communications markets whose findings help Ofcom understand better the markets it regulates for the benefit of citizens and consumers.

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