The Communications Review Consumer ‘themes’ Chris Taylor Director of Consumer Policy 4 July 2012
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The Communications ReviewConsumer ‘themes’
Chris Taylor
Director of Consumer Policy4 July 2012
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Contents
1 Relevant trends and developments
2 What might we expect in the future, how it could affect consumers and questions for the regulatory framework
3
1. Relevant trends and developments
A growing number of consumers are placing increasing demands on communications services
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Video footage
5
Fewer people own fixed lines but they benefit from greater competition
Household phone ownership Household use of providers
Change between 2006-2011
Fixed voice
2006 2011 2006 2011
Figure 28 and 9 in the Consumer Experience Research Report
6
Connection methods/home ownership
Change between 2006-2011
Use of internet
75
61
Internet Consumers changing the way they access the internet
20062006
2011 2011
Figure 40 and 46 in the Consumer Experience Research Report
7
80
Length of new contract connections
Smartphones driving shift towards longer mobile contracts
Mobile
2006 2011 2006 2011
38% mobile customers own a smartphone
Figure 15, 19, 20, and 21 in the Consumer Experience Research Report
8
Fixed voice Mobile Fixed bb Pay TV
Current purchasing behaviour
Over half purchase now bundle services together with fixed voice most popular
Bundling
2006 2011
Figure 64 and 68 in the Consumer Experience Research Report
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Consumers are getting more for less
27.97 26.13 24.76 23.48 22.52 22.27
37.20 36.63 36.26 34.87 33.02 31.34
10.39 11.01 9.91 10.22 10.38 9.48
28.24 27.75 27.85 27.28 27.95 27.97
2.69 2.70 2.72 2.57 2.54 2.54
£106.50 £104.22 £101.49 £98.41 £96.42 £93.61
4.78% 4.77% 4.74% 4.66% 4.63% 4.66%
0%
2%
4%
6%
0
50
100
150
2005 2006 2007 2008 2009 2010
As % of total spend
£ per month (2010 prices)
Total Radio
Television Fixed internet
Mobile services As a %age of total household spend
but spending less Consumers are making more use of services
Average monthly spend on communications services is decreasing
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2. What might we expect in the future, how it could affect consumers and questions for the regulatory framework
Possible future developments 1
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Increased industry focus on retention of ‘high end’ customers
Development Implication for Consumers and Citizens
Regulatory questions
More bundles and tie-ins
Targeted customer retention and price discrimination in favour of engaged consumers
Impact on competition?
Future proof framework for switching, removal of asymmetries and equivalent treatment of bundle components
Need for good consumer information
More innovation and new services, including ‘over-the-top’
Increased choice and diversity of services
Regulated and unregulated services interchangeable
New capabilities for social media, commerce, entertainment etc
Dis-engaged consumers get left behind…….falling volumes and rising prices on legacy platforms
Jurisdictional questions on protection of UK consumers
Asymmetry of regulation
Privacy and data protection issues
Data porting
The ‘open Internet’
Platform migration and de-commissioning
Protection of vulnerable consumers
Possible future developments 2
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Government, healthcare and education portals online become main channels for delivery of services. Likewise, the Internet the predominant platform for commerce and retail.
Development Implication for Consumers and Citizens
Regulatory questions
Digital participation becomes essential Re-setting of definition of ‘essential service’ and universal service
Stronger need to drive digital participation
Current asymmetry of inclusion requirements between fixed voice and other services is probably not future proof
New electronic payment methods Convenience of transactions, more choice of payment methods
Establishing the right regulatory boundaries, transparency and joined up consumer protection for electronic payments (‘micropayments’)
We know………
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…..that markets in the future will work better if consumers are empowered and protected, and society will be better off if no citizens are excluded from the benefits of electronic communications technologies and services.
Thank you
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