This year's Communications Market Report 2009, from the UK telecoms and media regulator Ofcom, confirms to the wider world what we in the industry already knew all to well - that the growth of the sector ground to a halt completely in late 2008 and has not yet recovered. Martyn Warwick reports.
Despite the remarkable success of the iPhone and subsequent upswing in the popularity of other smartphones, the UK mobile market is supersaturated (the penetration rate is now slightly in excess of 130 per cent) and so the relative growth of one operator comes at the direct and quantifiable cost - in terms of ARPU, sales, margins and churning subscribers - of others.
The British mobile market is one of the most competitive and cut-throat in the world and as every man, woman, child and dog now seems to have at least one mobile device each, the operators are having either to do everything they can to tempt their customers to use their handsets and premium applications and services more and more (via bundled service packages etc) or get involved in an unending price war that, in end will make them all losers as already thin margins are top -sliced again and again.
Over on the fixed-line side of the fence much store and corporate hope is placed in the continuing roll-out of broadband networks and services. However, and despite the government's much-vaunted "Broadband Britain" initiative, access to decent high-speed Internet access is still the privilege of town and city dwellers whilst many of our rural communities (sometimes, indeed far too often, sited no more than 10 miles of so from a major conurbation) remain all but cut-off from the digital world by pitifully slow speeds - or even have no access at all. In an island as small and heavily-populated as Britain this is, quite simply, a disgrace.
Some cable companies continue to deploy fibre, but they are never going to dig up the whole of the country - it would be economically unviable as well as geographically impossible.
So that leaves good old BT, the UK's big and still powerful incumbent fixed line operator, and it's few, and frankly rather feeble, would-be competitors.
BT says it is on target with the deployment of its all-IP 21st Century Next Generation Network although ther hype machine that churned out so much PR bumph only a couple of years ago seems to have been in idle mode for some time now. The silence is deafening.
There's also evidence that the economic crisis is preventing some Britons from signing-up to the digital world, while others who could afford more a couple of years ago are either cutting back on services packages, or, in some cases, are not renewing their contracts because they can't afford it.
In the new report, that covers the year to 31 August 2009, Ofcom says that the "availability of key communications services remained largely unchanged in 2008". In other words, the market stagnated with the exception of local loop unbundling - which grew by a modest four per cent. Ofcom has been recording communications technology services statistics since 1992, and 2008 was the first time in that 16-year period when revenues from telecoms services did not show an annual increase.
Overall, sectoral revenues increased by a miserable 0.2 per cent to £51.8 billion, but even that tiny improvement had nothing to do with telephony. It came from increased subscriptions to satellite and cable TV.
The report also shows that household spend on all comms services fell in 2008 to a national average of £93.69 per month. almost five per cent down on 2007, even though 46 per cent of British households now buy their comms services in bundles. Of that figure, 46 per cent take fixed line and broadband packages, whilst 34 per cent take triple-play fixed line, broadband and digital TV packages.
However, it's not all doom and gloom - at least if you believe the prognostications of a representative of one of the most distrusted and reviled sectors de nous jours - an investment bank!
Evolution Securities says that consolidation in the mobile sector (exemplified by the proposed merger of Orange and T-Mobile) is to be welcomed and that with the UK market reduced by one big player, margins might eventually be improved. Hmm.
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