No, Not the Mobile Phone
People would prefer to give up almost anything before letting go of their mobile phones and broadband. In these recessionary times, mobile phones, television subscriptions and broadband services rank higher in many household budgets than holidays, eating out and home improvements.
That’s the finding of telecoms regulator Ofcom. In their sixth Communications Market Report (August 2009) into the £52 billion TV, radio, broadband, telecoms and mobile industries. Ofcom research discovered that when asked which items consumers were likely to cut back on in the recession:
- 47% said they would choose to cut back on going out for dinner;
- 41% said DIY;
- 41% said holidays.
This compares with:
- 19% who would cut back on mobile phone spending;
- 16% on TV subscriptions;
- 10% on their broadband services.
Perhaps unsurprisingly though, people are paying less for their communications services, even if they are using them more. Average household spend on internet services fell in real terms from £11.37 in 2007 to £10.71 in 2008. Whereas in May 2009, consumers spent an average of 25 minutes a day online at home – up from nine minutes in 2004.
Consumers are increasingly seeking out cheaper deals. The demand is more time at less cost. In the first three months of 2009, 46% of consumers are taking a bundle of services (two, or more services such as telecoms, broadband and TV) from one operator, up from 39% 12 months previously. 25% of consumers said they would be more prepared to shop around now for their mobile phone service and broadband provider than a year ago.
In terms of mobile phone contracts, longer tie-ins are also becoming increasingly popular as consumers give greater commitment in return for lower monthly fees and inclusive, or heavily discounted, handsets. In the first quarter of 2009, 13% of new mobile contracts were for a 24-month period, compared to only 2% a year previously.
Peter Phillips, Ofcom Partner, Strategy & Market Developments said: “Despite the recession, people are spending more time watching TV, using their mobile phone or accessing the internet. They would rather do without meals out or holidays than give up their phone, broadband or pay TV package.
“Meanwhile, we are becoming more canny about the way we pay for these services. Almost half of us economise by taking a bundle of communications services from a single supplier, while one fifth opt for cheaper mobile contracts which don’t include an expensive new phone.” For those that what the full facts, go to: The Communications Market 2009 (August).
Tags: Ofcom
