UK telco market posts flat revenues according to Ofcom study

By:
James Pearce
Published on:

Fixed networks continued to dominate data usage, while revenues have declined by almost £500 million in the last five years, UK regulator found

Fixed networks continue to dominate data transfer in the UK telecoms market, where revenues overall remained flat, according to regulator Ofcom.

While average mobile data use per connection is increasing, reaching 1.3GB per month in June 2016 (up from 0.9GB in June 2015), it is significantly lower than the 132GB per month average recorded over residential fixed broadband connections, Ofcom’s market report claims.

Revenues generated in the UK telecoms market during 2016 hit £35.6 billion, up slightly on the previous year. But overall, revenue has fallen from £39.7 billion during the last five years, with much of that fall coming from the wholesale market.

The UK wholesale market generated revenues of £6 billion, down by £500 million on 2015, and down from £9.6 billion in 2011.

"Total UK communications revenues generated by telecoms, TV, radio and postal services increased in 2016, rising by £0.19 billion (0.4%) in real terms (i.e. adjusted for inflation) to £54.9 billion," said the Ofcom Communications Market Report.

"This overall increase was due in part to a rise in total telecoms revenue, which increased by £0.2 billion (0.4%) in real terms to £35.6 billion, mainly due to a 4.3% increase in retail fixed revenue during the year and was partially offset by declining wholesale service revenues. There was also a rise in the revenue generated by the broadcast UK television industry, up by 1.0% in real terms to £13.8 billion in 2016, driven by a 2.8% increase in pay-TV subscription revenues."

Ofcom - Communications industry revenue - telecoms-tv-radio-post

Ofcom found that the average household spend on telecoms services increased by 0.9% in real terms to £85.26 per month, the majority of which was taken up by mobile voice and data (£45.60 on average).

The number of households with fixed broadband also grew by three percentage points to 82%, while the number of mobile internet users remained flat at 66%. Smartphone take-up grew by 5% to 76%. The continued migration to superfast fixed broadband services resulted in a 9.9% real-terms increase in fixed internet revenues in 2016, to £5.7 billion. Overall, the number of fibre users grew by 21%.