Communications Revenue Shrinks as Convergence Expands in UK

Increased convergence of communications services and technologies in the UK is changing the shape of the communications sector, in particular industry revenues - for TV, radio, and telecommunications and broadband - according to the 2007 edition of Ofcom's annual "Communications Market Report," writes MarketingCharts. Among the myriad findings of the Ofcom report: * By April 2007, 53 percent of UK households had a broadband connection. Headline broadband speeds - the maximum advertised speed of a service - have doubled over the last 12 months. * The average blended headline broadband speed stood at 3.6Mbit/s at the end of 2006 compared with 1.6Mbit/s in the previous year. By June 2007 this had risen to 4.6Mbit/s. * The increase in headline speeds is due in part to continued investment and growth in local loop unbundling, which enables operators to install their own equipment in BT's exchanges and offer broadband services direct to consumers. * Competition in the provision of phone services is also increasing. While BT is diversifying its revenue streams in other areas, its share of fixed voice call volumes fell below 50 percent for the first time in 2006 (48 percent) and its share of all telecoms connections (including mobile) fell below one in four (23 percent, down from 26 percent a year ago). * Increased competition is driving down prices for consumers. Ofcom's analysis of the cost of a typical basket of residential telecoms services (including a fixed line, two mobiles and a broadband connection per household, all at 2006 usage levels) shows that consumers would have paid £6.51 (9 percent) more for the same bundle of services in 2005 than in 2006. In the five years to 2006 the cost saving on the same bundle was £34.97 in real terms.

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