Despite a twenty-fold increase in data traffic, and increased growth in voice minutes, overall mobile service revenues dropped in the UK between 2008 and 2009, according to Ofcom’s report into the UK telecommunications market.
Ofcom reported that mobile retail revenues were £14.9 billion in 2008, which is below both the 2009 and 2008 total revenues of £15.9 billion and £15 billion. This is the first time Ofcom has recorded a drop in retail revenues since it began collecting data in the 1990s.
This overall decrease was despite a sharp increase in active 3G connections from 30.3 million to 41.8 million, an increase in call minutes to 111 billion to 118 billion minutes, and a 2000% increase in data volumes since the end of 2007.
Revenue from mobile line rental and voice services fell overall by £0.7 billion in 2009 to £10.4billion. Ofcom said that this decrease has been compensated by revenues from voice charges outside bundled offerings, but this year that number has also taken a hit and fell at a faster rate (7.4%) than those from bundled services.
Ofcom said that nearly a third of all connections were using 3G by the end of 2009, with 8 million being added through the year.
The below chart shows Ofcom’s tracking of data volumes and revenues over a two year period. It should be noted however that the revenue figures only include metered or add-on fees, and not a data allocation of a monthly tariff.
Mobile now driving overall broadband growth
Ofcom’s results also showed that mobile broadband take-up through dongles is beginning to decline, having reached a peak penetration of 15% in Q3 2009. That said, mobile is now responsible for growth in uptake of household broadband. With fixed broadband leveling off at 65%, Ofcom now believes that the growth in overall broadband uptake is being driven by mobile.
However, Ofcom also reported that most people think that mobile broadband is more expensive than fixed, and that customer satisfaction is lower with moblile broadband than with fixed. According to YouGov, satisfaction with broadband users “staying connected” has shown the biggest drop in any network-related attribute with 20% of mobile broadband users rating their experience as “poor” in 2009.