Ofcom report: UK consumers switching away from fixed to mobile

A report published by the UK telecoms watchdog Ofcom concludes that not only do nearly nine in ten UK households possess at least one mobile phone, but a growing number of users are opting for wireless as their primary form of communication. According to the regulator, 20 million cellphone users are using their mobile handset over their landline phone at least once a week, highlighting a rising trend of fixed-to-mobile substitution in the market. Around 26% of all voice calls made in the first quarter of 2004 were from a mobile phone, helping drive revenue growth in the broader telecoms sector. UK mobile users spent in excess of GBP10.7 billion in 2003, a year-on-year rise of 16.3%, boosting total revenues by 10% to GBP34.3 billion. Moreover, minutes of usage for mobiles has exploded since 1999, from less than ten minutes a week to an average of 27 minutes last year; SMS texting has grown 15-fold to 15 messages a week.

With mobile usage on the increase, the traditional fixed line market has begun to feel the pinch. Total fixed line call and access revenues dipped by 3.6% in 2003, with BT bearing the brunt of the downturn. The incumbent’s predicament has been further exacerbated by a rising tide of newer players eating into its market share. On a more positive note, turnover derived from internet access services grew by 12.4% to GBP2.2 billion, while around 50,000 people are reported to be signing up to broadband every week. Ofcom predicts that the five million broadband subscriber milestone will be passed in mid-September 2004.