Operators’ revenue declines while data use surges

Operators’ revenue declines while data use surges
Mobile operator revenues have declined by 3.5% to £14.9bn over the past year, according to Ofcom’s communications market report 2010.

The report, which examines the UK’s communication market, has found that despite the revenue decline, mobile usage continues to increase.

Consumers’ data use has increased significantly over the last year – by an estimated 68% - with data volume over mobile networks increasing by 240%. However, revenue has not grown at the same rate.

The growth in data use is reflected in the number of people using smartphones, Ofcom said. In March 2010, 28% of UK adults with a mobile phone reported they had visited at least one website on their phone that month.

Meanwhile, 26.5% of UK mobile users claimed to have a smartphone in May 2010 –more than double the number two years ago.

The trend is set to continue, the regulator said. It reported that in June 2010, 73.5% of hansdets sold on contract were smartphones.

Ofcom’s report has also found that iPhone and Android owners are the heaviest users of mobile internet, with over four million iPhones sold since 2007.

The communications report also found that more than half of mobile internet users are under the age of 35.

The report confirms the trend of contracts getting longer, as around 80% of all contracts sold in Q2 2010 were 24 month contracts.

Despite the push from operators for consumers to take longer contracts, there also appeared to be a resurgence in 12 month contracts. One year contracts accounted for 7% of new contracts in Q2 2010 compared to 4% in the previous quarter. The report attributed part of the 12 month contract growth to competitive Sim-only deals and operators, such as Tesco Mobile, offering alternative shorter contracts.

However, the trend towards longer term contracts has not deterred consumers from postpay contracts. In 2009, 41% of mobile connections were contract connections. During the year, contract subscriptions increased by 3.1 million.
Written by Mobile Today
Mobile Today

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