Telco services as recession buster: Ofcom reveals

Communication services are proving to be recession proof, in the UK market at least, according to the latest research from British regulator Ofcom.

Ofcom's sixth Communications Market Reportreveals that British consumption of communications services remains a high priority in consumer budgets.

Consumers were more likely to cut back on dining out (47%) and holidays (41%), over cutting back on mobile phone use (19%), TV subscriptions (16%) or broadband services (10%).

Overall communications consumption is also up. In May UK consumers spent an average of 25 minutes a day online at home, up from 9 minutes in 2004. At the end of Q1, 68% UK homes had a broadband connection, up from 58% the previous year.

Nearly half or those surveyed, 46%, were purchasing bundled services during the first quarter of 2009, up from 39% the year before.

There were more than a quarter of a million new mobile broadband connections in May alone, up from 139,000 new connections in May 2008.

VoIP use is also on the rise with 21% of internet users having a VoIP service in 2008, compared with 14% in 2007.

Ofcom partner for strategy and market developments Peter Phillips said, “despite the recession, people are spending more time watching TV, using their mobile phone or accessing the internet.

“Meanwhile, we are becoming more canny about the way we pay for these services. Almost half of us economize by taking a bundle of communications services from a single supplier, while one-fifth opt for cheaper mobile contracts which don't include an expensive new phone.”

Mobile use is hitting record highs with 77 million mobile subscriptions, up three million on the year. This translates to nearly 30 million mobile phone contracts.

While a higher proportion of consumers are taking out longer 24-month mobile contracts in return for lower monthly fees and heavily subsidized handsets, the survey showed.

Twelve-month contracts, which accounted for 88% of postpaid mobile phone sales back in 2005, accounted for just 3% in the first quarter of 2009. But overall pay as you go connections were down by 100,000 to just under 47 million.

Over 80 billion texts sent last year - an average of 100 texts per person, per month, Ofcom said.