BT 2013 Annual Report Download - page 38

Business
36
Our customers and markets
We serve a number of different types of customers
in the UK and around the world. In this section we
explain who our customers are and the trends we
see in the markets where we operate.
UK consumers
We serve UK consumers through BT Consumer and BT Ireland (both
partsof BT Retail).
There are around 26m households in the UK and our consumer products
and services can reach almost all of them.
The market for fixed calls and lines, broadband and TV is very
competitive. There are around 114 companies offering voice and/or
broadband services. The market has concentrated over the last few
yearswith several strong players emerging. The four largest providers
are BT, Virgin Media, Sky and TalkTalk.
Fixed calls and lines
Around 22m, or 84% of homes in the UK have a fixed phone line. That
proportion has stayed steady for the past three years. Around 15% of UK
homes only have a mobile phone with around 1% having no phone at all.
There were 24.4m home phone lines in the UK as at December 2012
(including some homes which have more than one phone line and some
SMEs who buy consumer services). That is up 2% compared with last year.
An overall rise in the total number of homes in the UK – coupled with more
demand for fixed broadband connections – played a part in that growth.
At 31 March 2013 we had a total of 10.2m consumer fixed-lines in the
UK, with around 9.8m active voice lines (where a customer buys calls
from us as well as paying for the line).
We have the largest share of fixed-lines to homes in the UK at 42%,
compared with 47% last year. Our share has been declining over the
last few years as competitors have taken advantage of the favourable
regulatory regime in the UK.
Market share of UK consumer lines
BT 42%
Virgin Media 18%
Other 40%
Source: Ofcom Telecommunications Market Data Tables, December 2012
The number of minutes spent on calls from fixed-lines has been falling
for some time. Customers are increasingly using mobiles, email, social
networking and other kinds of communication instead. Our total
callvolumes declined 9% in the year, compared with an 11% decline
lastyear.
Broadband
The UK has one of the highest levels of broadband availability in Europe.
Almost all homes can get a fixed broadband connection and around
three-quarters do so.
The UK also compares favourably on broadband pricing. Ofcom research
ranks the UK the seventh cheapest out of 25 European countries for
standalone broadband and sixth cheapest out of 23 countries for
broadband and voice bundles.
At 31 March 2013 there were around 21.9m DSL, fibre and cable
broadband connections to homes and businesses in the UK, up by 5%
over last year.
Fibre penetration has grown significantly during the year. There are more
connected devices and people are using more bandwidth-intensive
applications such as watching video, streaming music and playing online
games. More than half of households now own web-connected games
consoles, over 40% of individuals connect their TV to the internet, and
15% of households own a tablet device.
According to Ofcom research, the average broadband download speed
for the UK was 12.0Mbps in November 2012. That is up from 7.6Mbps
a year earlier. Plusnet was ranked highest for average download speeds
over copper. BT Infinity offers the most consistent speeds over a
24-hour period, with the lowest network congestion at peak times, and
the fastest upload speeds in the country.
We have around 6.7m retail broadband customers (including business
customers). We are the UK’s biggest broadband provider with a 31%
share of the total broadband market at 31March 2013. Excluding cable,
we have a 38% share. As with fixed calls and lines, Sky, Virgin Media
and TalkTalk are the other big players. Mobile operator O2 left the fixed
broadband market during the year.
We now have around 1.3m retail fibre broadband customers
representing 19% of our retail broadband customer base.
BT’s retail broadband market share
20
25
30
35
40
Source: BT and market data
2009 2010 2011 2012 2013
34%
27% 28% 29% 30% 31%
35% 36% 37% 38%
Market share of broadband lines (DSL+fibre+cable)
Market share of broadband lines (DSL+fibre)
At 31 March
%
TV services
Broadcast TV is currently the most common way for people to watch
television. There are three main platforms – satellite, cable and digital
terrestrial.
But broadband is revolutionising the way people watch, especially
with interactivity and on-demand TV. The public sector broadcasters
offer free on-demand content services such as BBC iPlayer, ITVPlayer,
4oD and Demand 5. All the UK’s main pay-TV providers also offer on-
demand services. These are either free as part of a monthly subscription
for broadcast channels, covered by an extra subscription or are on a
pay-per-view basis.
There are other subscription-based providers such as Netflix and
LOVEFiLM and pay-per-view providers such as Blinkbox. These over-
the-top providers stream content over the web without owning any
ofthe distribution infrastructure.
There are 14.8m UK pay-TV subscribers, making up 54% of TV
households. The rest typically receive free digital terrestrial channels
viaFreeview orFreesat.