The Telegraph reports that the average British household spent a total of £117.71 per month last year on broadband, phone, mobile, television, radio and postal services.
That represented a small increase of just 19p on 2013, but was the first rise since 2009, when the average inflation-adjusted spend was £122.07. Since then the industry has had to contend with the recession and wholesale price cuts imposed by regulators.
Ofcom’s data, collected as part of its annual overview of the entire communications market, showed that the upturn was not evenly shared across the sector, however.
Pay-TV spending increased, driven mainly by the growth of BT and TalkTalk’s operations. Between them they have encouraged hundreds of thousands of new households to subscribe to pay-TV with “pay lite” options that are cheaper than a Sky or Virgin Media package.
The rise in pay-TV spending excludes the rapid growth of internet-only streaming services, led by Netflix, Amazon and Sky’s Now TV. Ofcom said Netflix now has 4.4m UK subscribers, and that total online streamlining television subscriptions increased by 53 per cent last year to £317m.
Broadband was the other main source of household spending growth, with average bills up 14 per cent to £14.74 per month, not including line rental. Ofcom said higher average bills reflected higher average speeds as more households upgrade to superfast packages.
Despite a 12.6 per cent slide in the volume of traditional voice call during 2014, average landline bills were down just 34p to £22.18 per month, as operators increased line rental rates well above inflation to make up for lower usage.
A sharper downward trend continued for the mobile industry. Average household spending on mobile fell a further £1.61 to £44.37 per month. The figure has fallen by more than £6 in five years, with the pressure on the industry helping to trigger the wave of takeovers it is now attempting to negotiate, including BT’s acquisition of EE and the planned merger of Three and O2 by Hutchison Whampoa.
Analysts expect BT’s takeover, pitched as a “convergence” deal to combine fixed-line and mobile networks, and the entry of Sky into the mobile market next year to drive mobile prices down further.
In a recent note to clients, Guy Peddy of Macquarie said: “We expect a doubling of the market share from the super MVNOs [Sky and TalkTalk] in the UK over the next five years, and fear a headwind from pricing.”
An Ofcom spokesman said that because of increasing take up of superfast broadband and likely pay-TV price increases resulting from the record £5.1bn bill for Premier League rights agreed earlier this year, it expects total household spending on communications to continue to rise this year.
