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Bundled Communications Services - UK - March 2017

OVERVIEW
What you need to know
Products covered in this report
EXECUTIVE SUMMARY
The market
Further growth for communications market
Figure 1: Operator revenue from sale of communications* services, 2011-21
The number of superfast broadband connections increases
BT ordered to split from Openreach
Volume of fixed calls falls further
Streaming services offer challenge to pay-TV
Key players
BT remains biggest payer in broadband market
Figure 2: Retail fixed residential broadband market shares, 2011-15
Sky becomes quad-play
Sky TV to become available without a dish
Virgin improves TV service
TalkTalk relaunches pay-as-you-go streaming service
The consumer
Nine in ten get internet with their landline
Figure 3: Landline bundles, December 2016
TV and internet is the most popular non-landline bundle
Figure 4: Bundles without a landline, December 2016
Almost half of bundled internet connections are superfast
Figure 5: Type of internet connection, December 2016
Big four account for 78% of bundle owners
Figure 6: Bundle providers, December 2016
Friends and family are the most influential promotional source
Figure 7: Factors influencing choice of bundle, December 2016
Hardware options and upgrades are enticing
Figure 8: Factors encouraging the purchase of mobile inclusive bundles, December 2016
More flexible TV contracts may be the way forward
Figure 9: Attitudes towards Bundled Services, December 2016
What we think
ISSUES AND INSIGHTS
Encouraging the purchase of mobile-inclusive bundles
The facts
The implications
Extra features and exclusive content are key to holding off the streaming threat
The facts
The implications
THE MARKET – WHAT YOU NEED TO KNOW
Further growth for communications market
The number of superfast broadband connections increases
BT ordered to split from Openreach
5G could offer future challenge to fixed broadband
Volume of fixed calls falls further
Streaming services offer challenge to pay-TV
MARKET SIZE AND FORECAST
Further growth for communications market
The impact of Brexit
Figure 10: Operator revenue from sale of communications* services, 2011-21
Figure 11: Operator revenue from sale of communications* services, 2011-21
Forecasts
Figure 12: Forecast value of operator revenue from sale of internet services, 2011-21
Figure 13: Forecast value of operator revenue from sale of pay-TV services, 2011-21
Figure 14: Forecast value of operator revenue from sale of fixed voice services, 2011-21
Forecast methodology
MARKET DRIVERS
Mobile device ownership grows further
Figure 15: Household ownership of select digital devices, September 2015 and 2016
The number of superfast broadband connections increases
Figure 16: Superfast (≥30Mbps) fixed broadband connections, 2011-15
BT ordered to split from Openreach
5G could offer future challenge to fixed broadband
The connected home will increase demand for internet
Volume of fixed calls falls further
Figure 17: Outgoing fixed and mobile voice call volumes, 2011-15
Streaming services offer challenge to pay-TV
Figure 18: Streaming services viewed, December 2016
KEY PLAYERS – WHAT YOU NEED TO KNOW
BT remains biggest payer in broadband market
Sky becomes quad-play
Other providers look to improve their quad-play offerings
Sky TV to become available without a dish
Virgin improves TV service
TalkTalk relaunches pay-as-you-go streaming service
MARKET SHARE
BT remains biggest payer in broadband market
Figure 19: Retail fixed residential broadband market shares, 2011-15
Sky dominates TV market
Figure 20: Volume of UK TV subscribers, by provider, Q4 2015
LAUNCH ACTIVITY AND INNOVATION
Sky becomes quad-play
Other providers look to improve their quad-play offerings
Sky TV to become available without a dish
Now TV launches UK’s first contract-free triple-play bundle
Virgin improves TV service
TalkTalk relaunches pay-as-you-go streaming service
BT looks to eliminate dead spots
BRAND RESEARCH
Brand map
Figure 21: Attitudes towards and usage of selected brands, February 2017
Key brand metrics
Figure 22: Key metrics for selected brands, February 2017
Brand attitudes: Sky is viewed as the most innovative brand
Figure 23: Attitudes, by brand, February 2017
Brand personality: Sky and Virgin stand apart with upbeat brand images
Figure 24: Brand personality – Macro image, February 2017
TalkTalk is battling negative associations
Figure 25: Brand personality – Micro image, February 2017
Brand analysis
Virgin Media’s vibrant brand image attracts younger consumers
Figure 26: User profile of Virgin Media, February 2017
Sky has the most positive brand image
Figure 27: User profile of Sky, February 2017
BT’s traditional image has drawbacks
Figure 28: User profile of BT, February 2017
TalkTalk does not inspire trust
Figure 29: User profile of TalkTalk, February 2017
THE CONSUMER – WHAT YOU NEED TO KNOW
Nine in ten still locked into landlines
Almost half of bundled internet connections are superfast
Many remain resistant to the idea of including mobile
Hardware options and upgrades are enticing
Friends and family are the most influential promotional source
More flexible TV contracts may be the way forward
Content remains key for pay-TV services
OWNERSHIP OF BUNDLED SERVICES
Nine in ten still locked into landlines
Figure 30: Landline ownership, December 2016
Nine in ten get internet with their landline
Figure 31: Landline bundles, December 2016
TV and internet is the most popular non-landline bundle
Figure 32: Bundles without a landline, December 2016
TYPE OF INTERNET CONNECTION 
Almost half of bundled internet connections are superfast
Figure 33: Type of internet connection, December 2016
BUNDLE PROVIDERS 
Big four account for 78% of bundle owners
Figure 34: Bundle providers, December 2016
Two out of three people were already with their provider when purchasing their bundle
Figure 35: Staying with a provider, December 2016
FACTORS INFLUENCING CHOICE OF BUNDLE 
Friends and family are the most influential promotional source
Sky has the most effective TV adverts
Figure 36: Factors influencing choice of bundle, December 2016
Younger people are easier to influence
Figure 37: Repertoire of factors which influence choice of bundle, by age, December 2016
ENCOURAGING PURCHASE OF MOBILE INCLUSIVE BUNDLES 
Many remain resistant to the idea of including mobile
Hardware options and upgrades are enticing
Figure 38: Factors encouraging the purchase of mobile inclusive bundles, December 2016
Better deals for data-hungry users
Figure 39: Would be most encouraged to include mobile by getting more data for their money, by age, December 2016
Free add-on services
ATTITUDES TOWARDS BUNDLED SERVICES
Many are frustrated by having to purchase a landline
Figure 40: Attitudes towards bundled services, December 2016
More flexible TV contracts may be the way forward
Content remains key for pay-TV services
Extra features appeal to younger people and families
Figure 41: Attitude towards statement ‘Extra features within a pay-TV service are worth paying more for’, by age, December 2016
Figure 42: Attitude towards statement ‘Extra features within a pay-TV service are worth paying more for’, by presence of own children, December 2016
APPENDIX – DATA SOURCES, ABBREVIATIONS AND SUPPORTING INFORMATION
Abbreviations
Consumer research methodology
APPENDIX – MARKET SIZE AND FORECAST
Forecast Methodology
Forecasts
Figure 43: Forecast value of operator revenue from sale of communications services*, 2011-21
Figure 44: Forecast value of operator revenue from sale of pay-TV services, 2010-21
Figure 45: Forecast value of operator revenue from sale of internet services, 2011-21
Figure 46: Forecast value of operator revenue from sale of fixed voice services, 2011-21

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