Bundled Communications Services - UK - March 2020

OVERVIEW
What you need to know
Products covered in this Report
EXECUTIVE SUMMARY
The market
Bundled communications market valued at £20.2 billion
Figure 1: Operator revenue from communication services, 2014-24
Consumers increasingly reliant on data
Importance of landline decreases
5G gaining momentum but cost and coverage are barriers
Companies and brands
BT retains grip of broadband market
Virgin Media brings 1GBps internet speeds to consumers
BT starts Halo plan with a focus on customer service
Virgin Media adds Amazon Prime Video to TV platform
The consumer
Consumers continue to be less dependent on landlines
Figure 2: Ownership of a landline service, November 2017-December 2019
Over six in 10 broadband subscribers have fibre speeds
Figure 3: Type of broadband owned, November 2017-December 2019
Netflix and Amazon Prime Video subscriptions rise
Figure 4: Netflix/Amazon Prime video subscriptions, January 2019-December 2019
Almost 40% of TV subscribers use providers’ apps
Figure 5: Usage of a TV provider’s mobile app, December 2019
Virgin Media customers most likely to have quadplay
Figure 6: Buying a quadplay bundle previously or in the future, December 2019
Customer service experience the key differentiator after price and product quality
Figure 7: Most important factors when considering a bundle provider, December 2019
Data allowance key in using 5G to replace home broadband
Figure 8: Interest in using 5G as a replacement for home broadband, December 2019
What we think
ISSUES AND INSIGHTS
Offering mid-contract incentives to engage and keep quadplay customers
The facts
The implications
Unlimited streaming as part of 5G is likely to promote pay-TV providers’ apps
The facts
The implications
THE MARKET – WHAT YOU NEED TO KNOW
Bundled communications market valued at £20.2 billion
Consumers increasingly reliant on data
Importance of landline decreases
5G gaining momentum but cost and coverage are barriers
MARKET SIZE AND FORECAST
Bundled communications market valued at £20.2 billion
Figure 9: Operator revenue from communication services, 2014-24
Figure 10: Operator revenue from communications services, 2014-24
Figure 11: Fixed telecoms and TV subscription revenues, 2014-19
MARKET DRIVERS
Consumers increasingly reliant on data
Figure 12: Number of fixed broadband connections, 2013-18
Figure 13: Average speed of home broadband, 2013-18
Figure 14: Average home broadband data consumption per month, 2013-18
Importance of landline decreases
Figure 15: Minutes using landline service per year, 2013-18
5G gaining momentum but cost and coverage are barriers
Fixed Mobile Convergence gaining prominence
Bundle providers agree to compensation scheme to improve customer service
Bundled communications providers respond to coronavirus
BT insists that broadband performance will maintain
Virgin Media checks client-facing staff for flu symptoms
Sky offers new movies at same time as cinemas
Impact on consumers
COMPANIES AND BRANDS – WHAT YOU NEED TO KNOW
BT retains grip of broadband market
Virgin Media brings 1GBps internet speeds to consumers
BT starts Halo plan with a focus on customer service
BT also partners with Google to offer exclusive Stadia gaming package
Virgin Media adds Amazon Prime Video to TV platform
MARKET SHARE
BT retains grip of broadband market
Marginal drop across TV platforms
Figure 16: Fixed Broadband market share, 2013-18
Figure 17: UK household TV platforms Q4 2019
LAUNCH ACTIVITY AND INNOVATION
Virgin Media brings 1GBps internet speeds to consumers
Sky offers new Ultrafast broadband
BT starts Halo plan with a focus on customer service
Virgin Media adds Amazon Prime Video to TV platform
BT also partners with Google to offer exclusive Stadia gaming package
BRAND RESEARCH
Brand map
Figure 18: Attitudes towards and usage of selected brands, January 2020
Key brand metrics
Figure 19: Key metrics for selected brands, January 2020
Brand attitudes: Sky and Virgin Media viewed as most innovative bundle providers
Figure 20: Attitudes, by brand, January 2020
Brand personality: Sky and BT are the most accessible providers
Figure 21: Brand personality – macro image, January 2020
TalkTalk seen as least expensive but lacking in product quality
Figure 22: Brand personality – micro image, January 2020
Brand analysis
Consumers rank Sky as the best provider
Figure 23: User profile of Sky, January 2020
Internet-driven younger consumers most likely to use Virgin Media
Figure 24: User profile of Virgin Media, January 2020
BT favoured by older consumers
Figure 25: User profile of BT, January 2020
TalkTalk is the least favoured but also seen as least expensive
Figure 26: User profile of TalkTalk, January 2020
THE CONSUMER – WHAT YOU NEED TO KNOW
Consumers continue to be less dependent on landlines
Nearly all of landline owners bundle with broadband
Over six in 10 broadband subscribers have fibre speeds
Netflix and Amazon Prime Video subscriptions rise
Growth potential for Ultra HD with a third of BT, Sky and Virgin Media subscribers watching
Almost 40% of TV subscribers use providers’ apps
Virgin Media customers most likely to have quadplay
Customer service experience the key differentiator after price and product quality
Data allowance key in using 5G to replace home broadband
USE OF BUNDLED PROVIDERS
Sky edges ahead of bundle competitors
Figure 27: Market share for bundled communications providers, November 2017-December 2019
COMMUNICATION BUNDLES IN THE HOME 
Consumers continue to be less dependent on landlines
Figure 28: Ownership of a landline service, November 2017-December 2019
Figure 29: Frequency of usage for landline, December 2019
Nearly all of landline owners bundle with broadband
Figure 30: Bundles including a landline service, December 2019
Figure 31: Cost of broadband and landline compared to broadband-only, December 2019
TV and internet continues as most popular non-landline bundle
Figure 32: Bundles excluding a landline service, January 2019-December 2019
BROADBAND SPEEDS
Over six in 10 broadband subscribers have fibre
Figure 33: Type of broadband owned, November 2017-December 2019
SUBSCRIPTIONS TO STREAMING SERVICES
Netflix and Amazon Prime Video subscriptions rise
Premier League coverage spearheads Amazon’s live TV push
Figure 34: Netflix/Amazon Prime Video subscriptions, January 2019-December 2019
Figure 35: Netflix/Amazon Prime Video subscriptions, by generation, December 2019
Consumers prefer to pay for streaming services separately
Figure 36: Paying for streaming service as part of or separate from bundled TV subscription, December 2019
WATCHING AND STREAMING CONTENT FROM TV SUBSCRIPTION
Growth potential for Ultra HD with a third of BT, Sky and Virgin Media subscribers watching
Higher resolution display is the biggest motivator to buy a new TV
Figure 37: Behaviours around watching live or on-demand TV content, December 2019
Almost 40% of TV subscribers use providers’ apps
Figure 38: Usage of a TV provider’s mobile app, December 2019
QUADPLAY BUNDLES
Virgin Media customers most likely to have quadplay
Fixed mobile convergence to improve quadplay bundles
Figure 39: Subscriptions to a quadplay bundle, December 2019
Figure 40: Simplicity of quadplay bundles and intent to switch provider, December 2019
Four in 10 consumers without quadplay would be open to signing up
Mid-contract incentives could convince consumers to sign up and stay with quadplay
Figure 41: Buying a quadplay bundle previously or in the future, December 2019
Figure 42: Consideration for subscribing to quadplay in the future, December 2019
Figure 43: Reasons against subscribing to quadplay, December 2019
MOTIVATIONAL FACTORS TO SWITCH BUNDLE PROVIDER
Customer service experience the key differentiator after price and product quality
Figure 44: Most important factors when considering a bundle provider, December 2019
Figure 45: Most important factors when considering a bundle provider, by generation, December 2019
5G AS A HOME BROADBAND REPLACEMENT
Data allowance key in using 5G to replace home broadband
Figure 46: Interest in using 5G as a replacement for home broadband, December 2019
APPENDIX – DATA SOURCES, ABBREVIATIONS AND SUPPORTING INFORMATION
Abbreviations
Consumer research methodology