Ofcom UK Communications Report

Ofcom issued a 334 page Communications Report that discusses TV, Radio, Telecommunications, and convergence. It has a lot of interesting information. Several points that stuck out were:

• For the first time since Oftel started to collect market data in 1992/93, operator-reported
  revenues from telecoms services did not increase in 2008. Total revenues were
  unchanged at £39.5bn, with increasing retail revenues being offset by falling wholesale
  revenues.
• Telecoms services accounted for 3.2% of total household expenditure in 2008, down
  from 3.4% in 2007. Telecoms spend fell by 5.2% in real terms over the year, the largest
  annual decline since spend on telecoms services began to fall in 2006.
• Nearly two-thirds (65%) of UK households had a fixed-line broadband connection in Q1
  2009, up from 58% a year previously.
• BT’s share of retail fixed voice calls to UK geographic numbers fell to under 50% for the
  first time in 2008. Increasing use of wholesale line rental (WLR) and local loop
  unbundling (LLU) services contributed to the erosion of BT’s retail share
  

We should all thank Ofcom for continuing to publish these comprehensive reports that shed light on important trends.

UK Ofcom Publishes Fiber Strategy

Ofcom, the UK telecom regulator, has published a report Delivering Super-Fast Broadband in the UK that outlines its policies for fiber deployment. Ofcom stated that it will:

• allow wholesale pricing flexibility to enable returns appropriate to the considerable risks of building new networks, but constrained by the market in the interests of customers
• ensure that any regulatory pricing allows investors the opportunity to earn a rate of return that genuinely reflects the cost of deployment and the associated level of risk
• minimise unnecessary inefficiencies in network design and build as a result of regulatory policies, while continuing to protect the consumer interest
• support the use of new, more flexible wholesale services by BT to offer super-fast services to other service providers and consumers at competitive prices
• safeguard the opportunity for further competition based on physical infrastructure, by facilitating fair opportunities for companies to synchronise their investments with BT’s deployments, should reasonable demand arise, and encouraging network design that takes future potential competition into account.

Ofcom will work with BT to resolve its concerns about generating a return from its intended investment in fiber to the home. It will be interesting to see how it maintains a balance through this process.

Ofcom Digital Britain Report

Ofcom the UK regulator has issued its Digital Britain report that discusses the importance of digital communications for a modern society. I makes the following points:

The first, crucial conclusion of the analysis we have done shows that, as
a country, we must ensure that our wired and wireless communications
and broadcasting networks can meet the demands of a modern knowledge-based
economy. Much work has already been undertaken, but over the next five
years we will need to upgrade these networks in order to maintain our
position and meet our ambitions.

This makes the need for an active and strategic approach from government indispensable if we are to close the gap. We need to plan now, identify the market failures that are standing in the way of a full roll out of digital infrastructure in the UK, and act swiftly in Government to help the market in the timely delivery of the
high-capability infrastructure we will need. This industrial activism from government will be critical to ensuring that the UK gets the most out of the digital economy.

This is an interesting analysis that applies globally. We all need to take its conclusions to heart.