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Press Release: UK Telecommunications Market Development Report

Released: April 2011

After researching the UK telecommunications market development and taking into account various other factors the following conclusions can be drawn from MBD's report:

Market Review 2006-2010:

The UK market for telecommunications is believed to have increased by a moderate 1% to £34.9 billion in 2010, reversing the downward trend evident in the previous two years. Indeed, the value of the market declined by 6% and a marginal level in 2008 and 2009 respectively, to a review period low of £34.6 billion in the latter year. This is in contrast to growth of 10% and 4% recorded in 2006 and 2007. The decline in the latter part of the review period reflects the adverse economic conditions with discretionary telecommunications expenditure (such as replacement handsets) being reduced and the increasingly competitive market. The declining trend is also partially attributable to more stringent regulation (such as restrictions on call roaming charges effective in the latter part of 2009), leading to lower margins, which also indicates the high levels of saturation in the market leading to a level of maturity. Furthermore, the development in mobile handsets has been slower in recent years to a gradual lengthening of the replacement cycle. Nonetheless, some areas of growth in terms of revenue exists, such as data packages and especially mobile internet, reflecting the increasing popularity of smart phones and the growing use of applications. The overall trend remains that mobile telephony continues to afford stronger market prospects than the fixed line sector.

Market Forecast 2011-2015:

The UK telecommunications market is expected to record growth throughout the five year forecast period, albeit at moderate levels. Indeed, in 2011, total revenue is projected to increase by 2% to £35.6 billion (at 2010 prices), followed by slightly stronger annual growth levels of between 3% and 4% in the following four years. In 2015, the value of the market is forecast to reach £40.7 billion (at 2010 prices), equivalent to cumulative growth of 17% in real terms compared with 2010. Furthermore, mobile phone and broadband uptake, along with technological advancements are believed to facilitate growth during the forecast period. The market is expected to be particularly driven by the popularity of smart phones, mobile broadband services, and increased demand for data services and mobile applications.

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