FICORA MARKET REVIEW 8/2012. Broadband connections in households. The take-up of high-speed internet connections

Transcription

1 FICORA MARKET REVIEW 8/2012 Broadband connections in households The take-up of high-speed internet connections

2 Viestintävirasto 2012 Enquiries: When quoting information, FICORA must be mentioned as the source. FICORA MARKET REVIEW 8/ Broadband connections in households 2

3 Table of Contents Introduction... 4 Take-up of internet connections... 5 Take-up of high-speed internet connections... 6 Use of high-speed internet connections FICORA MARKET REVIEW 8/ Broadband connections in households 3

4 Introduction The take-up of next generation connection technologies speed up internet connections and enable new services, but not many users have yet found the benefits of the growing data transfer speeds. Although the availability of high-speed internet connections is rather broad, many users are satisfied with a slower connection and thereby more modest services. Many factors impact the use of highspeed internet connections. Communications networks built on new technologies form the foundation for the use of high-speed internet connections. However, the existence of networks alone is not sufficient for the introduction of high-speed broadband connections. In order to take full advantage of the data transfer speeds enabled by new network technologies, new services are also needed. And, these services must also wake the interest of consumers. Consumers' demand for services will increase as connections and services are developed and the new access possibilities are being brought out successfully. As always, when new technologies and services emerge, the most difficult point is to get started. It appears that this point has been reached in Finland. There are indications that high-speed internet connections and the services based on them have established their position in the markets, and that the demand for high-speed internet connections will speed up in the years to come. This market review takes a detailed look into how many consumers have an opportunity for the take-up of a highspeed internet access in case they so wish. The review ends with a comparison of households with a high-speed internet connection, and compares user habits with such households who do not have such a connection yet. The information presented in the review is mainly based on operator-reported market information and data material of the Use of Communications Services 2012 commissioned by FICORA. The key results of the survey on usage are also presented in the survey report, which is available on FICORA's website. FICORA MARKET REVIEW 8/ Broadband connections in households 4

5 Take-up of internet connections The take-up of internet connections has remained nearly the same over the past three years. In the fall of 2012, about 87% of Finns had an internet connection at home. The largest increase was among users who have a fixed network broadband subscription and mobile network data transfer subscription. In 2012, 21% of household users had a fixed network broadband subscription and a mobile data transfer subscription compared to 10% in The number of users who only had a mobile data transfer subscription has grown from 20% to 26%. Respectively, 38% of the users only had a fixed network broadband subscription. Three years ago, the share of these users was about 52% % 21 % 26 % % 19 % 24 % % 10 % 20 % 0 % 20 % 40 % 60 % 80 % 100 % Fixed broadband Mobile broadband Fixed and mobile broadband Other internet connection or cannot say Figure 1. Take-up of fixed and mobile broadband connections in The take-up of internet connection among age groups has stabilized. Those under 34 years of age had an internet connection almost without exception. In practise, the take-up of internet connections can only grow among those over 34 years of age. Among 35 to 44- year-olds, the take-up of internet connections has remained at the same level as in %. Among 55 to 64- year-olds, the take-up of internet connections has decreased by 3 percentage points. Part of this falls within the margin of error. Instead, the take-up of internet connections among over 64- year-olds has increased from 52% in 2010 to 61%. FICORA MARKET REVIEW 8/ Broadband connections in households 5

6 Age group % 30 % 26 % % 24 % 28 % % 26 % 24 % % 25 % 25 % % 15 % 30 % % 7 % 23 % 0 % 20 % 40 % 60 % 80 % 100 % Fixed broadband Mobile broadband Fixed and mobile broadband Other internet connection or cannot say Figure 2. Take-up of fixed and mobile broadband connections by age group in the autumn of Take-up of high-speed internet connections In this review, a high-speed internet connection refers to a broadband connection with a connection speed of at least 25 Mbit/s. The main reason for selecting this boundary is that the implementation of a broadband connection with a connection speed of at least 25 Mbit/s requires new sort of technology, which is called as Next Generation Access or NGA technology for short. More and more households have access to NGA technology and thus to highspeed broadband connection. According to the Broadband Coverage in Europe in 2011 survey commissioned by the European Commission, it is estimated that in 2011, 1.7 million households or about 68% can have a broadband connection based on next generation broadband technology. These 1.7 million households are mainly situated in cities and other large population centres. A relatively small number of users have access to NGA technology, which gives them access to high-speed internet connection, although the supply of subscriptions is much broader. According to operator-reported information, there were 460,000 broadband subscriptions using next generation broadband technology in Finland in June The figure includes both household and business customers. FICORA MARKET REVIEW 8/ Broadband connections in households 6

7 Approximately 74% of the subscriptions were used by households. In relation to all broadband subscriptions, about 30% of all broadband subscriptions used NGA technology. Compared to the end of 2011, the number of subscriptions using NGA technology had grown by about 60,000 subscriptions Real estate subscription Ethernet Cable modem Docsis Phone network VDSL Optical f ibre FTTH/O/B Figure 3. Broadband subscriptions using NGA technologies in households and businesses 30 June More than half of the users whose broadband subscription used highspeed NGA technology were happy with a slow internet connection. A total of 195,000 households and business users, who already had a broadband connection using NGA technology, had acquired a broadband connection with a connection speed of at least 25 Mbit/s. In addition to them, 265,000 household and business users would have an opportunity to acquire, quite easily, a broadband connection with a connection speed of at least 25 Mbit/s. The potential for the take-up of highspeed broadband connections is thus high. In all, about 12% of broadband connections have a connection speed of at least 25 Mbit/s. If all users with a NGA subscription started using a broadband connection of at least 25 Mbit/s, the share of high-speed broadband connections of all broadband connections would rise to as much as about 28%. FICORA MARKET REVIEW 8/ Broadband connections in households 7

8 Year Moment Less than 10 Mbit/s less than 25Mbit/s less than 100Mbit/s Mbit/s or more Table 1. Fixed network broadband subscriptions in households and businesses by speed category. High-speed broadband connections are used by all age groups, but much more frequently by the younger ones. About 26% of 15 to 44-year-olds using broadband had a high-speed broadband connection, whereas the corresponding figure for over 65-year-olds was about 7%. It is noteworthy that a large share of users irrespective of their age does not know the data transfer speed of their connection. Age group % 20 % 40 % 60 % 80 % 100 % less than 8 Mbit/s 8- less than 24 Mbit/s 24- less than 100 Mbit/s 100 Mbit/s or more Cannot say Figure 4. Data transfer speeds of internet connections in households by age groups in the autumn of Although, if all users had access to the internet connection they thought they needed, the data transfer speeds would not grow significantly. About 71% of household users experience they need a broadband connection with a connection speed of at least 8 Mbit/s, and 66% of users already have access to such a connection. Respectively, 32% of household users want access to a broadband connection with a connection speed of at least 25 Mbit/s, and about 25% have such a connection already. On the basis of the availability of NGA subscriptions, the majority of households would have an opportunity for the take-up of a high-speed broadband connection. So far, rather few think that they need a high-speed internet connection. FICORA MARKET REVIEW 8/ Broadband connections in households 8

9 Current speed 15 % 20 % 40 % 14 % 11 % Desired speed 11 % 18 % 39 % 19 % 13 % 0 % 20 % 40 % 60 % 80 % 100 % Less than 2 Mbit/s 2 - less than 8 Mbit/s 8 - less than 24 Mbit/s 24 - less than 100 Mbit/s 100 Mbit/s or more Figure 5. Households' current connection speed and the one they aspire to have in the autumn of About 7% of household users want to have access to a high-speed broadband connection, but they have not acquired one. Such a connection would be available for most of these users. Highspeed broadband connections are not always provided in the market or users are not aware of the provision of such connections. The availability of a high-speed broadband connection is mainly dependent on the place of residence. About 21% of city dwellers wanting a high-speed broadband connection could not get hold of such a connection or were not aware of these. Those living in population centres accounted for 35% and the share of those living in sparsely populated areas was 57%. 100 % 90 % 80 % 70 % 60 % 50 % 40 % 30 % 20 % 10 % 0 % City Population centre Not availabe or cannot say Sparsely populated area High-speed connenctions available Figure 6. The availability of a broadband connection of over 24 Mbit/s in the autumn of 2012 (respondents had a slow connection, but wanted a fast one) FICORA MARKET REVIEW 8/ Broadband connections in households 9

10 Use of high-speed internet connections A high-speed broadband connection in itself offers no additional value to consumers. Additional value is achieved by the range and quality of services a high-speed broadband connection provides to users as opposed to slower broadband connections. More versatile usage is typical for users of high-speed internet connections than slower ones. The greatest differences in the ways of using the internet are seen in services where the benefits of a high-speed broadband connection and the even quality of the data transfer speed come up. Consumers, who had acquired a high-speed broadband connection, use the connection much more often for online downloads, remote work, listening to music, playing computer and console games as well as watching videos and television. A deep look into the habits of video and TV watching reveal that about 32% of those using a high-speed broadband connection watch television channels via an IPTV service. Respectively, the corresponding share of those using a slower connection was 20 percentage points lower. In other words, only 8% of them use the IPTV. Also, online video rental was more popular among the users who had access to a high-speed broadband connection. About 24% of them rented videos whereas the corresponding share of those using a slower broadband connection was only 9%. Online downloading or cloud services Remote work or studying Loading big files Playing games Listening to music Watching videos and television Communication eservices Search for information 0 % 20 % 40 % 60 % 80 % 100 % 24 Mbit/s or more Less than 24 Mbit/s Figure 7. Impact of data transfer speed on the services used via broadband connection in the autumn of FICORA MARKET REVIEW 8/ Broadband connections in households 10

11 Household users with a high-speed broadband connection also use internet pay services more frequently and are also more willing to pay for them. About 52% of those using a high-speed broadband connection either pay or are willing to pay for internet services while the corresponding figure for consumers using slower connections was about 20 percentage points lower. Less than 24 Mbit/s 11 % 22 % 67 % 24 Mbit/s or more 26 % 26 % 48 % 0 % 20 % 40 % 60 % 80 % 100 % Pays already for an internet service Could pay or har thought about paying Would not pay Figure 8. Preparedness to use online pay services in the autumn of FICORA MARKET REVIEW 8/ Broadband connections in households 11

12 Contact information P.O. Box 313 Itämerenkatu 3A Helsinki tel fax