April 30, 2007

EU E-Communications Household Survey

The EC has released last Friday the (EU) E-Communications Household Survey 2006[1], covering, inter alia, fixed and mobile telephony, directory and enquiry services, television, bundled offers and the European emergency number.

I. The following findings of the survey can be underlined:

A. Fixed and Mobile Telephony

a) 95% of households have access to a telephone (the survey notices the positive evolution registered in Poland and Portugal) and, in average, 58% have both fixed and mobile telephones, albeit more households are giving up their fixed line;

b) For the households that keep their fixed line, the main reason seems to be the internet connection, whilst the sufficiency of a mobile phone (32%) and the high prices of line rental (25%), calls (18%) and installation (10%) are mentioned as strong reasons in the case of households that do not have a fixed line;

c) Mobile penetration is 21% (while the “mobile-only penetration” is significantly higher in the new Member States) and the main reasons mentioned in cases where a household does not have a mobile phone have to do with the fact that no none, in the household, actually wants a mobile phone (41%), the sufficiency of a fixed line (26%), the excessive price (18%) or the existence of good access to phones elsewhere, when outside the home (5%);

d) Only 12% of respondents indicated that their household members used public payphones;

e) 75% of the respondents use, at least sometimes, traditional paper phone directories, whilst 54% sometimes call to a service number to get contact details (notwithstanding, 43% never call to these services);

B. Internet

a) 54% of households have a computer and the broadband penetration rose up significantly, reaching by now 28% (the overall internet penetration is 42%);

b) ADSL is the predominant access technology and the use of dial-up standard lines has decreased by 9 percentage points vis-à-vis 2005;

c) 28% of households with internet access suffered significant problems (including a breakdown in 27% of the cases) caused by spam, viruses and spy ware;

C. Television

97% of the households have a television and aerials (45%) remain the main means of reception, followed by cable (35%) and satellite (21%);

D. Bundles

20% of Europeans admittedly purchase one or more of the services as part of a bundle (the most common being combinations of fixed telephony and internet access) and most are satisfied, either because there is only one invoice (60%) or find it cheaper than paying separately for each service (44%).

E. European Emergency Number

On average, 40% of Europeans are aware that 112 is the number to call anywhere in the EU in the case of an emergency while half of the population is unaware.

II. Some questions


At the light of these findings, I believe the following questions may deserve some reflection:

a) What are the practical implications of the accrued visibility of fixed-mobile substitution in terms of market definition and market power assessment?

b) What type of regulatory rules does the proliferation of bundled offers (mostly between voice telephony and internet access) and the recognition that perceived high rental line prices may be leading to lower levels of fixed penetration – with repercussions on internet penetration – advise, in particular in terms of conciliating objectives of broadband deployment and promotion of competition?

c) Since bundled offers tend to make more difficult for end users to compare product characteristics and prices, adding up transaction costs, is there a need for specific measures to safeguard, in this context, consumer interests? If so, at what concrete level?

d) Does the evident correlation between PC penetration and internet penetration suggest that public entities deepen articulated measures that may even surpass the electronic communications market in order to promote PC penetration and computer literacy?[2]

e) What implications, if any, should be drawn from the scarce use of public payphones and of the more frequent use of paper directories in the framework of the forthcoming Universal Service Green Book?

f) What measures should be taken to promote awareness of the European Emergency Number? and why did not the measures taken so far produce better results?

[1]http://ec.europa.eu/information_society/policy/ecomm/doc/info_centre/studies_ext_consult/ecomm_household_study/eb07_finalreport_v3.pdf

[2] In relation to the intervention of public authorities, the joint OFCOM/DTI document published in the UK, in February 2007, "Public Broadband Schemes – A Best Practice Guide" http://www.ofcom.org.uk/media/mofaq/telecoms/pbs/dti_pbs.pdf, offers an interesting insight, as well as the CMT publication, of January 2005, "La Actividad de las AAPP en el sector de las telecomunicaciones - Catalogo de las Buenas Prácticas" http://www.cmt.es/cmt/centro_info/publicaciones/index.htm.