UK cheaper and faster for mobile says Ofcom

Dec 13, 2013

I write 'most importantly' because of the propaganda machine, which is attempting to tilt the European playing field in favour of the sort of consolidation apparent in the U.S. The UK numbers should give any sane person pause for thought.

According to Ofcom, then, compared to French, German, Italian, Spanish and US consumers, the UK has consistently cheaper access to mobile phone, landline telephone and broadband deals.

Ofcom claims the biggest savings are for mobile phone deals, which are significantly cheaper than in other major European countries– and almost three times less than what US consumers pay. According to Ofcom, a typical handset with 200 minutes, 50 texts and 200MB of data costs on average £14 per month in the UK. In the US, this would cost £57 – four times as much.

Source: Ofcom

That’s mobile - what about other services? Ofcom modeled five typical household profiles to get an overall take on communications costs (TV, broadband, phone and mobile). Low use household with basic needs through to affluent household which consumes everything, each with two adults and two teenage children. It then matched the best deals available in each country to each of the profiles. The UK emerged as either the cheapest or second cheapest in four out of five of the profiles.

Clearly the UK has the most affordable communications services for a typical household, with the best deals representing just 2.3 per cent of total living costs. The best deals available in France, Italy and the US represented 2.5 per cent of consumers’ outgoings in these countries. The least affordable country was Germany, where the best deals cost consumers 3.4 per cent of their outgoings – nearly 50 per cent more than UK consumers.

So why is this ranking important? Big telco dominance in the US has (so far, this might be slowly changing) seen the US become one of the highest priced mobile markets in the developed world, but it’s being put forward as a model to emulate (understandably) in Europe by the big telcos and their representative bodies, such as ETNO, on the basis that such a regime necessarily promotes investment when competitive regimes don’t. This, of course, is nonsense.

Meanwhile in Europe, mobile is not so much patchy or ‘fragmented’ as the digital agenda commissioner would have it, as completely bifurcated.

In other words there are two distinct Europes. One is comprised of reasonably competitive (even in the most competitive markets there is still some way to go) national markets in mobile, almost always involving a ‘challenger’ mobile operator, according to Finnish consultancy Rewheel. The second Europe is where the market has been settled down into (usually) no more than three players all of whom ‘understand’ that there will no more new entries by challenger players. These markets are, in every sense, protected and high-priced.

Mash the two Europes together, collect average performances and you can manipulate cause and effect to your heart’s content, which is what has been happening to convince part of the European Commission to pursue the consolidation stragegy. But take the other progressive markets as the template we might want to aim at, as the EU competition commissioner would favour, and we find that these ‘progressive’ unprotected markets (such as the UK) are not just giving their users a better deal, they’re creating a healthier, more engaged environment for the broader Internet and telecoms ecosystem.

Lower-priced services lead to greater consumption, while consolidation without lots of safeguards would simply create more protected, uncompetitive national markets.

Rewheel has produced a ‘debunking’ document which exposes all this in greater detail. It’s free to download here.

Email Newsletters

Sign up to receive TelecomTV's top news and videos, plus exclusive subscriber-only content direct to your inbox.