Talk Talk Plc and its Service Marketing - Literature review Example

?Talk Talk Plc and its Service Marketing Table of Contents Table of Contents 2 Introduction 4 2.Macro-Analysis - PERT 4 2 Political 4 2.2 Economic 5 2.3 Social 5 2.4 Technological 6 2.5 Legal 6 2.6 Environmental 7 3.Micro-Analysis: SWOT 7 3.1 Strengths 7 3.2 Weaknesses 7 3.3 Opportunities 8 3.4 Threats 9 4. Analysis of current marketing strategies and tactics 9 4.1 ANSOFF model 9 4.2 The BCG Matrix 10 4.3 Segmentation approach and market study 11 5Extended Marketing Mix (Lovelock & Wirtz,2010) 14 5.1 Product 14 5.2 Place and Time 14 5.3 Price 15 5.4 Promotion 15 5.5 Process 16 5.6 Physical Environment 16 5.7 People 16 6Profitable Service Strategies (Lovelock & Wirtz, 2010) 17 6.1 Managing Relationships, Building Loyalty 17 6.2 Complaint Handling and Service Recovery 17 6.3 Service Quality and Productivity 18 6.4Service Leadership 18 7Conclusion 18 References 20 Bibliography 22 Appendices 24 Internet 28 Landline/mobile phones 28 Digital television 29 Digital radio 29 1. Introduction TalkTalk Plc is the UK’s third largest communications network operator and had been in business for the past 16 years. Formerly affiliated with the Carphone Warehouse (CPW), it has recently demerged and now operates independently. Together with the demerger comes the need to reassess its service marketing strategy. Initially criticized for its sacrifice of quality to pursue a low-price strategy (Iqbal, 2011), it has since then implemented a number of strategic reforms. As a result, for the year 2011, BT has been named the most improved with a jump of two points, while TalkTalk is “the only telecoms provider to show a significant decrease in satisfaction” (Institute for Customer Service, 2011). 2. Macro-Analysis - PERT 2.1 Political 2.1.1 Telecommunications firms are commonly affected by variations in political structures and party systems in the countries in which the telecommunications infrastructure is deployed (Henisz & Zelner, 2001). To protect the interests of the general public, the Government is considering whether or not it should require ISPs to block certain websites promoting illegal file sharing. 2.1.2 There is a strong lobby in favour preventing certain forms of data traffic management by ISPs, but the UK Government, the EU and Ofcom, are decided on maintaining market transparency and competition rather than resort to prescriptive regulation to protect consumers’ interests (Annual Report 2011, p. 11). 2.1.3 The UK government has made it a priority to support and fund the rollout of superfast broadband networks in rural communities. This should aid in the development of viable markets in places in the UK which were considered economically unfeasible (Annual Report 2011, p. 9). 2.2 Economic 2.2.1 The protracted recovery in the broad economy and the continued economic weakness in the European region will continue to influence the performance of UK business in general, including internet service providers (Annual Report 2011). 2.2.2 Competition is fierce such that if network services proved unreliable compared to the rival firms, this creates customer churn (turnover). The cost of switching among ISP services is low and therefore customers may easily abandon their service in favour of a rival firm (Annual Report 2011). 2.3 Social 2.3.1 Social networking continues to gain momentum among internet users, aside from the growing dependence on the internet as a source of information for work and school. In addition, the continued popularity of television as a broadcast entertainment medium presents an opportunity for the convergence of television content with ISP services (Annual Report 2011). 2.4 Technological 2.4.1 Data security and integrity is a continuing concern in the digital telecommunications industry. Loss of customer data attributable to data protection breaches may damage the firm’s reputation and cause the imposition of fines (Annual Report 2011). 2.4.2 The development in fibre optic technology has begun to push demand for fibre access, precipitating the need for wholesale product development that could fulfil this demand (Annual Report 2011) 2.5 Legal 2.5.1 The Digital Economy Act promulgated in 2010 requires Internet Service Providers to provide notice to customers whose connections have been determined to be used for illegal file sharing, and where appropriate, to have them disconnected. 2.5.2 Generally, the UK telecoms market is under the regulatory control of Ofcom, which mandates the charges for wholesale access to infrastructure and associated services which are provided by BT Openreach (Annual Report 2011). 2.6 Environmental 2.6.1 There is an impact created by the operation of electronic communication networks on the environment, particularly in the use of energy calculated by Gb of bandwidth. A Carbon Saver Standard, certified in both ISO 14064 and BS EN 16001, is one such quality standard targeted at sustainability for the industry (Carbon Saver, 2012) TalkTalk was awarded the Carbon Saver Gold Standard in 2011. 3. Micro-Analysis: SWOT 3.1 Strengths 3.1.1 The Group’s strength lies in its technologically advanced data telecommunications services. One of its innovations is TalkTalk’s Next Generation Network, or NGN, which is further discussed in the next succeeding section. The design specifications in this innovation enables the firm to deliver faster data and voice transmissions for a greater number of users at a lower cost (TalkTalk Business, 2011). 3.1.2 TalkTalk also measures up as the third largest broadband provider in the UK when reckoned according to the number of customers (Wembridge, 2011). Its market shared comes after BT (27.3%), and Virgin Media (22.3%); with TalkTalk/AOL/Tiscali accounting for 22.2% (Ofcom industry facts and figures, 2012; see Appendix C). 3.2 Weaknesses 3.2.1 In 2011, TalkTalk received notification from Ofcom of contravention of General Condition 11 under Section 94 of the Communication Act 2003. The ruling stemmed from no less than 1,000 complaints by customers that they had been issued billing statements by the Group even after these customers had already ceased to receive services from it. After a year-long investigation, several warnings and allowing for sufficient time to resolve the issues, Ofcom issued a ?3 million penalty against the Group (Iqbal, 2011; Wembridge, 2011). Aside from the Ofcom penalty, the firm agreed to pay ?2.5m as settlement to the customers affected (Iqbal, 2011). 3.2.2. The firm is also undergoing a major organisational restructuring in 2012 because of its recent demerger from the Carphone Warehouse (see Appendix B); this may cause temporary though prolonged disruptions in both frontline operations and back office functions, therefore impacting on financial performance as well as risking the loss of patronage of affected customers. (Annual Report 2011). 3.3 Opportunities 3.3.1 There is a strong demand for fibre access technology, for which the firm has contracted the services of Openreach to develop lower wholesale fibre access products which the Group can market at lower set up and provisioning costs (Annual Report, 2011, p. 20) 3.3.2 There is also the trend to incorporate television services within the broadband market. To address this opportunity, the Group has entered into a joint venture with the BBC and other television content providers. The joint venture, called YouView, is developing a television service which includes internet based catch up and video on demand services (Annual Report 2011, p. 21). 3.3.3 For the business sector, there is a strong migration of small and medium scale enterprises (SMEs) to IP-based services, together with the growth in data traffic. This provides excellent opportunities for increasing demand which could drive sales and services built on the Group’s next generation network (NGN). 3.4 Threats 3.4.1 The slow economic recovery continues to pose a threat to the Group because it may have to absorb higher costs while its prices continue to be regulated by the government and therefore could not be easily raised. 3.4.2 Other threats include the possibility of costs going up in tandem with the economic environment, but the prices being regulated by government means that they could not simply be raised without Ofcom approval, in order to offset the rise in price and maintain the profit margin (Annual Report 2011). 4. Analysis of current marketing strategies and tactics 4.1 ANSOFF model In the former strategy, the firm adopted an indiscriminate price leadership strategy, but suffered in the delivery of quality service. However, with the shift to quality delivery and increase in profit margins, the firm has distinguished its product services for the retail customer and communities, and the business sector. It is not seeking new markets; in fact, the firm is willing to take a drop-off in number of subscribers, as long as there is a shift to quality. It is therefore located in the Product Development quadrant in the Ansoff matrix shown above, combining new products with the existing market in search of better quality, more loyal customers (Donnelly, 2008). It is rewarded by higher quality assessment, lower churn, and a wider product margin, as evident in the ICS 2010 report. 4.2 The BCG Matrix http://www.web-books.com/eLibrary/Books/B0/B64/IMG/fwk-tanner-fig02_017.jpg Within the BCG matrix shown above, TalkTalk may be classified as a Question Mark which has a possibility of turning into a star. So far it ranks third behind BT and Virgin, and shares 22% market share with AOL and Tiscali (Ofcom, 2012; see Appendix C). However, the market is still growing particularly with the broadband rollout programme of the government in the rural areas. 4.3 Segmentation approach and market study From the foregoing, discussion on the market mix and service strategies, it is apparent that the firm has identified two markets, principally the B2C (Business to customers) and the B2B (Business to business) data traffic. Until recently, TalkTalk offered unlimited broadband for only ?3.25 per month, plus line rental. This is considered quite low, as it is only two-thirds of the price charged by O2, the industry leader which is renowned for great customer service. The same is true between BT and TalkTalk. BT is the largest provider in the broadband market although it is not specifically renowned for great service. However, BT still earned ?67.50 more on the average per customer per year, than TalkTalk, despite the fact that BT customers are only allowed to download 10GB of data in one month (Iqbal, 2011). The results of the market survey below will shed greater light on the demographics, behavioural and psychographic profile of the market of TalkTalk. The marketing concept states that to achieve organizational goals, the needs and wants of the target market must be determined, so that the company may better satisfy them than the competitors do (Kotler, et al., 2011, p. 16). Marketing concept requires: (1) customer orientation, (2) integrated efforts, and (3) goal achievement (Jobber, 2011, p. 5) In line with the marketing concept, the market survey in the Appendix was undertaken. Fifty respondents who are presently availing of such service were polled. Table 1 shows that the respondents are distributed across a wide age range, from 18 upwards. The age group most represented is the 18-25 age range (comprising 26 per cent of the total respondents), followed closely by those 65 years or older (24 per cent). Least represented is the 36 to 50 year age group, at 14 per cent of total respondents. Table 2 shows the frequency and percentage distribution of respondents according to gender. There are significantly more women than men respondents, with women outnumbering men by 20 percentage points. Females comprise nearly two-thirds of the sample, and males comprise slightly more than one-third. Table 3 shows the respondents’ distribution according to their identified previous and present service providers. There appears to be a transfer of respondents from BT and other providers to Virgin and TalkTalk. The number of BT users fell by 2 per cent and that of other providers by 8 per cent. On the other hand, users of Virgin rose by a significant 22 per cent, while that of TalkTalk increased by 8 per cent. An inspection of the raw data shows that there are no respondents who have the same previous and present providers, thereby indicating that all respondents have changed their providers for one reason or another. The last column of Table 3 shows the mean score provided by respondents about how they rate their satisfaction levels with their current provider. The highest score, indicating the highest relative level of satisfaction, is that of Virgin at 7.94. This is followed closely by BT with 7.00. Other networks cumulatively come in at a distant third with 4.57, and only slightly below this is TalkTalk at 4.46, the lowest of the four available mean scores. Assuming that satisfaction is an indicator of quality in the perception of the user, then Virgin is perceived to provide the highest quality service, and TalkTalk has the lowest quality service. This finding confirms the conclusions arrived at by ICS findings dated July 2011 (ICS,2011). By the end of 2011, however, the Broadband provider reviews show a much better assessment of TalkTalk. In this review, Virgin Media continued to be “highly commended,” with honourable mention going to BT for Customer Service and TalkTalk for Value for Money. (http://www.broadbandchoices.co.uk/partner-lp_broadband-reviews/broadband-reviews.html#logos). Finally, Table 4 shows the distribution of respondents according to whether or not they would recommend their present service to others. Of the four groups, the service provider whose users would recommend it most is Virgin at 26 per cent, corroborating its high satisfaction score in the preceding table. The next most highly recommended would be BT (18 per cent), followed by TalkTalk (6 per cent). As for negative responses, the provider whose users would most refuse to recommend it to others would be TalkTalk at 16 per cent of total respondents, or 62 per cent of TalkTalk respondents. Only 15 per cent of Virgin respondents would refuse to recommend their service. The firm whose respondents are most undecided as to whether or not they would recommend their service is BT, at 10 per cent of all respondents or 56 per cent of BT respondents. 5 Extended Marketing Mix (Lovelock & Wirtz,2010) 5.1 Product The NGN technology mentioned as strength in the preceding SWOT (IP) switching and dense wave-division multiplexing (DWDM) transmission, which enables voice and data capacity that is capable of simultaneously servicing millions of end users. This technology of the NGN entails lower cost than legacy networks the designs of which rely on time-division multiplexing (TDM) switches (TalkTalk,2012). 5.2 Place and Time Like all online commercial undertakings, the service provided by TalkTalk is delivered over the internet, in the virtual market. Place and time – that is, service availability – therefore depends upon the availability and accessibility of channels to allow subscribers to get online. For TalkTalk, the strategy had been to accelerate the rate of customer acquisition through use of additional channels, and through increasing the investment in marketing (Carphone Warehouse, 2003). 5.3 Price Recently, TalkTalk made a move to higher paying, quality conscious customers. The firm reported that it had raised its earnings forecast for the full year because it has had greater success in attracting more profitable customers and retaining them through a new lineup of better quality services (Wembridge & Thomas, 2012). 5.4 Promotion The firm makes use of traditional broadcast media aside from its advertising efforts through the Internet. For instance, a TV campaign was launched to promote a service product of the firm, dubbed myTalkTalk, which unbundles customer services and allows customers to pay for only what they want. Features or services which the customer does not want do not get offered or billed. Furthermore, in response to the economic crisis, the firm designed an Emergency Plan which is intended to aid customers who had been financially disadvantaged by the crisis (Ramsay, 2009). 5.5 Process The service delivered by TalkTalk is known as “local loop unbundling” which involves installing the firm’s advanced equipment in 2000 UK local telephone exchanges, thereby reaching 86% of the country’s households. This process combines the high speed, high capacity network with the the exchanges’ reach, thereby optimising broadband width and service quality for a greater number of customers (TalkTalk Business, 2012). 5.6 Physical Environment The physical environment, as part of the marketing mix, has minor significance to customers availing of the service provided over the internet. For majority, the company website would be sufficient evidence of the firm’s existence. However, visibility and physical evidence of the service is quite important (Lovelock & Wirtz, 2010). TalkTalk’s head office is located in Stanford House, Garrett Field, Birchwood, Washington. 5.7 People The firm is an equal opportunity employer, with a policy that ensures disabled persons are not discriminated against. Furthermore, the firm provides regular training to its employees, extends share-based payments to certain employees, and ensuring that employee engagement is consistently pursued. It was not always this way, it seems, with the exodus of some key personnel almost on each other’s heels. Most particularly in 2009, Talk Talk lost its two key marketing personnel in 2009 to its rival firms, which left the company no option except to hire from outside (Annual Report 2011). 6 Profitable Service Strategies (Lovelock & Wirtz, 2010) 6.1 Managing Relationships, Building Loyalty Until it recently revised its strategy, Iqbal (2011) saw TalkTalk’s approach as reactionary; that “in the informed customer’s mind there is more risk in doing business with a supplier that offers poor service,” for which reason the supplier, to keep in business, has to offer a price discount to retain some of its customers. With this as the case, however, the supplier (TalkTalk) ends up with a pool of price sensitive customers instead of service-centred customers. Because the customers are only with TalkTalk because of the low price, the firm is doomed to losing most of its customers the instant it raises its prices. There is therefore little loyalty that is built with the company, and the firm is constrained from raising its prices to meet any rise in costs. 6.2 Complaint Handling and Service Recovery Concerning the contravention of General Condition 11, TalkTalk was slow to respond to customer complaints and even summonses from Ofcom, the regulator, and only took action when it was meted out a ?3million fine – the largest fine ever imposed on a telecoms provider, although it does not approach the ?150 million (equivalent of 10% of turnover) that should have been the fine equivalent (Iqbal, 2011). Ofcom stated that it imposed the lower penalty of only ?3 million, in consideration of the fact that TalkTalk had taken significant steps towards complying with the rules, and sought to remedy the harm it caused customers (Wenbridge, 2011). Accepting culpability, the Executive team works closely with Ofcom to show it is taking the necessary actions to remedy the failure. A compliance committee has also been established under the Senior Independent Director, to monitor the level and reason for customer complaints, and make sure that their concerns are addressed by the proper action. 6.3 Service Quality and Productivity In late 2011 to early 2012, the firm embarked on a reform of its strategy, this time aiming to attract and keep customers who are looking for value for money – that is, customers who do not mind paying more as long as they are assured of quality service. This allows for a higher profit margin, which in turn allows the firm to pursue more quality innovations. Since this strategy began implementation, the firm has reported losing 43,000 customers for the third quarter of 2011, but because the firm’s number of new, consistent customers have been steadily increasing, TalkTalk upgraded its expected earnings for the yearend (Wembridge & Thomas, 2012). 6.4 Service Leadership TalkTalk’s recent strategic shift has enabled it to explore more innovative changes than merely lowering prices. With the addition of television content and faster network technologies, it is trying to develop a reputation for quality service and competitiveness to better its present 20% market share. 7 Conclusion TalkTalk is presently making a bid to gain higher quality service and thereby improve the profit margins, even at the expense of losing 43,000 or more customers who have chosen the company only on the basis of low prices. By doing so, the firm adopts a bolder strategy that accomplishes the twin purpose of (1) adjusting from weaknesses created by the recent demerger on the one hand, and (2) assuming a better position to address the increasingly competitive environment in the face of a challenging regulatory and economic environment. PESTEL shows that there are challenges as well as opportunities which face the entire industry. SWOT shows that TalkTalk is equipped with strengths in the form of technological innovations and strategic partnerships, and that its weaknesses are being remedied by adopting a revised strategic outlook and resolving its problems with service quality, customer billing problems, and lacklustre performance. TalkTalk is innovating in its service product, has the advantage of place and time, is rethinking its price strategy, and linking promotional efforts in a meaningful way to people’s economic realities. Process, physical evidence and people are seen to support the innovations being adopted in the product strategy. Finally, the firm is adopting more profitable service strategies as defined by Lovelock and Wirtz (2010) in building loyal ties based on quality, adopting greater transparency in handling complaints, and providing enhanced service quality and productivity. References Brassington, F and Pettitt, S 2006 Principles of Marketing, Prentice Hall Carbon Saver 2012 “Easy to Implement – the M5 Process.” Accessed 5 February 2012 from http://www.carbonsaver.org/certification.html Dibb, S 2006 Marketing: Concepts and Strategies, Houghton Miffin Donnelly, A 2008 “TalkTalk sets sights on customer loyalty.” Marketing (00253650), 5/28/2008, p5 Henisz, W J & Zelner, B A 2001 “ The Institutional Environment for Telecommunications Investment” Journal of Economics & Management Strategy, vol. 10, no. 1, pp. 123-147 Institute of Customer Service 2011 “Public services satisfying customers in tough times.” UK Customer Satisfaction Index (UKCSI). Accessed 5 February 2012 from http://www.instituteofcustomerservice.com/files/UKCSI_July_2011_summary.pdf Iqbal, M 2011 “What Exactly is the Cost of Poor Customer Service? TalkTalk Provides an Answer.” Business 2 Community. Accessed 5 February 2012 from http://www.business2community.com/consumer-marketing/what-exactly-is-the-cost-of-poor-customer-service-talktalk-provides-an-answer-055373 Jobber, D 2011 Principles and Practice of Marketing, 6th ed, McGraw Hill Kotler, P & Keller, K L 2011 Marketing Management, 14th edition. Prentice Hall Lovelock, C & Wirtz, J 2010 Services Marketing. Pearson Education. Ofcom 2012 “Facts and Figures” Accessed 5 February 2012 from http://media.ofcom.org.uk/facts/ Ramsay, F 2009 “TalkTalk names Olivia Streatfeild marketing director.” Marketing. Accessed 5 February 2012 from http://www.marketingmagazine.co.uk/news/884292/ TalkTalk 2012 “How does your NGN work?” TalkTalk Business. Accessed 5 February 2012 from http://www.talktalkbusiness.co.uk/help-and-resources/faqs/partners/corporate/how-does-your-ngn-work/ TalkTalk Group Investor Presentation, February 2010. Accessed from EBSCO. “TalkTalk rolls out WALL-E activity.” Marketing (00253650), 7/16/2008, p6 “TalkTalk plots mobile step-up.” Marketing (00253650), 12/7/2011, p3 “TalkTalk: The bright stage.” Campaign (UK), 8/26/2011, Issue 34, p5 The Carphone Warehouse 2003 “Embargoed until 0700 hours”. Accessed 5 February 2012 from http://pressoffice.carphonewarehouse.com/uploads/files/q203final.pdf Wembridge, M 2011 “TalkTalk fined ?3m for billing ex-clients” Telecoms. Accessed 5 February 2012 from http://www.ft.com/intl/cms/s/0/875399fa-c967-11e0-9eb8-00144feabdc0.html#axzz1lnh2mh97 Wembridge, M & Thomas, D 2012 “TalkTalk boosted by customers spending more.” Telecoms. Accessed 5 February 2012 from http://www.ft.com/intl/cms/s/0/7f8b2fa0-5169-11e1-a9d7-00144feabdc0.html#axzz1lnh2mh97 Bibliography Brassington, F and Pettitt, S 2006 Principles of Marketing, Prentice Hall Carbon Saver 2012 “Easy to Implement – the M5 Process.” Accessed 5 February 2012 from http://www.carbonsaver.org/certification.html Dibb, S 2006 Marketing: Concepts and Strategies, Houghton Miffin Donnelly, A 2008 “TalkTalk sets sights on customer loyalty.” Marketing (00253650), 5/28/2008, p5 Henisz, W J & Zelner, B A 2001 “ The Institutional Environment for Telecommunications Investment” Journal of Economics & Management Strategy, vol. 10, no. 1, pp. 123-147 Institute of Customer Service 2011 “Public services satisfying customers in tough times.” UK Customer Satisfaction Index (UKCSI). Accessed 5 February 2012 from http://www.instituteofcustomerservice.com/files/UKCSI_July_2011_summary.pdf Iqbal, M 2011 “What Exactly is the Cost of Poor Customer Service? TalkTalk Provides an Answer.” Business 2 Community. Accessed 5 February 2012 from http://www.business2community.com/consumer-marketing/what-exactly-is-the-cost-of-poor-customer-service-talktalk-provides-an-answer-055373 Jobber, D 2011 Principles and Practice of Marketing, 6th ed, McGraw Hill Kotler, P & Keller, K L 2011 Marketing Management, 14th edition. Prentice Hall Lovelock, C & Wirtz, J 2010 Services Marketing. Pearson Education. Ofcom 2012 “Facts and Figures” Accessed 5 February 2012 from http://media.ofcom.org.uk/facts/ Ramsay, F 2009 “TalkTalk names Olivia Streatfeild marketing director.” Marketing. Accessed 5 February 2012 from http://www.marketingmagazine.co.uk/news/884292/ TalkTalk 2012 “How does your NGN work?” TalkTalk Business. Accessed 5 February 2012 from http://www.talktalkbusiness.co.uk/help-and-resources/faqs/partners/corporate/how-does-your-ngn-work/ TalkTalk Group Investor Presentation, February 2010. Accessed from EBSCO. “TalkTalk rolls out WALL-E activity.” Marketing (00253650), 7/16/2008, p6 “TalkTalk plots mobile step-up.” Marketing (00253650), 12/7/2011, p3 “TalkTalk: The bright stage.” Campaign (UK), 8/26/2011, Issue 34, p5 The Carphone Warehouse 2003 “Embargoed until 0700 hours”. Accessed 5 February 2012 from http://pressoffice.carphonewarehouse.com/uploads/files/q203final.pdf Wembridge, M 2011 “TalkTalk fined ?3m for billing ex-clients” Telecoms. Accessed 5 February 2012 from http://www.ft.com/intl/cms/s/0/875399fa-c967-11e0-9eb8-00144feabdc0.html#axzz1lnh2mh97 Wembridge, M & Thomas, D 2012 “TalkTalk boosted by customers spending more.” Telecoms. Accessed 5 February 2012 from http://www.ft.com/intl/cms/s/0/7f8b2fa0-5169-11e1-a9d7-00144feabdc0.html#axzz1lnh2mh97 Appendices Appendix A: TalkTalk SWOT Table Strengths 5 million customers, as of 30/9/2010 Investing ?500 m in fibre optic network Aimed at the Value end of Broadband and Phone service bundles TalkTalk provides excellent international dialling deals that appeal to the minorities in the UK Weaknesses Reliant on BT copper network – faults with BT core network will affect the TalkTalk network Customers moving from non BT copper networks need to move to BT or the Post office for 2 months before being ported to TalkTalk Other competitors like Virgin Media, SKY and even BT offer TV services Negative image of hosting customer service call centre previously in India and South Africa has tarnished the reputation of TalkTalk Opportunities Ability to offer TV services and information services, since TalkTalk Purchased AOL and all its content As BT is upgrading their core network in the UK and TalkTalk is also laying its own investment in the UK network, it is possible to offer faster and more reliable services across fibre optics. Threats Increasing competition in the market Due to downturn in the Economy competitors are offering cheaper solutions for quality services Virgin already on fibre through most of the UK BT and anyone else using the BT network (e.g. TT) piggy back off the BK UK network which is being upgraded, meaning TalkTalk must compete on price rather than quality or extended services Appendix B: Mechanics of TalkTalk-Carphone Demerger Appendix B: BT Fibre Network Impact Appendix C: Ofcom Industry Facts and Figures, 2012 Internet Number of fixed residential broadband connections in the UK 16.8 million (Q4 2009). Proportion of adults with broadband in the UK (fixed + mobile) 75% (Q4 2010) Proportion of adults with mobile broadband in the UK 17% (Q4 2010) What is the market share of fixed broadband providers in the UK? BT 27.3%, Virgin Media 22.3%, TalkTalk/AOL/Tiscali  22.2%, BSkyB 14.7%, Orange Home 4.7%, O2 3.4% Others 5.3% (estimated figues Q3 2010) Average broadband speed in the UK 6.2 Mbit/s (Nov/Dec 2010) Proportion of adults with a social networking profile 43% (Q3 2010) Proportion of people who use their mobile handset to access the internet 32% (Q4 2010) Number of mobile broadband (Dongles/PC datacard) subscriptions 4.1 million (end 2009) Landline/mobile phones Number of residential fixed landlines in the UK 23.5 million (Q2 2010) Number of fixed landlines in the UK, including ISDN channels 33.4 million fixed lines (Q2 2010) What is the market share of fixed line providers in the UK? BT 52.1%, Virgin Media 12.7%, others 35.2%. (Q2 2010) Proportion of adults who personally own/use a mobile phone in the UK 91% (Q4 2010) Proportion of adults who live in a home that has a mobile phone but no landline phone in the  UK 15% (Q4 2010) How many PAYG mobile subscriptions in the UK ? 50% (Q3 2010) Number of text messages sent per mobile subscription per month 111 What is the market share per mobile provider in the UK? Everything Everywhere – 33.5% O2 – 26.1% Vodafone – 21.3% 3 – 6.8% Virgin Mobile – 4.4% Tesco – 3.1% Other – 4.7% (End 2010) Number of 3G mobile subscriptions in the UK 32% (end 2009) Digital television Number of UK homes with digital TV 93% (Q3 2010) Number of TVs in the UK 60m (end 2010) Number of HD TVs in the UK 24m (Q1 2010) Number of minutes of TV people aged 4+ watch each day 242 (all viewers 4+, average in 2010) Number of UK homes with Freeview on any set 73% (Q3 2010) Proportion of UK homes with Freeview on their main set 39% (Q3 2010) Digital radio Proportion of households with access to a DAB Digital Radio 34% (Q4 2010) Proportion of listener hours through a digital platform (DAB, online, DTV) 24% (Q1 2010) Number of digital radio stations 216 (end 2009) Number of local radio stations 371 (end 2009) Number of national radio stations 18 (end 2009) Appendix D: Market Survey Table 1: Distribution of respondents according to age Age Respondents Percentage 18-25 13 26.0% 26-35 9 18.0% 36-50 7 14.0% 51-65 9 18.0% 65+ 12 24.0% Sum 50 100.0% Table 2: Distribution of respondents according to gender Respondents Percentage Male 20 40.0% Female 30 60.0% Total 50 100.0% Table 3: Distribution of respondents according to service provider (past and present) and mean satisfaction score (1 – lowest, 10 – highest) Table 4: Distribution of respondents according to their answer to the question: “Would you recommend your current service to others?” Read More