Ten years is a short period in which to expect dramatic change in consumer behaviour or adoption of new technologies. Not so with e-communications. The last decade has seen a seismic shift in our use of the internet: mobile phones now offer access to social networks, music and entertainment, and messaging has grown exponentially. The momentum continues. As 4G (LTE) continues its roll-out across Europe, it is bringing fixed line broadband speeds to Europe’s smartphones that will make possible live video streaming, m-banking, m-retail and NFC applications. It will be transformational. Apps and internet access are also giving impetus to new ways of keeping in touch through a smartphone via social network sites, which avoids call charges. The EU has an ambitious agenda for the internet; making fast (30Mbps+) broadband available to all and to see superfast broadband (100Mbps+) in 50% of homes by 2020. There are barriers to overcome. Internet subscribers are mostly happy with what they have and are reluctant to pay more. However, history suggests that sooner or later we will want to trade up to faster internet speeds. Not everyone is at the frontier of change. One household in three stills lacks internet access, they are more likely to be older, rural and living in Eastern or Southern Europe. However, internet access is on a growth trajectory and countries with low connection rates are catching up.

1. E-communications
in the EU

2. Eurobarometer research – the research was
conducted by TNS Opinion & Social across
the 27 EU member states in December
2011. 26,693 face-to-face at home
interviews were conducted.
2 E-communications in the EU

3. Introduction
Ten years is a short period in which to expect broadband (100Mbps+) in 50% of homes
dramatic change in consumer behaviour or by 2020. There are barriers to overcome.
adoption of new technologies. Not so with Internet subscribers are mostly happy with
e-communications. The last decade has seen what they have and are reluctant to pay
a seismic shift in our use of the internet: more. However, history suggests that sooner
mobile phones now offer access to social or later we will want to trade up to faster
networks, music and entertainment, and internet speeds.
messaging has grown exponentially.
Not everyone is at the frontier of change.
The momentum continues. As 4G (LTE) One household in three stills lacks internet
continues its roll-out across Europe, it is access, they are more likely to be older, rural
bringing fixed line broadband speeds to and living in Eastern or Southern Europe.
Europe’s smartphones that will make possible However, internet access is on a growth
live video streaming, m-banking, m-retail and trajectory and countries with low connection
NFC applications. It will be transformational. rates are catching up.
Apps and internet access are also giving
impetus to new ways of keeping in touch
through a smartphone via social network
sites, which avoids call charges.
The EU has an ambitious agenda for the
internet; making fast (30Mbps+) broadband
available to all and to see superfast
@
© 2012 TNS 3

4. Wired-up and connected
For some years now, Europe has had near- However the big jumps in connectivity are in
universal access to TV and phone services, broadband internet access and smartphone
and the trend is strongly upwards for other ownership. Narrowband is fading into
products. In the last five years, mobile phone history. Most countries are under the EU
penetration has risen by 8 points to 89% and average of 5%. Germany is the notable
computer ownership by 14 points to 68%. exception, with 13% of homes connected
to narrowband.
Europe is wired-up
Household penetration % 97 98
89
68
56
35
28
(5 years
5 Negligible
5 years
ago)
ago
Narrowband Internet via Broadband Computer Mobile TV Any phone
smartphone
@
Source: Eurobarometer, E-communications Household Survey June 2012, conducted by TNS Opinion and Social
Base: 27 EU countries.
4 E-communications in the EU

5. The big divide
Penetration of computers and broadband are having an internet connection down to just
closely aligned. However, there are significant 25% of over-60s, and even less for the
demographic and country differences over-75s.*
between haves and have-nots.
There is also a north-south divide: internet
Age differences are most pronounced, with penetration is strong in Northern Europe and
a gradient that runs from 77% of under-30s weak in Eastern and Southern Europe.
Household internet connections %
71-93%
61-70%
42-60%
*Based on an analysis of single-person households.
Source: Eurobarometer, E-communications Household Survey June 2012, conducted by TNS Opinion and Social.
Base: 27 EU countries.
© 2012 TNS 5

6. Internet access is increasing
Internet access is increasing, but at
a fractionally slower rate % 64
57 56
48
49
36
40
Any 23
internet
Broadband
internet
Dec 2005 Nov – Dec Nov – Dec Dec 2011
– Jan 2006 2007 2009
Growth in internet ownership may be
2011 versus 2009: Any internet
slowing, but the modest base (64%) and average
the fact that there was a 7% point increase percentage
points
across most of Europe between 2009
increase
and 2011 suggests there is a way to go
Netherlands, Luxembourg 4
yet. Strong gains in Eastern Europe have
and Scandinavia
narrowed the gap between high and low
(70%+ ownership 2009)
ownership countries. Even in countries
Greece, Italy, Spain 4
where internet ownership already exceeded
Rest of EU 8
70%, it grew by an average 4 percentage
points. Low growth in Greece, Italy and
Spain may be a result of economic problems.
Source: Eurobarometer, E-communications Household
Source: Eurobarometer, E-communications Household Survey June 2012, conducted by TNS Opinion and Social
Survey June 2012, conducted by TNS Opinion and Social Base: 27 EU countries / Averages weighted by country
Base: 27 EU countries. population.
6 E-communications in the EU

7. Lack of interest a barrier
For the 36% of EU citizens with no internet reason was ‘do not know exactly what the
access, the most common reason given internet is’, scoring 7% at the EU level but a
is ‘lack of interest’ (63%). Cost is a poor surprisingly high 22% in Spain.
second at 18%. The next most mentioned
Have access
Local area is not
elsewhere and
covered by broadband
that is sufficient
Plan to subscribe in
the next 6 months
You and members 5 1
of your household
5
do not know exactly
what the internet is 7
18
Cost
63
No one in household
is interested in the
internet
Source: Eurobarometer, E-communications Household Survey June 2012, conducted by TNS Opinion and Social
Base: 27 EU countries / Households without internet access.
© 2012 TNS 7

8. Ambition for broadband
The EU has an ambitious goal for broadband: person in seven is prepared to pay more for
‘By 2020, all Europeans should have access a faster internet and only 1% are prepared
to internet of above 30Mbps and 50% to pay an extra 33% or more.
or more of European households have
But this is a snapshot in time. We are
subscriptions above 100Mbps.’*
happy to pay for apps and for content. As
The EU sees this as powering a digital our appetite for films on demand, HD and
economy and enabling all its citizens to multiple application usage increases, and
participate. our tolerance of buffering decreases, then
recent history suggests that we will judge
Citizens, however, are resistant to paying
a faster connection worth paying for.
more. Research suggests that only one
Readiness to pay more for higher
speed and capacity %
4
Prepared to pay up
to 15% more
Not prepared to 11
Prepared to pay
pay more 82
16-33% more
2
Don’t know 1 Prepared to pay more
than 33% more
*Source: A Digital Agenda for Europe 2010
Source: Eurobarometer, E-communications Household Survey June 2012, conducted by TNS Opinion and Social
Base: 27 EU countries / Respondents with internet access at home.
8 E-communications in the EU

9. Cost, not speed
Concern over cost is reflected in the fact download speed comes a very poor second.
that price is the priority when it comes Lack of awareness is an issue. When asked,
to an internet subscription. Given the 58% did not know what their maximum
importance of download speed to the quality download speed was and a further 6% gave
of the internet service, it is surprising that an incorrect answer.
Internet subscription considerations mentioned %
45
13 12
7
5 4 4
Subscription Maximum Fact that the Customer Installation Maximum Cost of
price download internet is part service cost amount you terminal
speed of a bundle offered can download equipment
Source: Eurobarometer, E-communications Household Survey June 2012, conducted by TNS Opinion and Social
Base: 27 EU countries / respondents with internet access at home.
© 2012 TNS 9

10. Reasons to pay more
Most people do not have difficulty accessing which needs a fast connection and high
online content due to limited speed but a capacity. This colours the perspective on
significant minority, 42%, do and it is mostly price as a factor limiting demand for a faster
this group that is prepared to pay more for service; it may be that people who see no
a faster internet service. Mostly they want reason to pay more get everything they need
to upload content and watch video and TV, from their existing service.
Reasons to pay more for an internet connection with higher speed
or download capacity %
Upload or share content 39
Watch videos 32
Watch live events 28
Watch TV 27
Listen to music 26
Play online games 21
Make VoIP calls 17
Source: Eurobarometer, E-communications Household Survey June 2012, conducted by TNS Opinion and Social
Base: 27 EU countries / Respondents who would be prepared to pay more for a faster internet connection (2134).
10 E-communications in the EU

11. Mobile versus fixed
Telephone access in Europe is near-universal older and living alone in a rural area in one
with penetration at 98%. Those without of the new member states.
access are disproportionately likely to be
Mobile or fixed line access %
61 58 62 62
Fixed and mobile
18 25 25 27 Mobile only
18 14 11 9 Fixed only
Dec 2005 - Jan Nov - Dec 2007 Nov - Dec 2009 Dec 2011
2006
The number of households with both mobile Mobile access only %
and fixed lines is stable, and growth in
mobile-only is at the expense of fixed line
households. However, the majority of under- 56
30s are mobile-only households*. In part, 38
this reflects the lifestyle of this age group
but it also suggests that under-30s, brought 14
up with the convenience of mobile phones,
Under 30 years old 30-59 60+
may see this as an alternative to a fixed line. years old years
old
*Analysis of single households
Source: Eurobarometer, E-communications Household Survey June 2012, conducted by TNS Opinion and Social
Base: 27 EU countries / all households.
© 2012 TNS 11

12. Calling via the internet
Internet phone calls are made by 27% of significant factor in choosing an internet
households*, up 5 percentage points since subscription, which supports the view that
the 2009 survey. people are concerned about their telecoms
bill. It is surprising then that more people
We know that around two-thirds of people
do not take advantage of internet services
say they limit their mobile calls because of
such as Skype.
costs and a similar number cite price as a
Does any household member use a PC or a Wi-Fi connected device at home
to make phone calls over the internet
No 70
Yes – free PC to PC
calls, e.g. Skype 22
Yes – international calls via
an internet phone service 4
Both options 1
Don’t know 3
*Base households with internet access
Source: Eurobarometer, E-communications Household Survey June 2012, conducted by TNS Opinion and Social
Base: 27 EU countries / Respondents with internet access at home.
12 E-communications in the EU

13. Messaging
Mobile phone messaging has grown
explosively. SMS and MMS grew from 40
billion to 331 billion per annum across the
10 years to 2011*. Growth, however, has
recently switched to social networking sites
or instant messaging services, particularly
amongst the young.
Whatsapp is a good example. It allows users
to exchange messages across platforms
without having to pay for SMS. Users
can also create groups, send each other
unlimited images, video and audio media
messages. A Dutch telecoms provider
reported that across just one year, 85% of
subscribers to a youth-targeted product
were using Whatsapp.
*Source: European Mobile Industry Observatory 2011 / Base: European Economic Area
SMS is text only, MMS is multimedia.
© 2012 TNS 13

14. Mobile ascendancy
The gentle decline in the number of fixed- Mobile usage is not limited to calls on the
line households camouflages the true growth move; an estimated 40% of mobile calls
in mobile, which accounted for 62% of all are made where the caller has access to a
call minutes in 2011, although this varies landline. This suggests that people enjoy the
significantly by country. Mobile’s position personal nature of the mobile phone.
is even stronger in terms of the numbers
We know mobile phone usage is price
of calls made. It is estimated that mobile
sensitive; two-thirds of mobile phone users
accounts for over three-quarters of all calls;
limit usage because of cost. However, the
20 calls per week compared to 6 on a
price trend is downwards. Prices fell by an
fixed line.
average 11% per annum from 2006-2010
according to GSMA.
Mobile’s % share of call minutes (v fixed line)
23
42 38
2001 2006 58 62 2011
77
Mobile Fixed line
Source: European Mobile Industry Observatory 2011 Base: European Economic Area.
14 E-communications in the EU

15. A bright future for smartphones
Smartphones are a must-have for most have their mobile switched on all of the
young people across Europe, with a social time, even when they are in bed, with over
value that greatly exceeds mobile telephony. half of adults and two-thirds of teenagers
They offer access to social networks, instant saying they have used their smartphone
messaging and text, music, games and while socialising with others. And with the
entertainment. In a recent UK Ofcom report, arrival of 4G, this will only serve to make the
37% of adults and 60% of teens admit they smartphone even more indispensable.
were ‘highly addicted’ to their smartphone*.
The vast majority of smartphone users (81%)
Smartphones ownership is predicted to grow
Smartphone ownership Smartphone ownership
in Western Europe % in Central & Eastern
Europe %
49
44
37
32
28
25
16
13
11
7 9
5
2009
2010
2011
2012
2013
2014
2009
2010
2011
2012
2013
2014
*Source: Ofcom, The Communications Market August 2011. Source: European Mobile Industry Observatory 2011.
© 2012 TNS 15

16. New mobile services are
on a growth trajectory
The smartphone has increasingly become the broad range of mobile phone features
a central part of people’s lives. This is expressed an interest suggests that the
evidenced by the meteoric growth of apps. current market has considerable growth
For example, by October 2012, Android potential. This is demonstrated by the picture
Market listed 700,000 apps that between from the UK (see below).
them had accumulated in excess of 25 billion
Commercial implications are not simply in
downloads.
the value of app sales or in the sale of new
Yet there is still a consumer appetite for the handsets, but in their ability to enable new
mobile to take on an ever greater role in commercial opportunities.
their lives. The fact that most non-users of
Opportunity for mobile services (UK)
Home control (oven, lights) 15 35 25
Video calling 23 31 24
Scanning OR codes 26 30 20
Mobile wallet 16 29 25
Mobile banking 31 28 25
Watch live TV shows 21 27 28
Using navigation services 42 26 15
Reading books, magazines 25 26 28
Using location based services 42 25 15
Source: Mobile Life; 2012 Base: Mobile Phone Users UK. Using Interested Not interested
16 E-communications in the EU

17. The coming of 4G (LTE)
Europe has been slow to introduce 4G and Access requires a 4G compatible handset and
it is rolling out at different times in different may be more expensive. However, experience
countries – it launched in the UK at the end elsewhere suggests an enthusiastic core of
of October 2012. There has been a lot of customers. In September 2012 Comscore
commercial effort to encourage its use, not reported that adoption of LTE handsets in the
only from network providers and handset USA grew ten-fold in the year to July 2012.
manufacturers, but also from those at the
vanguard of m-commerce who see profit
from consumers having fast internet access
on the move.
4G is bringing
broadband speeds to
the mobile phone
© 2012 TNS 17

18. How TNS can help
As the world’s leading custom research company, TNS is
trusted by major public and private sector organisations
to carry out large-scale research projects, such as the
Eurobarometer studies for the European Commission.
TNS understands that to market Mobile technologies are changing the world
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behaviours of the connected consumer. We are developing a mobile offer with our
Our ongoing research includes studies into partner, Lumi Mobile, that not only gives
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people switch brands, and the different
To discuss how TNS UK can help your brand
priorities and drivers of decision-making
contact Joe Webb
for those at the ‘base of the pyramid’.
Head of Digital
Our flagship study, Digital Life examines the d +44 (0)20 7160 5942
attitudes, motivations and behaviours online joseph.webb@tnsglobal.com
of over 70,000 people in 60 countries; key
findings from the latest wave can be found
at www.tnsdigitallife.com.
Eurobarometer research – the research was conducted by
TNS Opinion & Social across the 27 EU member states in
December 2011. 26,693 face-to-face at home interviews
were conducted.
18 E-communications in the EU

19. © 2012 TNS 19

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E-communications in the EU
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