UK: consumers prefer to cut back on dining out than buying broadband, mobile telephony

[Reuters] Britain's recession-hit consumers would rather cut back on eating out and holidays than give up their broadband, mobile phone and pay-TV services, according to a new report from media regulator Ofcom.

Customers are looking to save money on communications and media deals but are still willing to pay up for services that enhance the experience, such as digital video recorders and mobile broadband.

Britons are shopping around more, signing long-term contracts in exchange for cheaper payments, and bundling services such as TV, phone and telephony, Ofcom's Communications Market Report said.

"Despite the recession, people are spending more time watching TV, using their mobile phone or accessing the Internet," said Ofcom partner Peter Phillips.

"Meanwhile, we are becoming more canny about the way we pay for these services (and) as well as getting better deals we are demanding more control."

In the first quarter of 2009, 46 percent of consumers took a bundle with two or more services from one operator, such as pay TV groups BSkyB and Virgin Media, up from 39 percent a year earlier.

For mobile phones, some 70 percent of users said they would rather retain their existing handset than upgrade if it meant a cheaper deal.

But the report showed that despite the pressure on spending, consumers were still prepared to pay for services that enhanced the experience, such as digital video recorders, high definition television and mobile broadband.

According to the report, more than a quarter of UK homes had a digital video recorder, while consumers with faster broadband access were also catching up on programs via online catch-up sites.

More than 2 million households had access to a high definition service, according to the report, and 17.6 million HD-ready sets, in nearly 9 million households, have been sold in the UK.

Almost 70 percent of homes took broadband by the end of the first quarter of 2009, up from 58 percent a year ago, while more than one in 10 households had access to mobile broadband.

Of those taking mobile broadband, three quarters also had access to fixed-line broadband, showing the two services can complement each other.

While online, some 19 million Internet users visit Facebook, spending an average of nearly 6 hours per month on the site, although those in the 15 to 24 age group were spending less time on social networking sites in general, down from 55 per cent in the first quarter of 2008 to 50 per cent in 2009.

There were 2.6 million Twitter users by May 2009 -- up from 0.1 million on the previous year.

Britons willing to pay for enhanced media services