Phonepayplus publishes market trends report and 2011/12 plan

Phonepayplus, the UK’s premium rate services regulator, has today published:

Report on Emerging Trends in the Premium Rate Services Market

Phonepayplus commissioned the report from Analysys Mason and deals with services which are billed via a consumer’s telephone bill.

The report splits the premium rate services market into various market categories and segments including:

  • information (directory inquiries and general information);
  • calling services (e.g. reverse charge or international call routing);
  • entertainment (adult, competitions and quizzes, voting and participation TV/radio, flirt/chat/date, gambling and lotteries, games, astrology/tarot/psychic, other); 
  • personalisation and gifts (mobile personalisation such as ringtones and graphics, virtual gifts); and
  • payments (charity donations, payments for non-phone based content and services).

The report estimates the market size at £816 million with entertainment the largest category worth £428 million, driven by growth in gambling, participation TV, and flirt / chat lines segments, with other categories and segments flat or declining.

Outside the growth segments, the report identifies a number of factors which are contributing to revenue stagnation or decline:

  • service delivery becoming platform agnostic, so users need not use their phones to access content or services;
  • greater availability of free information and content both user generated content and ad-funded content;
  • greater internet access as smartphone penetration increases;
  • migration of services and interaction to social networks which premium rate services do not currently integrate well with;
  • increasing diversity of payment methods:  a topic covered in detail elsewhere on this blog, but lower transaction costs in other payment methods is driving migration away from premium rate services as a payment method.

The largest single segment is directory inquiries, worth an estimated £206 million which was the second most frequently used service segment (after competitions and quizzes). Adult services remain a significant revenue generator at £129 million, but are used by a relatively small group of (presumably more frequent) consumers.

TV or radio advert calls to action were the biggest demand generators, followed by web advertising. App stores, QR codes and social networks are new, relatively small, but growing discovery methods.

Issues important to consumers include:

  • accurate price information;  and
  • user privacy.

Phonepayplus plan and budget 2010/11

The annual plan sets out Phonepayplus’ priorities for the year. These include:

  • successful implementation of new Code of Practice and industry Registration Scheme;
  • supporting implementation of the results of Ofcom’s Non-Geographic Number Review;
  • launching improved ‘Number Checker’ consumer information service;
  • developing guidance in emerging areas such as in-app billing; virtual currency and PRS on social networks;
  • reviewing success of 0871/2/3 regulation and measures brough in following 2009 mobile review; and
  • driving internal efficiencies.

Key telecoms regulatory issues for 2011 (do too many connectives watch star trek?)

With my first post done, I thought it best to try and provide a little substantive content.  Two years ago, I spent some time interviewing various CEOs, strategy and regulatory directors in various international communications companies to get their thoughts on the big issues that were coming up.  With the end of the year approaching it seemed like an opportune time to revisit that research and reflect on whether those issues were still current, and therefore worth continuing to follow.

At the time of the research, our over-riding thesis was that the telecoms industry was going undergoing structural changes that meant that regulatory structures well-suited to dealing with steady-state markets were being overwhelmed by the changes confronting them.  The market and regulatory result was likely to be similar to that experienced when other step-changes (competition, mobile telephony, broadband, etc) impacted on the market – confusion and delay.  Events over the past two years (even putting aside the small matter of the global financial crisis) would appear to have validated that idea.

The themes identified in 2008 were:

  1. Consumers, rather than the market players, were the long-term winners.  Amongst the market players, returns to the incumbents’ shareholders were better than the new market entrants.
  2. Next generation access (that is, high-speed fibre based last mile connectivity to the home or business) would be the defining issue for the telecoms industry globally.  Regulators however did not know how to approach the issue.
  3. The tension between the pipes and the poetry (telecoms infrastructure v content and services provided over that infrastructure) was starting to surface – and in particular how the costs of network upgrades would be financed.  Net neutrality had not at that stage really crossed the Atlantic, but the industry could see the way the winds were blowing.
  4. Spectrum availability,  in particular as an enabler of ubiquitous ‘current speed’ broadband, was identified as a critical factor issue to resolve, even before the iPhone and iPad.

Looking back, those themes still as relevant today as they were in 2008, so I will return to them in future posts.

Finally, the star trek reference of the title has got nothing to do with trying to spoof search engines, but in the real world it does strike me that we need less ‘next-generation’ ideas and more plain English action plans to actually make things happen.