Lack of Unmetered Internet Access Harming UK

The absence of widespread US-style unmetered access is dramatically slowing the growth of the UK Internet economy, according to a survey by Durlacher.

The survey, conducted in 4,000 homes around the UK, found that residential Internet users in the UK would increase the frequency of their Internet access by 46 percent and the duration of their Internet sessions by more than 100 percent if they had unmetered access. Taken together, these findings mean that average Internet use per residential user would triple from 130 hours per year to 386 hours per year. This does not take into account an expected increase in new Internet users that would potentially be drawn by unmetered access. After the lack of a computer, high telephone costs were cited as the biggest factor in preventing people getting Internet access in the home.

Durlacher’s study found that widespread adoption of unmetered Internet access would have a substantial benefit to consumer-focused Internet companies in the UK. Among the benefits:

• Advertising revenues would increase through increased content consumption and traffic
• E-commerce revenues would increase due to increased traffic and enhanced familiarization with the concepts and technologies of e-commerce (which itself would come from increased usage)
• Real-time services such as financial sites, chat services, Internet telephony, online games and streamed media would benefit in particular from lower barriers to usage and prolonged user connectivity
• These results have significant implications for Britain’s ambitions to create the most conducive e-commerce environment in the world. Durlacher believes that unmetered Internet access would accelerate the development of world-class e-commerce companies based in the UK, allowing the UK to develop a sustainable lead in the nascent European market.

“It is clear that the widespread adoption of unmetered Internet access would provide a massive boost for what is already a rapidly growing UK Internet economy,” said Durlacher senior Internet analyst Nick Gibson. “Thankfully, the impending introduction of new technologies and new pricing plans should start the unmetered access ball rolling.”

The Durlacher survey also found that 35 percent of all adults in the UK now use the Internet, and residential use of the Internet has increased to 17 percent of UK homes, up from 11 percent last year.

In addition to traditional home-PC-based Internet access, the acceptance level for technologies such as digital television, PDAs, mobile phones, and mobile text messaging has increased dramatically over the last decade, Durlacher found. The rate of adoption for digital television in the UK is three times faster than that for the Internet and bodes well for future technology uptake.