UK telecoms regulator Ofcom has announced plans to ban “confusing” inflation-linked price rises and increase transparency around mid-contract prices for mobile, broadband and pay-TV services.

Instead, the regulatory body is demanding for consumers to be fully aware of the prices they would pay upfront at the start of their contracts.

This comes as Ofcom revealed, as of April this year, around four in 10 broadband customers and over half of mobile customers were on contracts subject to inflation-linked price rises.

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However, it added that only 12% of mobile customers and 16% of broadband customers were aware of the price rise and able to identify that it was inflation-linked.

As a result, it received over 800 complaints related to price rises between January and October this year, double the number in the same period in 2021.

Ofcom CEO Dame Melanie Dawes said: “At a time when household finances are under serious strain, customers need prices to be crystal clear.

“Most people are left confused by the sheer complexity and unpredictability of inflation-linked price rise terms written into their contract, which undermines customers’ ability to shop around.

She added: “Our tougher protections would ban this practice once and for all, giving customers the clarity and certainty they need to secure the best deal for their needs and budget.”

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Ofcom has revealed that 58% of internet users are concerned about the future of Generative AI in society.

According to Ofcom’s 2023 Online Nation report, internet users are “conscious” of the potential risks of generative AI, as it was revealed that 79% of teenagers online aged between 13 and 17 are now using generative AI tools and services.

According to the report, UK Teenagers and children are far “more likely” to adopt generative artificial intelligence (AI) compared to adults.

The report also revealed that 40% of younger children aged 7-12 are also adopting the technology, with Snapchat My AI, which became freely available to all Snap users in April this year, being named the most popular generative AI tool among children and teens.

According to the research, Snapchat My AI is used by over 51% of online 7–17-year-olds.

ChatGPT is the most widely used generative AI service among internet users aged 16 and above (23%), it added.

“Getting rapidly up to speed with new technology comes as second nature to Gen Z, and generative AI is no exception,” Ofcom Group Director of Strategy and Research, Yih-Choung Teh said.

“While children and teens are driving its early adoption, we’re also seeing older internet users exploring its capabilities, both for work and for leisure.”

However, Teh added that the trade body also recognises that some people are concerned about what AI means for the future.

He said: “As online safety regulator, we’re already working to build an in-depth understanding of the opportunities and risks of new and emerging technologies so that innovation can thrive, while the safety of users is protected.”

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The watchdog will be handed the responsibility of policing, investigating, and fining video-sharing and live-streaming platforms in order to protect children from content including pornography, violence, child abuse, and other potentially harmful posts.

Within its responsibilities, Ofcom will be able to not only issue fines of up to five per cent of a company’s revenues but also temporarily suspend or restrict the services being offered by the internet’s biggest names. It will also be able order firms to hand over data or algorithms to help aid investigations.

Ofcom is expected to be given its new powers in September next year, although it will merely be acting in an ‘interim’ capacity until a new independent regulator is introduced as per the proposals laid out in the government’s Online Harms White Paper.

“This is a real chance to bring in legislative protections ahead of the forthcoming Online Harms Bill and to finally hold sites to account if they put children at risk,” Andy Burrows, the NSPCC’s head of child safety online policy, told The Telegraph, which first reported the government’s plans.

“The immediacy of livestreaming can make children more vulnerable to being coerced by abusers, who may capture the footage, share it and use it as blackmail.”

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The number of UK homes signed up to either Netflix, Amazon Prime Video, Now TV, or Disney Life has increased to 13.3m – or 47 per cent of households – this year from 11.2m in 2018. Between these households, the total number of streaming subscriptions has grown from 15.6m to 19.1m.

“Online platforms have been changing how audiences watch TV and movies for years now. Initially, the success of VoD was driven by convenience – viewers wanted mass content when and where they wanted to watch it. But that’s changed and it’s about much more than convenience now. People choose to subscribe to the likes of Netflix, NowTV and Amazon because they want the content, the talent and the watercooler moments on offer – whether that’s Netflix’s original own-branded content like Stranger Things, or YouTube’s popular influencers like Pewdiepie and Zoella. That isn’t going to change – but what will be interesting is whether the current leaders can maintain their position,” said Josh Krichefski, UK CEO at MediaCom.

“The market looks set to be more crowded than it ever has been, with Disney announcing further details on its plan to bundle ESPN+ and Hulu within Disney+. And whether it’s the gargantuan pull of Disney’s content – both old and new – or the great storytelling on the likes of Sky’s NowTV (Chernobyl) viewers will demand quality over quantity. Audiences will not pay for every single VoD service. They will make a choice on which to keep and which to get rid of. Ultimately, the winner in the race for subscribers will be whoever can consistently produce new and refreshing content. And audiences will take their eyeballs elsewhere if they don’t like what they see.”

Traditional TV viewing still accounts for 69 percent of TV time, equating to an average of three hours 12 minutes a day. However, people now watch 50 minutes less traditional TV each day than they did in 2010, with viewership among 16-24-year-olds halving in that period.

Amongst these younger people, YouTube is now, for the first time, watched for more than an hour a day (64 minutes). Overall, YouTube viewing increased by six minutes to 34 minutes, while overall daily viewing of streaming services increased by seven minutes to 26 minutes.

40 per cent of UK adults now consider online video services their main way of watching TV and film, with a similar number of people foreseeing that they may not watch any traditional TV in five years’ time.

Though general broadcast viewing time is falling, the five main public service broadcasters – BBC, ITV, Channel 4, Channel 5, and S4C – saw their viewing share sit at 52 per cent in 2018, up slightly from 51 per cent the year prior.

“The way we watch TV is changing faster than ever before. In the space of seven years, streaming services have grown from nothing to reach nearly half of British homes,” said Yih-Choung The, strategy and research group director at Ofcom.

“But traditional broadcasters still have a vital role to play, producing the kind of brilliant UK programmes that overseas tech giants struggle to match.”

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The proportion of UK adults concerned about using the internet has grown from 59 per cent in 2018 to 78 per cent this year, according to a study from Ofcom and the Information Commissioner’s Office (ICO).

In many cases, their concerns are driven by having experienced a potentially harmful experience in the past year – with 61 per cent of adults and 79 per cent of children aged between 12 and 15 suffering at least one incident of that nature.

Despite their concerns, 59 per cent of adults believe that the benefits of the internet outweigh the risks, while 61 per cent of children think it makes their lives better.

The general rise in internet worries can also be linked to the increasing amount of time people are spending online – making them more susceptible to regularly observing harmful experiences. Online time is growing by around seven per cent a year, with the average UK adult now spending three hours 15 minutes online per day last year – a rise of 11 minutes from 2017 and the equivalent of close to 50 days on the internet.

Each week, in the UK, 44m people send or receive emails, 29m send instant messages, 30m bank or pay for bills via the internet, 27m shop online, and 21m download information for work, school, or university.

But, within this, the internet’s issues are never too far away. 34 per cent of adult respondents had received unsolicited emails in the past year, while 25 per cent had encountered fake news, and 22 per cent scams or fraud.

39 per cent of children experience offensive language online, 28 per cent received unwelcome friend requests, 23 per cent encountered cyberbullying, and 20 per cent encountered trolling.

For adults, most potential harmful experiences occurred on Facebook (28 per cent), followed by Instagram (16 per cent) and Twitter (12 per cent). And only 40 per cent of adults feel that websites and social media platforms provide the tools to keep them safe online – this figure rises to 55 per cent among children.

With the increased exposure to the internet and the growing pressures on tech firms to fix up, more adults are now in support of online regulation. 70 per cent of adults now favour tighter rules for social media sites, compared to 53 per cent in 2018. For video-sharing sites, you’re looking at 64 per cent of adults versus 46 per cent in 2018. And, for instant messaging services, it’s 61 per cent versus 40 per cent in 2018.

However, 47 per cent of adults still recognise the role websites and social media platforms have in supporting free speech.

“As most of us spend more time than ever online, we’re increasingly worried about harmful content – and also more likely to come across it,” said Yih-Choung Teh, group director of strategy and research at Ofcom.

“For most people, those risks are still outweighed by the huge benefits of the internet. And while most internet users favour tighter rules in some areas, particularly social media, people also recognise the importance of protecting free speech – which is one of the internet’s great strengths.”

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According to the regulator, around 400,000 EE customers who ended their contracts early were over-billed, paying a total of around £4.3m as a result. Almost 82,000 Virgin customers were also overcharged, for an amount totalling just under £2.8m, although Virgin has already announced plans to appeal this finding.

Phone and broadband companies can charge customers who decide not to see out the minimum term of their contracts, but such charged must be made clear to customers, and must not make switching to another provider too costly. Ofcoms investigation found that both EE and Virgin Media failed to comply with these rules, with both firms failing to make sufficiently clear the charges that customers would have to pay, in addition to over-billing leavers.

“EE and Virgin Media broke our rules by overcharging people who ended their contracts early,” said Gaucho Rasmussen, director of investigations and enforcement at Ofcom. “Those people were left out of pocket, and the charges amounted to millions of pounds. That is unacceptable. These fines send a clear message to all phone and broadband firms that they must play by the rules, in the interests of their customers.”

Ofcoms investigation of EE looked at a six-year period and found that the firm had miscalculated early-exit charges when it came to customers with discount contracts leaving early. EE cooperated fully with Ofcom during the investigation, has volunteered to conduct an in-depth review of its processes and systems, and has already refunded over £2.7m to affected customers. In light of these actions, Ofcom elected to reduce the companys fine by 30 per cent.

In contrast, following Ofcoms investigation of Virgin Media charging higher-than-contracted early-exit fees, the mobile provider was fined an additional £25,000 for providing incomplete information to Ofcoms statutory information request. Virgin Media has since reminbursed or made donations to charity in respect of 99.8 per cent of affected customers, and has reduced the level of its early-exit charges by an average of 30 per cent.

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According to data from Ofcom, which was published by The Telegraph, people aged between 16 and 24 are twice as likely to run-up a staggering accumulated weekly online time of over two full 24-hour days.

When comparing generations, just one per cent of over 65s and six per cent of 55 to 64-year olds spend more than 50 hours online each week, compared to the 18 per cent – or over 1.1m people – of 16 to 24-year olds.

Furthermore, 15 per cent of younger Brits admit that they are more productive when they lose access to the internet, and 19 per cent say they are less distracted.

These findings come on the back of other research by Ofcom, which found that the number of calls Brits make with their mobile phones has fallen for the first time.

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Despite mobile usage continuing to increase, the always-on nature of Brits means they are turning away from making calls and instead utilising internet-connected messaging platforms to stay in touch with friends, family, and colleagues. And, with this, 64 per cent say that the internet is now an essential part of their life, according to Ofcom. Meanwhile, 75 per cent of smartphones users consider using a mobile to make calls as being important, compared to 92 per cent who value the importance of mobile web browsing.

This need for constant connection to devices means that Brits now check their smartphones every 12 minutes while they are awake, on average, and 40 per cent even look at their phones within five minutes of waking up – a figure that climbs to 65 per cent among those aged under 35. On top of this, 37 per cent of adults check their phones five minutes before laying their head down for the night, rising again for under 35s to 60 per cent.

Elsewhere, the proportion of people using their mobiles to access the internet has increased from 20 per cent nearly a decade ago to 72 per cent this year. And the average time spent going online on smartphones is two hours 28 minutes a day – rising to three hours 14 minutes in the 18 to 24 age bracket.

Our reliance on smartphones is even more evident in that 72 per cent of Brits say their smartphone is their most important device for accessing the internet, 71 per cent never turn off their phone, and 78 per cent say they couldn’t live without their handheld devices.

“Over the last decade, people’s lives have been transformed by the rise of the smartphone, together with better access to the internet and new services,” said Ian Macrae, director of market intelligence at Ofcom.

“Whether it’s working flexibly, keeping up with current affairs or shopping online, we can do more on the move than ever before. But while people appreciate their smartphone as their constant companion, some are finding themselves feeling overloaded when online, or frustrated when they’re not.”

With continuing rise of the smartphone, there are questions amongst Brits over what constitutes correct smartphone etiquette.

81 per cent of Brits don’t agree with people using their smartphones during meal times, while 76 per cent find it annoying when someone is listening to music, watching videos, or playing games loudly on public transport.

The generational divide is more evident in some areas more than others. 53 per cent of adults usually use their phones while watching TV with others. However, 62 per cent of those of 55 think it’s unacceptable and just 21 per cent of 18 to 34-year olds agree with them.

Our need to be connected at all times even extends to our commutes into work. 42 per cent of people find it’s essential to be online while on their way to work to deal with tasks in their personal life – with 35 per cent feeling the same about their professional life.

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The Future Telecoms Infrastructure Review (FTIR), part of the government’s modern industrial strategy, lays out a plan to provide the majority of the UK population with access to 5G, connect 15m homes with full fibre broadband by 2025, and provide full fibre broadband coverage to the entire nation by 2033.

“We want everyone in the UK to benefit from world-class connectivity no matter where they live, work or travel,” said Jeremy Wright, secretary of state at the Department of Culture, Media & Sport. “This radical new blueprint for the future of telecommunications in this country will increase competition and investment in full fibre broadband, create more commercial opportunities and make it easier and cheaper to roll out infrastructure for 5G.”

The FTIR’s recommendations include providing operators with a ‘right to entry’ to flats, business parks, office blocks, and other tenanted properties in order to provide connectivity; public investment in full fibre for rural areas along with commercial investment in urban locations; a switchover from copper to full fibre coordinated with Ofcom; increased access to spectrum for 5G services; and much more.

“We welcome the Government’s review, and share its ambition for full-fibre and 5G networks to be rolled out right across the UK,” said Sharon White, Ofcom chief executive. “The Government and Ofcom are working together, and with industry, to help ensure people and businesses get the broadband and mobile they need for the 21st century.”

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The figures, which come from a new report by Ofcom, mark the first time pay TV revenues have declined after a period of sustained growth, and also show that while broadcast TV remains popular, viewing among 16 to 34-year-olds is moving online.

Q1 2018 saw subscriptions to Netflix, Amazon Prime and Now TV, the three most popular online streaming services, hit 15.4m, overtaking pay TV subscriptions at 15.1m. This growth in subscriptions contributed to a 25 per cent increasing in online audio-visual revenues, taking them to £2.3bn in 2017, while pay TV revenues fell by 2.7 per cent to £6.4bn.

Average daily broadcast viewing on the television set fell by nine minutes in 2017 and is down 38 minutes since 2012, leading to a drop in television advertising income by seven per cent year-on-year, to £3.9bn. This also resulted in the UKs main broadcast channels (the BBC, ITV, Channel 4 and Channel 5) cutting spending on original UK-made programming, which fell to a 20-year-low of £2.5bn, a 28 per cent drop from the 2004 peak of £3.4bn. An increase in funding from third parties towards the cost of programme-making (from £147m in 2008 to £338m in 2017 across the BBC, Channel 4 and Channel 5) has partly helped to mitigate this decline.

Viewing habits continue to shift online, especially among children and younger viewers. While the average UK viewer spends three hours 22 minutes a day watching broadcast television, over-65s watch four times as much broadcast television as children in 2017.

Total daily viewing time across all devices stands at five hours and one minute, with 71 per cent spent on broadcast content. However, among 16-34-year-olds, total viewing falls to four hours 48 minutes, of which less than half is spent on broadcast content, while just under an hour a day was spent watching content on YouTube.

“Todays research finds that what we watch and how we watch it are changing rapidly, which has profound implications for UK television,” said Sharon White, chief executive of Ofcom. “We have seen a decline in revenues for pay TV, a fall in spending on new programmes by our public service broadcasters, and the growth of global video streaming giants. These challenges cannot be underestimated.

“But UK broadcasters have a history of adapting to change. By making the best British programmes and working together to reach people who are turning away from TV, our broadcasters can compete in the digital age.”

The Ofcom report also found that, for the first time, music industry revenues from online streaming subscriptions exceeded physical sales in 2017. Total retail music sales grew by six per cent in real terms between 2016 and 22017, driven by a 38 per cent increase in online streaming service subscriptions to £577m.

In contrast, overall sales of physical music formats fell to £470m, while music downloads dropped by 25 per cent as consumers shifted away from music ownership towards streaming models. Almost a quarter of all adults listen to music via streaming services each week, increasing to 51 per cent of those aged 15-24.

Radio listening also reached a significant milestone in the first quarter of 2018, as, for the first time, more than half of all listening hours were through a digital platform – online, through digital TV, or via a DAB radio. 64 per cent of adults now have a DAB set.

“Todays figures from Ofcom are a landmark on the road we have been walking down for a long time,” said Chris Anderson, head of film & TV at Muso, a global authority on digital piracy. “Technology has completely transformed the way people are able to watch TV and the days of being tied to a TV schedule are well and truly behind us, with streaming services now officially the preference for the majority of viewers.

“The word officially is key – because what these figures from Ofcom dont take into account is the many hundreds of thousands of people who are streaming TV in the UK through unlicensed services nad sites. In reality, with piracy figures considered, streaming probably overtook traditional TV long ago – but piracy audiences are overlooked by TV broadcasters, streaming services and regulators to their detriment.

“The idea that services such as Netflix and Amazon Prime have eradicated piracy is a fallacy. Our figures show that global piracy has increased year-on-year, in spite of the rise of streaming services. The UK had 4.8bn total visits to film and TV piracy sites in 2017 alone.”

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