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Pre-paid calling cardsMarket Research Annex

August 2004


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Contents

Section Page1 Introduction -1-

2 Main findings -2-

Annex 1 Survey questions -4-


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Pre-paid calli ng cards Market Research Annex

Section 1

Introduction1.1 Prepaid calling cards are a form of indirect access. Various telecoms providers

supply cards for consumers to use for cheaper international calls. To use theseservices consumers dial a code before entering the number they wish to call.These cards can be used in conjunction with any fixed line telephone includingpayphones.

1.2 This report profiles users of pre-paid cards. The survey was conducted forOfcom by BMRB between 1-21 July amongst 6101 GB adults aged 15+,reflecting the GB profile of sex, age, and working status1.

1Data was weighted to ensure the sample was representative of the GB adult population.Because the survey was conducted amongst a sample of adults, rather than the wholepopulations, the data may be subject to a small margin of error. The error margin for a totalsample of 544 consumers who use pre-paid calling cards is about 3-4%, but higher amongsmaller sub-groups. Results referred to as significantly different have been tested at the 95%level of confidence and hence are outside of the error margins and therefore can beconsidered real changes. All data shown is weighted data.

The report should not be seen as recommended best buys and should not therefore be reliedupon when making purchase decisions. Ofcom has conducted its own checks on the data in

this report and whilst we consider it to be correct, Ofcom accepts no liability in respect of anyof the results provided to it by BMRB or any decisions taken by any person in reliance on thereport.

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Section 2

Main findingsWho uses pre-paid calling cards?

2.1. Use of pre-paid cards has increased to 8% of GB adults from 3% in May 03,data from previous Oftel survey. This equates to around 3.7 million adults.Most of these users do so regularly, 6% at least on a monthly basis.

2.2. On average (based on median spend) users are spending around 7 per monthon calls using pre-paid cards. Spend amongst regular users is slightly higher ataround 10 per month. Regular users and hence higher spenders tend to bethose living in lower income households (under 15K per year) and equatesto 45% of all pre-paid card users (1.7 million adults).

2.3. The profile of pre-paid calling card users, as illustrated in figure 2a below, is:

Significantly more likelythan average to haveAsian or Black background;

Less likelythan average to have a fixed line phone at home;

More likelythan average to have at least one mobilein the home;

Generally young-middle aged(up to 45);

Lower incomehouseholds (under 15K per annum).

2.4. Users are also more likely to live in London, the higher use in this area likelyto be driven by higher than average proportion of ethnic groups.

2.5. Given that pre-paid cards are generally aimed at consumers with highInternational calling patterns, it is unsurprising that consumers with ethnicbackgrounds are driving usage.

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Figure 2a: Profile of prepaid calling card users compared to profi le of UKprofile

Base: 544 GB adults using prepaid calling cards, Ju ly 04

16%

17%

20%

14%

14%

19%

25%

47%

27%

12%

22%

5%

25%

24%

9%

38%

15%

32%

14%

1%

3%

3%

92%

24%

84%

7%

27%

26%

25%

45%

20%

23%

18%

3%

93%

7%

26%

9%

51%

10%

4%

95%

89%

3%

45%

15%

10%

2%

21%

22%

53%

13%

8%

6%

20%15-2425-34

35-44

45-54

55-64

65+

AB

C1C2

DE

London

South East/South West

Wales

Midlands/East

North East/North W est

Scotland

Up to 14,999

15-24,999

25-49,999

50K+

White/Irish

Mixed

Asian or Asian British

Black or black british

Chinese or other ethnic group

Fixed total

Fixed phone only

Mobile phone total

Mobile phone only

UK profile

Profile of prepaid users

Age

Social Group

Region

Household income

Ethnic group

Household phone ownership

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Annex 1

Questions

ASK ALL

Q1. How frequently, if at all, do you use a pre-paid calling card from either a fixed lineat home or payphone? PROMPTED

DailyAt least weeklyAt least monthlyEvery 2-3 monthsEvery 3-6 monthsLess frequently than ever 6 monthsNever

ASK ALL USE PREPAID CARDS

Q2. Approximately how much do you spend per month on calls using pre-paid callingcards?


Q3. Do you have a fixed/land line phone in your home?


Q4. How many mobile phones IN TOTAL do you and members of your householduse?


Q5. Do you have any long-term illnesses, health problem or disability which limitsyour daily activities or the work you can do?

ASK ALL WITH DISABILITY

Q6. Which of these, if any, limit your daily activities or the work you can do?PROMPTED

BreathlessnessPoor eye sightSpeech problemsDeafness or hearing problemsRestricted use of legs or armsMental difficultiesOther

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