Research we’ve just completed on the UK broadband market supports the findings of similar survey work conducted by the UK regulator, OfCom. Their 2009 study found that, even in the midst of a recession, Britons were largely unwilling to cut back on household entertainment and communications spend—opting instead to economize on activities outside of the home, such as meals out, holidays away and health club memberships.

Thus, our research further confirms the so-called “cocoon hypothesis,” which posits that in times of economic hardship and scaling back, consumers rely more on activities and entertainment options within the home.

Some sneak previews from the research:

Key Highlights

*UK consumers have not made—nor do they intend to make—any radical changes in their overall home entertainment and communications spending habits.

*When asked to prioritize individual bundle components, broadband surfaces as the most important to consumers. Only 5% of those surveyed said they would drop the service altogether.

*UK Survey respondents were most inclined to scale back spending on pay digital television, fixed voice, and mobile voice, though not drop any of them completely.

*Mobile data that was found to be the most vulnerable component of the multiplay bundle.

*While service bundling does provide a measurable “insulating effect” against churn, its effectiveness varies among individual service components.

While some of the volatility in the UK broadband market can be chalked up to the economy, more of it has to do with the overall maturing of the market.  Our research pegs household broadband penetration at 70%, which means the pool of new customers is fast dwindling.