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CEO Ed Richards said, "With change comes complexity, and with complexity comes the increased potential for business practices that harm consumers and other forms of abuse."
Richards said the cost of a typical "basket" of residential communications services, such as telephone, television, radio and internet, had fallen by one-third over four years. Overall customer satisfaction remained high, between 88% and 93%, it said.
The abuses Ofcom has tackled in the past 12 months include silent marketing calls slamming, where a customer is moved from one telecoms provider to another without their consent complaints of racial abuse against Channel 4's Big Brother premium-rate telephone abuses, typically by TV quiz programmes and food advertisements aimed at children.
Richards said business activity that depends on the radio spectrum contributes £37bn, or 3%, to the UK GDP. The economic impact of spectrum use has increased by 50% in just over three years. Key to this was to permit new suppliers, products and services to create a competitive market.
Ofcom said some 2m telephone lines had been unbundled by March 2007. This year, the UK overtook the US in broadband availability and is now just behind Canada in terms of broadband availability in G7 countries. Average headline connection speeds in the UK are now faster than 3.8 Mbit/s, it said.
"At the end of March 2007 more than half of UK adults had broadband at home, a seven-fold increase over the last four years," Richards said.
Ofcom dropped its price control over BT last year because more than 10.7 million UK households and small businesses use a telecoms provider other than BT, and mobile phone penetration at home is on a par with fixed lines.
"The same number of UK households now has a mobile phone as a landline and for the first time, the proportion of households relying on mobile phones exclusively (10%) is the same as the proportion who only use landline phones," Richards said.
Ofcom is now addressing termination charges for calls between fixed and mobile networks, as well as - under pressure from the European Union - mobile roaming changes.
"We expect that this will lead to an annual reduction in wholesale charges of £400m to £500m over four years savings which we expect to be passed on to retail customers," he said.
Ofcom found nearly 80% of UK television households view digital television. But it warned that the switch to digital was fragmenting the market, making it harder and more expensive for broadcasters to deliver profitable audiences.