Ofcom has published its annual Communications Market Report, revealing significant trends and changes in consumer behaviour. The report says a new networked generation of online consumers is emerging and turning away from traditional media.

The UK communications regulator reports that the national communications market exceeded £50 billion for the first time, representing over 4% of the gross domestic product.

Ofcom chief operating officer Ed Richards said the research reveals dramatic and accelerating changes across all communications industries.

“The sector is being transformed by greater competition, falling prices and the erosion of traditional revenues and audiences,” he said. “A new generation of consumers is emerging for whom online is the lead medium and convergence is instinctive.”

The number of households with a digital television increased to a total of 18.3 million, driven by the addition of nearly 2 million Freeview homes.

Total television revenues exceeded £10 billion, driven by growth in subscription income, which now exceeds advertising revenue by a 10% margin.

Meanwhile, the number of homes and small businesses with a broadband connection rose to 11 million.

The report confirms that a new ‘networked generation’ is turning away from television, radio and newspapers in favour or online services.

Online advertising revenues continued to rise to around £1.3 billion, worth more than three times that of radio advertising and a third that of television advertising at £3.8 billion.

Industry revenues from broadband access were up 70% year on year to nearly £2 billion.

Mobile revenues grew 10% to £13 billion, while landline revenues fell 7.5% to £10 billion.

Although overall consumer spend on communications rose slightly, for the first time in five years it fell slightly as a proportion of total household expenditure, largely as a result of falling prices of fixed-line charges.

The Communications Market 2006 provides a comprehensive overview of the sector in the UK, collating a remarkable range of data, and is available from the Ofcom web site.