The UK benefits from cheap broadband deals
Four out of 10 UK adults with internet access use social networking sites compared to 17% in France, 12% in Germany and 22% in Italy.
The UK is eclipsed only by Canada where 53% of internet users go on social networking sites.
In Japan and the US the percentage is 32% and 34% respectively.
The Ofcom report into the £873bn telecoms, radio and television sectors compared the UK with 11 other countries, including Canada and the US.
It also looked at emerging giants Brazil, Russia, India and China, where mobile phone growth is particularly strong.
The report found that the US and UK are the only places where men do not use the internet more than women.
In the UK, the split is equal, while in the US 52% of internet users are women.
The watchdog also said that the UK enjoys some of the cheapest deals for telephone, pay-TV and broadband.
In the UK, about 40% of households already take a bundled service, where they pay a monthly fee for a telephone landline, pay-TV and the internet.
This can be as low as £25 in the UK for a typical family household including two parents and two children.
This compares with £27.22 in France, £39.77 in Germany and £69.54 in the US.
Price may be one of the reasons the UK has the highest take-up of digital television in the 12 countries surveyed.
At the end of 2006, about 76% of UK households were digital.
But it is still Japanese and US consumers who spend the most time watching television, averaging 4.5 hours a day.
This is one hour more than people spend in front of television in the UK.
Internet advertising revenues are also on the rise, particularly in the UK.
At £33, advertisers in the UK spend more money per person on internet advertising than any other country, twice as much as that spent in France, Germany and Italy combined.
Overall, the money to be made from telecom services is increasing, reflecting the growing importance of the sector.
Telecom services revenue per head increased by 20% - from £288m in 2001 to £345m in 2006 - across the countries surveyed, the report found.
Global take up
Globally, mobiles are driving growth in the communications sector, now accounting for 53% of total telecoms revenues.
By the end of 2006, there were 402 million landlines and 634 million mobile connections in the 12 countries surveyed.
Brazil, Russia, China and India are driving much of this growth.
Since 2001, more than 660 million subscriptions were added in these four countries, accounting for 40% of total new mobile subscriptions globally.
Last year, mobile phone users in China sent 429 billion text messages, or 967 text messages per user, compared with 621 per mobile user in the UK.
New subscriptions in India doubled to 150 million, more than twice the number of UK subscribers.