But the number of homes that cannot get a service of 10 megabits per second (mbps) or higher has fallen by one million in the last year, it found.
The report looks at how the UK's mix of fixed and wireless communication networks are developing.
Ofcom said despite the fall, "much more" had to be done to improve the UK's communications infrastructure.
"Mobile and broadband coverage continued to grow this year, but too many people and businesses are still struggling for a good service," said Steve Unger, Ofcom's director of strategy, in a statement. "We think that is unacceptable."
Ofcom's report found a significant urban-rural divide on higher speed broadband. About 25% of properties in rural areas, more than 900,000 homes, are too far from telephone exchanges to get a 10mbps service. This speed is now necessary to meet the needs of typical households, it said.
Estimates by Ofcom suggest it would take Â£1.1bn to boost networks in remote areas so they run as fast as the "decent" 10mbps networks in towns and cities.
The report noted that one-third of UK homes, 9.1 million, have signed up for superfast services - designated as 30mbps or higher.
Ofcom said the UK's mobile networks also needed to tackle areas where coverage fell short. Its report estimates that only 40% of the UK's landmass can get 4G mobile signals from all four operators. This was an improvement on 2015, when only 8% enjoyed that "total" coverage, it said.
Ofcom is now talking to network operators about "radical and ambitious" ways to fill the "not-spots" and to boost speeds.
"The advent of 5G draws ever closer, which seems extraordinary when a third of the UK's geography can't even get a call signal from all four networks," said Ernest Doku, mobiles expert at USwitch, in a statement.
"It's a bitter irony for anyone living in a coverage blackspot, who'd gladly settle for a voice call let alone 5G," he added.
The Ofcom report is published soon after a separate report from the UK's National Infrastructure Commission called mobile coverage on trains and motorways "appalling".
It found that the UK's 4G network currently ranks 54th in the world in terms of coverage.
More than 1.4 million homes in the UK cannot get decent broadband, a report from telecoms regulator Ofcom reveals.