UK communications regulator Ofcom has published its annual report on pricing trends for residential phone, broadband and TV services in the UK.

It research has found that:

• Most consumers are getting value from their phone and broadband services. Data use over both home-broadband and mobile connections is growing by around 45 per cent a year. Although more people are using superfast broadband and 4G, average monthly household spending on communications services has fallen by 8 per cent in real terms, to £117 (€134), over the last decade.
• Many people could upgrade their broadband at no extra cost. Ofcom estimates around four million households with standard ‘ADSL’ (copper) broadband are outside their minimum contract period, and could upgrade to a superfast package for the same price, or less. This is most notable for BT’s ADSL customers who are not in a promotional discount period. They have seen the price they pay rise significantly in real terms over the last two years to £42.99 a month. In contrast, BT’s superfast (fibre-to-the-cabinet) services start at £24.99 a month. Price increases from other major providers during this period were much lower.
• Some mobile customers may be over-paying for their handset. Some mobile contracts separate the handset and ‘airtime’ elements, and the bill reduces to the airtime plan only when the handset is paid off. However, most tariffs that include a handset continue to charge the same monthly fee after the minimum contract period has expired. Ofcom research suggests that around 1.5 million pay-monthly mobile customers whose contract includes a handset are still paying the same price after their initial contract period ends.

“Overall, most people are getting good value for their phone and broadband services,” advised Lindsey Fussell, Ofcom’s Consumer Group Director. “We’re all using these services more than we were a few years ago, and on average we’re paying less. But there are areas where people could get better value for money. For example, many people could upgrade to faster broadband without paying more on their monthly bill. So we’re working to make it easier for people to take advantage of the wide range of deals on offer.”

Providers often target their best offers and discounts at those who negotiate or switch. This means that consumers who shop around, and are aware of when their initial contract period ends, typically pay less than those who are less engaged.

Ofcom is taking action to help people take full advantage of the choice and value available in the market. It recently published an update on its work in this area.

It is focusing initially on end-of-contract notifications – whereby providers would proactively inform customers when they are approaching or at the end of their minimum contract period. It is also looking at the issue of mobile customers continuing to pay the same price after the end of their minimum contract period, where this price reflects the cost of their mobile handset.

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