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Study: UK broadband loyalty costs customers

November 12, 2018

Broadband customers are enduring terrible customer service and potentially paying hundreds of pounds a year more than they need to as providers take advantage of their loyalty, according analysis from consumer champion Which?, who found that most customers have been with their broadband provider at least three years, which may mean their introductory deal has ended.

Which? analysis of current broadband deals has found this could leave them paying an average of 15 per cent more than a new customer, although this could be as great as 89 per cent, depending on the deal and the provider.

TalkTalk had the most loyal customers of the 12 major providers surveyed, with nearly nine in 10 (85 per cent) staying with the supplier for more than three years.

But the provider also received a dismal customer score – 48 per cent – in the latest Which? broadband satisfaction survey and has been the most complained about broadband supplier now for some time, according to Ofcom.

The average increase between the price of a TalkTalk introductory offer and the standard cost of broadband after the offer is over is 15 per cent.

But the biggest price increase is for the firm’s Faster Fibre Speed Boost deal, which rises by 54 per cent (from £25 a month to £38.50) after the 18-month contract period ends – an increase of £162 a year.

Eight in 10 (80 per cent) BT customers had also stayed with their provider for at least three years. BT came close to the bottom of the table in Which?’s survey, only managing a customer satisfaction score of 49 per cent.

The average standard BT tariff is 23 per cent higher than the price of the provider’s average introductory deal. In the worst example, its standard broadband package rises from £24.99 to £32.99 after 18 months – a 32 per cent hike and £96 more a year.

Sky received the lowest customer satisfaction score for its broadband – just 47 per cent – but it still had a majority (60 per cent) of customers staying loyal for more than three years.

Sky customers face an average increase of 42 per cent when moving onto a standard tariff once their introductory offer has ended. The biggest increase is a 50 per cent rise from £20 to £30 a month on its Unlimited Broadband Package – £120 more a year.

Eight in 10 (79 per cent) Virgin Media customers told Which? they had been with the supplier for at least three years despite the firm also receiving a middling customer score of 59 per cent.

When Which? looked at the possible financial implication for customers who stay with their provider beyond the end of their initial contract, it found Virgin Media customers face the biggest price rises of the 12 broadband providers.

When they move onto a standard tariff, Virgin customers pay 52 per cent more on average than they would as a new customer.

The supplier’s biggest increase comes after the first 12 months on its VIVID 100 fibre deal, with the price rising 74 per cent – from £27 to £47 a month – totalling an extra £240 a year.

The biggest one-off price increase was from the Post Office. Its Unlimited Broadband package increased from £15.90 to £30 a month – an increase of £169 more a year or 89 per cent after the 12 month contract period. The introductory offer is also currently the cheapest deal on the market.

Meanwhile, the most highly rated providers in Which?’s customer satisfaction survey also showed signs of strong customer loyalty.

Zen Internet achieved a customer score of 86 per cent and six out of 10 (59 per cent) customers told Which? they had been with the provider for three years or more.

Zen Internet has one of the smallest average increases between their introductory offers and the standard cost of their packages once the offer is up (9 per cent). However, the price rises by 19 per cent on the firm’s Unlimited Fibre 1 deal – from £37 to £43.99, coming to £83 more a year.

Seven in ten customers (69 per cent) have also stuck with second most highly rated supplier, Utility Warehouse, for more than three years. It was awarded a customer satisfaction score of 79 per cent.

Utility Warehouse and Vodafone buck the trend by keeping their prices the same, even once the introductory period ends.

Overall, almost three quarters (71 per cent) of broadband customers in the Which? survey had been with their provider for over three years. Customers who stay with a provider for longer than two years are likely to be outside of their minimum contract period – and paying more than they need to.

New rules requiring providers to notify customers when the minimum period of their phone, broadband or pay TV contract is coming to an end have been proposed by Ofcom.

Which? supports Ofcom’s proposal and will be keeping an eye out on the outcome of this consultation as this would make it easier for customers to know when they can switch to a better deal.

Customers looking for cheaper broadband can compare deals with Which? Switch Broadband, a transparent and impartial way to compare tariffs and find the best broadband supplier.

“Broadband customers will be outraged to discover that their reward for loyalty is often a substantial price hike, with no improvement to the quality of service they are getting,” declared Alex Neill, Which? Managing Director of Home Services. “Suppliers should fight hard for your loyalty, not take it for granted. No one should be putting up with an internet service that they are not happy with.”

“Anyone who thinks they might be out of contract should look to switch to a better deal – a few minutes of your time could potentially save you hundreds of pounds a year,” he advised.

Categories: Articles, Broadband, ISP, Research