Around four million UK households could be overpaying for their broadband, according to new research by Ofcom.
As part of its annual report on pricing trends for residential phone, broadband and TV services in the UK, Ofcom discovered that nearly half (46%) of customers purchasing a standard broadband service, were outside of their minimum contract term. Ofcom said that these customers typically ended up paying a non-discounted price. Just under a third (32%) of people paying for superfast broadband, were also outside of their minimum contract period.
The telecoms regulator said that customers of all the large providers, who were on standard ADSL broadband and were outside of their minimum contract term, could upgrade to superfast broadband for the same price, or even less than they were currently paying.
BT’s ADSL customers outside of their minimum contract period have seen the price of broadband rise “significantly” in real terms over the last two years, says Ofcom
Ofcom found that BT’s ADSL customers, who were not currently in a promotional discount period, had seen the price of their broadband rise “significantly” in real terms over the last two years, to a cost of £42.99 per month. Ofcom noted that BT’s superfast (fibre-to-the-cabinet) services, on the other hand, start at £24.99 per month. It said that price increases from other major providers were “much lower” during the same period.
“…many people could upgrade to faster broadband without paying more on their monthly bill”
Lindsey Fussell, Ofcom’s Consumer Group Director, said that although, overall, most people were getting good value for their broadband (and phone) services and that people were using these services more than they were a few years ago and on average paying less, she thought that there were 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”.
Around 1.5 million ‘pay monthly’ mobile phone customers could also be overpaying for their handset
Ofcom’s research also revealed that around 1.5 million ‘pay monthly’ mobile phone customers could also be overpaying for their handset.
The regulator found that although some mobile contracts did separate out the handset and ‘airtime’ parts of the contract, with the bill reducing to only a fee for airtime after the handset had been paid for, most tariffs with handsets remained the same price, per month, after the minimum contract period had come to an end.
Providers often target their best offers and discounts at those who negotiate or switch
The data also showed that although more and more people were using superfast broadband and 4G, with data use through mobiles and home-broadband growing by around 45% per year, over the past decade the average monthly household spending on communication services had decreased by 8% in real terms, to £117.
Ofcom warned that providers often targeted their “best offers and discounts” at those who switch or negotiate and concluded that those who know when their contract is up and shop around, typically pay less than those who don’t.