Top trends from the latest telecoms pricing research


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Published
Dec 12th '23
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Ofcom has published research looking at pricing trends for communications services over the past year. The findings highlight a number of trends in pricing for the services we use every day – and also show there are ways to save money.

 

Here are some of the main findings:

 

High inflation led to some customers experiencing large price rises

Many of the UK’s largest telecoms providers applied inflation-linked annual price increases over the past year, and high inflation levels resulted in many customers facing price increases of over 10%. Ofcom research showed three in ten UK households – around eight and a half million in total – were struggling to afford their communications services.

 

More customers are saving money by switching to a social tariff

Social tariffs are cheaper broadband and phone packages for people claiming Universal Credit, Pension Credit and some other benefits. Take-up of social tariffs grew substantially over the past year, from 220,000 households to 380,000. However, just over half of eligible households were unaware of social tariffs, and take-up remains low as a proportion of eligible households (8.3%).

 

Keep an eye on your contract status to get the best deal

Broadband customers who are still in contract tend to pay less than those who are out of contract. This is likely to be because many are paying ‘promotional’ prices, whereas out-of-contract customers are more likely to be paying list prices which are higher. There are significant savings available to customers who are aware of their contract status and of what offers are being offered across the market.

 

  • Broadband and bundles:

 

You can get a cheaper broadband deal if it’s part of a bundle

Households with a broadband connection could save between 17% and 34% when they purchase services bundled together by the same provider, if they also need a landline. But if you don’t need a landline, you can save money with standalone broadband. Average monthly prices for standalone broadband services were up to 15% cheaper than average prices for broadband that comes bundled with a landline.

 

Lower-cost full-fibre broadband on offer from smaller providers

Prices offered by independent full-fibre network providers are frequently lower than those offered by the larger, established fixed broadband providers. Smaller full-fibre providers were offering 900 Mbit/s to 1 Gbit/s broadband services for between £25 and £50 per month in October 2023, compared to around £50-£60 for similar services from larger providers.

 

  • Mobile:

 

Mobile prices for average users stayed steady despite increasing data use

The average monthly price of a mobile service (excluding handset cost) was unchanged compared to average prices in 2022. This was despite people using 1.6 GB (23%) more data per month on average. UK mobile prices were the second cheapest (after France) among the countries included in the research, and lower than what customers pay in Germany, Italy, Spain and the US.

 

Some SIM-only tariffs saw large price increases

Average monthly prices for SIM-only services offering between 1 and 10 GB of inclusive data increased by 23% in the year to September 2023. The main drivers of this increase were not the price of individual tariffs going up, but several lower-cost providers stopping offering these services, some services with lower data allowances being withdrawn, and new, more expensive, ones with larger inclusive data allowances being launched. While the budget mobile network operators (MNOs) offered the lowest available SIM-only prices for most of the period we looked at, and none of the larger MNOs were the cheapest provider during this period.

 

It’s cheaper to buy a handset outright than to take out a handset + airtime tariff

Pay-monthly mobile tariffs including airtime and a handset accounted for 37% of all mobile subscriptions. On average, it was 23% cheaper to buy a handset separately and use it with a SIM-only plan. While it is generally cheaper to buy a handset outright and use it with a SIM-only deal, a one-off payment for a handset is unaffordable for many people. However, manufacturers and resellers sometimes sell phones at 0% APR, so this may be a lower-cost option than taking out a combined contract.

 

More information:

 

Source: Office of Communications (Ofcom)

 

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