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Loyal telecoms customers pay £61m extra a month

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28/10/2015
Customers who stay loyal to their providers collectively fork out an extra £61m a month for their broadband and home phone, research reveals. 

While new customers cash in on competitive opening offers and a record-breaking number of free broadband deals, existing customers have experienced steep increases in the cost of their broadband and home phone, according to the study by uSwitch.com.

It found that broadband customers who have loyally stayed with their provider following the end of their initial contract are paying on average £8.59 a month – or £103 a year – more now than they were four years ago. With 30 per cent of people having never switched provider, this amounts to at least £61m per month overall.

The research also highlighted that 44 per cent of consumers do not know when their broadband contracts end.

Introducing end of contract notifications could encourage broadband users to shop around for a better deal and make savings of up to £151 per year, uSwitch said.

The energy market introduced end of fixed deal notifications in April 2014 and, as a result, almost six in 10 energy customers ending fixed term contracts now look into switching tariffs, either with their existing supplier or by moving to a new one.

Most broadband users would like to see something similar in the broadband market, the study said.

Three in five (60%) said they would like to receive reminders from their providers when their contract comes to an end. More than six in 10 claim it would make them more likely to switch if this reminder explained what the monthly charges would be increasing to. Bill payers would also like to see offers they might be interested in and details on how to switch.

Ewan Taylor-Gibson, broadband expert at uSwitch.com, said: “There are no prizes for loyalty. Broadband users who take the time to switch provider or tariff are quids in, but it’s a very different story for the old faithfuls who end up penalised for their inertia. And due to rising prices it’s getting worse. Broadband customers pay 40 per cent more for their loyalty now than four years ago.

“The UK telecoms market shows real similarities to energy, where loyal customers of the ‘big six’ end up paying an average of £295 a year more than those who switch regularly.

“In 2014, the energy market introduced end of fixed deal notifications, which encourage more people to consider switching, rather than languishing on expensive tariffs. If Ofcom were to introduce a similar system for telecoms, it would really help people keep track of rising prices.

“If you’re out of contract, move provider to make the most of introductory deals and keep bills down. Remember to make a note of when your contract ends – that’s the time to start shopping around for a better deal.”

Non-fibre broadband deals (including line rental)

Provider Average monthly cost 2015 Average monthly cost 2011
BT £25.20 £20.30
Sky £27.40 £22.25
TalkTalk £30.99 £27.90
Plusnet £26.39 £17.75
EE £26.98 £18.48
Average £27.39 £21.33

Source: uSwitch.com, data correct as of 1 October 2015

Fibre broadband deals (including line rental)

Provider Average monthly cost 2015 Average monthly cost 2011
BT £42.99 £31.90
Sky £37.40 N/A
Virgin Media £34.49 £27.40
TalkTalk £35.20 N/A
Plusnet £31.98 N/A
EE £36.35 N/A
Average £36.40 £29.65

Source: uSwitch.com, data correct as of 1 October 2015

 

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