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FAST BROADBAND CRUCIAL IN LOCKDOWN 3.0, BUT LACK OF COMPETITION MEANS JUST FOUR PROVIDERS SUPPLY MORE THAN 21 MILLION HOMES

Published: 14/01/2021
  • The majority (81%) of UK households use four broadband providers to connect their home
  • Nearly four in five (78%) households have not switched over the past year, despite increased internet usage since the start of the pandemic
  • The ‘Big Four’ take 81% of all switches in the market as customers stick with major suppliers
  • 82% of broadband customers would switch to a lesser-known provider if it was cheaper or better quality

14 January 2021 – The third national lockdown will see many UK households continue to video call, home-school and use streaming services as we remain stuck at home for the next few months, but lack of competition in the broadband market means that most households are relying on just four suppliers to meet their online needs.

The nation’s ‘Big Four’ internet service providers; Sky, Virgin, BT and TalkTalk supply 21 million households with broadband in the UK, according to research from comparethemarket.com. Despite a growing need for faster and more reliable internet connections during the COVID-19 pandemic, many households languish on out of date broadband packages which could be leaving them on a poor value deal.

Nearly four in five (78%) households have not switched provider in over a year and those that have are often stuck with a mainstream supplier, as research shows that the Big Four swept up 81% of switches within the market. Consumer inertia is playing into the dominance of the ‘Big Four’, with more than one third (34%) of non-switchers admitting to never having changed provider in their lifetime and almost one fifth (17%) considering it too much hassle to switch.

Whilst many customers appear to be loyal to broadband firms, many are not happy with the service they receive. More than one fifth (22%) of those who use a mainstream internet supplier described their connection as only ‘OK’ or ‘poor’ during the pandemic. A similar proportion (20%) believes they have been overcharged by their provider when their contract came to an end in the past.

Despite the number of households with one of the ‘Big Four’, 82% say that they could be persuaded to switch to a smaller, lesser-known provider – particularly if the service was cheaper or better quality. The biggest driver among those who do switch is cost, with more than half (55%) of those who changed provider aiming to save money. Speed and a poor connection are also reasons for customers changing supplier with more than a third (36%) of the remaining switchers referencing this as a deciding factor.

However, there is scepticism among some broadband customers towards lesser-known providers, as more than a quarter (26%) could not be convinced to switch away from a traditional supplier, expressing concerns around smaller firms’ ability to deliver the same standard of service. Other sticking points include financial stability, with almost a fifth (18%) worried that lesser-known firms are at risk of collapse, while a further one in eight (12%) do not trust their security measures, or simply expect them to be acquired by the industry giants.

Rural connectivity also proves to be a problem from lesser-known broadband providers, as one in six (16%) of those who would not switch to a smaller supplier say they do not operate in their area.

Commenting on the research, Holly Niblett, head of digital at comparethemarket.com, said:

“The pandemic has reinforced that broadband is a critical utility in the homes of millions. With working from home patterns set to endure even after the gradual rollout of a vaccine, it is increasingly important that households have access to a wide range of providers to ensure they can find a good broadband deal with a speed that is right for them.

“In parts of the UK – particularly rural areas – a lack of competition means broadband customers are stuck with only one provider, which isn’t a choice at all. However, we know from our research that a quarter (25%) of people who have not switched provider managed to haggle a better deal with their existing supplier when their contract came to an end  - so it’s always worth doing your research. The best way to ensure you are on the right deal is by shopping around to compare the options available to you in your area.”

ENDS

Notes to editors:

Censuswide broadband incumbents survey was commissioned by comparethemarket in October 2020

About comparethemarket.com

comparethemarket.com was launched in 2006 and has grown rapidly over the past fiffteen years to become one of the UK’s leading price comparison websites.

comparethemarket.com provides customers with an easy way to make the right choice for them on a wide range of products including motor, home, life, travel and pet insurance as well as utilities and money products such as credit cards and loans.

comparethemarket.com actively works with its brand partners to help provide great services to customers.

comparethemarket.com and comparethemeerkat.com are trading names of Compare the Market Limited. Compare the Market Limited is an insurance intermediary, which is authorised and regulated by the Financial Conduct Authority (Firm Reference Number 778488) and is registered with the Financial Conduct Authority for the provision of payment services (FRN: 911617)