Broadband News

Simplicity of line rental changes ruined by TalkTalk contract changes

For anyone ordering a TalkTalk broadband package there are now three contract lengths to choose from - 12, 18 or 24 months. Initially this sounds like a good idea but the implementation seems a little confusing and seems to default to a 24 month contract if you don't pay careful attention. Currently a 24 month contract is the longest Ofcom allows on consumer broadband.

On what should be the go to faster broadband packages(i.e. VDSL2) the pricing is:

  • 12 month contract, £32/month plus £50 set-up fee
  • 18 month contract, £27/month plus £50 set-up fee
  • 24 month contract, £28.50/month plus £50 set-up fee

As is pretty normal these days the set-up fee applies no matter whether you are migrating in, upgrading from ADSL2+ or getting a new line activated. The price is guaranteed for the term of the contract, and this must be the reason why the two year contract is more expensive than the 18 month one. NOTE: The TalkTalk website is a little confusing as prices appear to be missing in some places. UPDATE: Tuesday 20th December, the missing price figures are now in place on the TalkTalk website.

The set-up and monthly prices of the TV packages have changed with price rises and set-up fees between £25 and £100.

While Ofcom does allow 24 month contracts, given the pace of change expected in the broadband market as ultrafast rolls out, if there is to be rapid adoption Ofcom would do well to very quickly review the consumer contract market. Of particularly irk, is that for people who've completed the 12 month minimum term at the wholesale level for VDSL2, the vast majority when migrating are met with new 12/18/24 contracts even though at the wholesale level a GEA-FTTC migration only carries a 1 month term. The longer contracts seemed fairer when promotions meant free activations, free hardware and various vouchers.

With the revived talk of Universal Service Obligation broadband vouchers, unless consumer contracts are sorted out, there is the real situation on the way that come 1st January 2020, people wanting to switch to whoever is able to supply better broadband may be faced with the choice of paying off a contract OR waiting for months before they can upgrade. Ofcom needs to act NOW, rather than the more usual retrospective remedy method to ensure that consumers and SME are free to make use of whatever better broadband vouchers are available without the noose of long contracts from existing slow services.

Comments

I have referred before to the increasing length of a new contract to which you need to agree to get the best deal

From the consumer's point of view surely Ofcom should demand the best deal with only 12 month commitment?

It is always the supplier that wins and the consumer that loses when the buyer seeks to end a contract before time

  • 961a
  • 10 months ago

What is the point of a lengthy contract in broadband if no initial discounts are given?

Energy firms need to arrange supply with future contracts to allow fixed prices but broadband companies do not suffer a loss if a customer leaves after two months. Broadband early termination fees are also bigger than gas/electricity ET fees.

  • hvis42
  • 10 months ago

As I've previously mentioned on here.
I was on a 18 month new FTTC deal which had some parts 'half price' for 12months, just as the 12 months was up and would have had to pay 'full price' the new TT contracts came in, these are lower than the old contracts and I was allowed to go across with no penalty. A friend is on a monthly rolling contract with AOL(TT) he pays more than I do.

  • burble
  • 10 months ago

Ofcom should BANNED broadband on 24 months contract! If Ofcom are allow this, then Ofcom should be sacked

  • adslmax
  • 10 months ago

@hvis42
"but broadband companies do not suffer a loss if a customer leaves after two months"

Debateable, but it depends on context.

From the bigger picture, an infrastructure provider might need to sell 100 ports for 10 years (from a 200-port capability, and 20-year lifecycle) in order to accumulate enough income to break even.

He might not care about which 100 ports, and which months go towards the accumulated break-even figure. However, those minimum-length contracts sure go a long way towards profitability long-term.
...

  • WWWombat
  • 10 months ago

One subscriber leaving or moving home isn't a killer to the business. Worst case, however, would be a competitor network (like VM) arriving 2 months later. The contract length mitigates away some of the risk of investing.

As an infrastructure provider gets closer to recovering the initial investment, the need for a lock-in decreases.

Ironically, if Ofcom enforces too short a contract period, it reduces the amount that the contract can mitigate risks ... to the extent that a provider chooses not to invest.

  • WWWombat
  • 10 months ago

I guess the "fixed price" is because up to now no broadband provider has really had a fixed term, as they all whack line rental up every year you have a getout clause every year mid contract.

  • rtho782
  • 10 months ago

I think one month rolling contracts should be the norm. The customer is then in a win win situation. Also Ofcom should clamp down on offers, freebies and the like. Some mug, somewhere, is paying for these to be on offer. And if they are based on true cost of service then all customers should be on the same cheapest offer. No such thing as a free lunch!

  • 69bertie
  • 10 months ago

There should be, mandatory, reciprocity clause in each contract.
"Best effort" service should be rewarded with "best effort" payment.
One should not be able to sell 38/ 2 Mbps speed and guarantee 8 Mbps.
We need standards.

  • dgauss
  • 10 months ago

"One should not be able to sell 38/2 Mbps speed and guarantee 8 Mbps"

It's the name of the service that is wrong. We all know that 38/2 is the maximum speed that the lower fibre service can achieve. How near a customer will get depends mainly on the actual distance of the copper wire run from the cabinet to his home and the method of calculating an estimate should be given in the offer incorporating the guaranteed 8 Mbps. How many folk will actually bother to read and understand that? Many will simply see 38 Mbps and think they are going to get that

Change the name of the product

  • 961a
  • 10 months ago

TalkTalk have ADSL2+ is called Fast and VDSL2 is called Faster.

  • andrew
  • thinkbroadband staff
  • 10 months ago

@WWWombat: "Worst case, however, would be a competitor network (like VM) arriving 2 months later. The contract length mitigates away some of the risk of investing."

There are two ways of looking at it! Lengthy contracts & lock-ins prevent/discourage the customer from leaving. Is that good because it protects the provider or bad because it's anti-competitive to the consumer?

  • csimon
  • 10 months ago

@csimon
I'd say good because, without it, some services would not be available at all. Surely that is more "anticompetitive" than having the option to commit to a contract of x months or years. I'd rather have the option than not.

  • New_Londoner
  • 10 months ago

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