Ofcom says overall phone and broadband prices are falling

Ofcom research has arrived at ten suggestions for how people can save on their broadband, in addition to the measures the regulator introduced such as end of contract alerts, simpler contract summaries and easier broadband switching.

The ten ideas are with a few additional words from ourselves:

• Savings are possible for out-of-contract customers, though this will generally involve agreeing to another 12, 18 or 24 month contract.
• Switching to a new provider
• Broadband altnets are often cheaper
• Consider mobile budget brands, on average Ofcom suggests savings of 40 to 50% are possible.
• Ditch unused landlines – switching to a broadband only service even with same provider can often be cheaper
• Unused mobile data – check your actual data usage over the course of a year
• Bundles are generally cheaper – though do make sure the bundle delivers what you want
• Social tariffs – for those eligible they can be an effective way to lower prices

The headline of prices failing will no doubt have seen a few aghast responses, but if you look at the pricing of 900 Mbps services which were originally in the £50 or more bracket a few years and now can be found in the £25 to £35 range you can see pricing has fallen.

Three big factors are driving falling prices..

• Take-up competition as different networks via for our custom
• Push to get people off part fibre services onto full fibre that should be cheaper to run in the long term
• Firms factoring in that headline deals may make little or no profit for 2 years but as 28% of customers seem to stay on out of contract pricing the profit comes from that part of the market.

The annual price rises at the end of March and start of April each year are a lot higher than we’ve seen in the three decades thinkbroadband has been running, it used to be seen as big news when 50 pence a month rises happened, now with the £3 to £4 a month price rises there is hardly a ripple in the news pond.

So many of the Ofcom points are things we’ve suggested over the years, so we don’t believe that this ten point list is going to make a dig difference, but for people who are just embarking on the renting/property owning route it may provide a trigger for them to get better at managing their utility bills.

What we’d love to see Ofcom encourage or mandate is fixed price contracts, i.e. rather than one or two price rises during a minimum term for the big broadband providers to average out the cost and just charge that. Since as things stand today it could be the 28% of out of contract customers are subsidising the engaged customer who does switch provider at the end of their contract or even if not switching signs up for a new lower than what they are currently contract.