Millions of people with broadband, landline and pay-TV bundles, who are now out of contract, are paying £17 a month – £204 a year – more than necessary, it has been revealed.
New figures from the industry regulator Ofcom shows that loyal customers who stick with a supplier beyond the end of their contract are typically being charged much higher than a new customer.
At the same time, it has pointed out that smaller providers of internet and telecoms services are typically significantly cheaper than the major players in the industry.
Ofcom said out-of-contract customers “could make significant savings” if they shopped around and signed up to the cheapest deals available.
It said: “Our data shows that 36 percent of dual-play fixed broadband and landline customers and 32 percent of triple-play fixed broadband, landline and pay-TV customers were out-of-contract at the end of June 2024.
“Their bills were 18 precent and 16 percent higher respectively than in-contract customers.”
In cash terms, it said out-of-contract customers who have broadband, landline, and a pay-TV bundle are typically paying £17 a month more. At the same time, people with just broadband and landline bundles were paying £7 a month more, on average.
Ofgem found that ultrafast broadband deals are frequently cheaper from smaller providers, providing savings worth up to £156 a year.
It found promotional prices for 900 Mbit/s to 1 Gbit/s broadband services from independent full-fibre network providers start at £26 per month, which compared to £39 per month for the cheapest similar service from a larger provider.
On a positive note, the Ofgem research found mobile phone prices have fallen in real terms over the past year.
The average price of a basket of mobile services reflecting the average person’s use was 5 percent lower in real terms in 2024 than in 2023 and 23 percent lower than in 2019 – despite average data use trebling over this period.
Average prices for all the SIM-only service categories we look at also fell year on year, by between 1 percent and 11 percent. Customers who buy a SIM-only plan and a handset separately pay around 25 percent or £200 less than customers on tariffs that include airtime and a handset.
A comparison of prices across six countries found the UK had the joint lowest fixed broadband prices with Italy – coming in cheaper than France, Germany, Spain, and the US.
The UK has the second-cheapest standalone mobile prices – higher than France, but lower than Germany, Italy, Spain, and the US.
Broadband and telecoms giants have been under pressure to support low income customers with cheaper social tariffs. They are priced between £12 and £23 a month for broadband and £10 to £12 a month for mobile – helping save broadband customers around £220 a year on average.
By June 2024, around 506,000 customers had taken advantage of these offers – an increase of 125,000 since September 2023. Despite this substantial growth, take-up of social tariffs remains low as a proportion of all eligible customers.
Ofcom’s latest research found that 69 percent of eligible broadband customers are completely unaware of the cheap social tariff deals.
Natalie Black, Ofcom’s Group Director, Networks and Telecoms, said: “Mobile and broadband services in the UK remain competitively priced and generally compare favourably to other countries. With significant savings to be had, especially for the fastest packages, it’s important as ever for customers to shop around.
“It’s also encouraging to see more people taking advantage of the wider range of social tariffs now available, but with many more eligible customers unaware, there’s still a job for communications providers to do to further promote this vital support.”
