Choosing an unlimited “superfast broadband” (24Mbps+) ISP based on price alone isn’t always the wisest idea. Never the less some people will always preference saving a few pounds over getting the best quality, but sadly the job of trying to figure out which is the cheapest isn’t easy.
On the surface you might think that it should just be a matter of looking at the monthly price, but unfortunately today’s market is awash with a colourful array of different special offers that seem to change on an almost weekly basis. Furthermore some ISPs have muddied the water by giving consumers a choice of different contract terms, which would ordinarily be a positive development but not when confusing discounts get in the way.
On top of that there’s another obvious caveat, which is the question of how you gauge the “value” to a subscriber of various service features, such as differences in broadband speed or the availability of extras like access to public WiFi hotspots, vouchers for specific shops, TV content or free UK calls etc. The outcome of that question will be different for everybody and lest we forget that performance can change depending upon your location.
Finally, there’s the problem of coverage. Some of the best value ISPs, such as the excellent B4RN that offers an unlimited 1000Mbps FTTP/H service for just £30 per month, are only available to a tiny proportion of the UK and that would be of little use to the majority of our readers who aren’t covered. It’s a similar story for Hyperoptic and others that lack truly national coverage. Otherwise they’d easily be among our picks.
In keeping with the above we’ve opted to simplify our comparison around those services that are available to most of the United Kingdom and which also offer an unlimited usage allowance + free router. Contract length is another consideration, with most ISPs tending to offer either a 12, 18 or 24 month term. Since our goal is to find the cheapest then we’ll pick whichever contract length delivers the lowest price over the first 2 years of service.
The reason for basing our comparison on a two year model is simple. According to Ofcom, only about 10% of broadband and phone consumers switch provider each year and this suggests that the majority of consumers are either locked in for longer than 12 months or continue to take service from the same provider after their first year. A lot of discounts also last for up to 18 months and no longer.
We’ll also highlight the post-contract (year 3) price in order to show the impact of being a longer term customer (most discounts come to an end before year 3 starts), although you should assume that the year 3 price will rise beyond our stated figures because many ISPs hike their core prices at least once a year (expect rises of about 5-6% per year).
Other Key Points
* Some ISPs offer pre-paid discounts on line rental when paid annually (Line Rental Saver), which can save around £20-£40 per year. However these aren’t well promoted or offered by most ISPs and many consumers are unaware of them. As such we have not factored related discounts unless it forms a default part of the broadband bundle (e.g. Origin’s SuperSaver bundle).
* Customers that need a new line installed may face an extra charge of between £0 and £150, which we reflect below as an optional charge (i.e. not included into our totals). This is because most people tend to migrate via an already active line and so won’t need to pay for a new line.
* None of the ISPs we examined were offering a voucher or bill credit on the packages we tested, so thankfully we haven’t had to factor those.
* The prices are assumed to be the cheapest. As a result no extra charges for Paper Billing have been included and we’ve assumed that people will pay by Direct Debit. Different payment methods, such as Credit Cards, may introduce a small additional charge.
* We’ve chosen not to include any packages if they also required the customer to take a third primary service (e.g. TV or Mobile) because that wouldn’t be fair to the other providers and we’re not examining triple or quad-play bundles today.
NOTE: Since October last year the Advertising Standards Authority (ASA) has also forced ISPs to promote a single setup fee for all up-front costs (connection / migration fee, router delivery etc.) and to combine the cost of line rental and broadband into a single price (details), which has made life easier for consumers who have to compare different offers.
We’ve chosen a cross section of the four biggest and four smaller providers for our comparison, all of which should be recognised as some of the cheapest options in the market. Indeed we picked these by first looking at their standard prices (ignoring special offers), although the impact of discounts is shown in our tables and these are then explained underneath (we chose the best discounts we could find for the Jan-Feb 2017 period).
The following data is based on the publicly available information provided by each provider’s website. We attempted to uncover all of the relevant charges, but do let us know if we’ve missed anything. Some might also ask why BTInfinity isn’t present and that’s because their standard (post-contract) prices are much higher than the others.
|Top download speed||38Mbps||50Mbps||38Mbps||38Mbps|
|Top upload speed||9.5Mbps||3Mbps||1.9Mbps||1.9Mbps|
|Included UK Calls||PAYG Calls||No Phone Service||PAYG Calls||PAYG Calls|
|Contract Term||18 Months||12 Months||18 Months||18 Months|
|New Line Install Fee (Optional)||£60.00||£40.00||£49.99||£0.00|
|Monthly Cost * (First 24 Months Averaged)||£26.00||£27.13||£25.50||£28.25|
|Monthly Cost (Post-Contract / No Discounts)||£26.00||£32.25||£32.98||£32.00|
|Year 1 + 2 Total Cost * (Discounts Applied)||£673.00||£665.99||£611.88||£678.00|
|Year 3 Total Cost (Post-Contract)||£312.00||£387.00||£395.76||£384.00|
|TOTAL Cost for 3 Years||£985.00||£1,052.99||£1,007.64||£1,062.00|
Discounts Applied Above:
* Vodafone Discounts: £26 per month is the standard price. Vodafone hasn’t run any special offers but existing Mobile customers only pay £23.
* Virgin Media Discounts: £22 per month for 12 months (£32.25 thereafter).
* Plusnet Discounts: £23 per month for 18 months (£32.98 thereafter).
* TalkTalk Discounts: £27 per month for 18 months (£32 thereafter).
|PopTelecom||Origin Broadband||Direct Save Telecom||Utility Warehouse|
|Top download speed||38Mbps||38Mbps||38Mbps||38Mbps|
|Top upload speed||9.5Mbps||9.5Mbps||1.9Mbps||1.9Mbps|
|Included UK Calls||PAYG Calls||PAYG Calls||PAYG Calls||Evening, Weekends|
|Contract Term||24 Months||18 Months||12 Months||18 Months|
|New Line Install Fee (Optional)||?||£29.99 (House Move)||£29.95||£24.00 or £99.00|
|Monthly Cost * (First 24 Months Averaged)||£26.99||£25.81||£31.50||£32.34|
|Monthly Cost (Post-Contract / No Discounts)||£26.99||£31.58||£31.50||£32.34|
|Year 1 + 2 Total Cost * (Discounts Applied)||£684.75||£619.50||£780.95||£812.15|
|Year 3 Total Cost (Post-Contract)||£323.88||£378.96||£378.00||£388.08|
|TOTAL Cost for 3 Years||£1,008.63||£998.46||£1,158.95||£1,200.23|
Discounts Applied Above:
* Pop Telecom: £26.99 per month appears to be the standard price. Could find no evidence of post-contract price.
* Origin Broadband: Pre-paid £429.99 for 18 months (£23.89 per month averaged), then £31.58 per month thereafter. No upfront costs.
* Direct Save Telecom: £31.50 per month as standard.
* Utility Warehouse: £32.34 per month as standard.
One thing that’s abundantly clear from all this is that the ASA’s rule change (mentioned earlier) has made the default pricing for each ISP a lot easier to understand. The market was previously awash with “free broadband” promotions, which weren’t really free because the cost of line rental was still applicable and on top of that the setup costs were often split-up (router delivery, connection fee etc.) or hidden in the small print.
Today very few ISPs offer “free broadband” periods and instead most simply prefer to discount their monthly charge, while setup costs tend to be more representative. However we did note that some ISPs still make it difficult to know what the price will become once the initial discount period is over (post-contract) and if you need new line installed then the charge isn’t always made clear until you go through the order process. Lots of improvement, but more work left to do on clarity.
So which is the cheapest provider you ask? On the surface it may initially look as if Virgin Media is the cheapest because of their low monthly price (£22 at the time of checking), but crucially this jumps back to £32.25 after the initial 12 month contract is over and there’s a £14.99 setup charge. As a result we found that Plusnet, which at the time didn’t apply a setup fee, actually came out the cheapest for the first 2 years.
However if you’re hoping to stay longer (3 years) with your chosen ISP then Vodafone’s generally low monthly price would eventually make them the cheapest. Plus if you’re an existing mobile customer with the operator then the extra -£3 reduction on the broadband rental would make them one of the overall cheapest.
In fact we’re a little bit concerned that Vodafone might be cutting their prices too close to the bone. On the other hand Vodafone’s mobile business might also be helping to subsidise their broadband offers and such operators often see home broadband merely as a customer retention tool, thus the economic rationale is probably more complicated than may first appear.
We must also consider that there may be other features that impact upon your value consideration. For example, Utility Warehouse is more expensive than the rest but they also add free evening and weekend calls (on other ISPs that may add £2+ per month to the price). Similarly TalkTalk bundles a free Mobile SIM (500MB data, unlimited texts and 200 mins), which is a big saving vs normal mobile tariffs (we’d say it’s worth around £5 per month).
Likewise Virgin Media gives you free access to their growing network of public WiFi hotspots and some of the ISPs also offered faster speeds. Virgin Media had the best download speeds on their entry-level package but several others touted better upload rates. Lest we forget that Virgin’s entry-level 50Mbps package has just been boosted to 100Mbps, albeit not in time to be reflected in our study.
Of course choosing an ISP on price alone is always a gamble. The cheapest providers often seem to struggle with issues of service quality and or support. As a result a sensible consumer would say that it’s “always good to know who’s cheapest, so that I know which ones to avoid.” Providers that cost more will often, depending upon their economics of scale and model, have more money left over to reinvest into a better service.
The catch in all this is that by the time you read our article these offers will have changed again, but it should at least provide a useful indication of where to look for the cheapest packages and at what level to set your expectations. The big ISPs frequently rotate their discounts, although we’ve noticed that the best discounts often only appear around major events or holidays (Christmas, Black Friday, Easter, Summer etc.).
So if you can afford to be patient then sometimes it pays to wait for a better deal.