Technical UK consultancy firm FarrPoint has estimated that the cost of household connectivity services (e.g. fixed broadband, phone and mobile) could rise by more than a third over the next 5 years. As usual, the proposed solution is to try shopping around for a better deal.
Many of our readers will have already been hit by price rises on their communication services of up to around 10% this year. The new findings, which used current inflation estimates to track the average increase in household spending on fixed line broadband and mobile contracts over the next 5 years, suggest that digital connectivity costs could rise by over 11% this year, and by nearly 8% in 2023.
Put another way, connectivity costs (including mobile and fixed line contracts) will have increased by over a third to £1,508 per annum by 2027 (up from £1,123 this year). The catch is that last year’s forecasts for long-term inflation were initially far too conservative and, thanks in part to the war in Ukraine, we can’t be certain precisely how things will pan out over the next few years or how the industry might respond.
Dr Muir of FarrPoint said:
“We would urge households who may be contemplating ditching their mobile phone or broadband to make savings to their household spending, to seriously think again. These are now vital domestic services and cancelling them to save money in the short-term could prove hugely counterproductive and costly further down the line, especially for price-savvy consumers who can still genuinely find the best deals and prices from shopping around online.
With more everyday services migrating online during the pandemic and the push to remote working, there is a real risk that without internet access, households would be getting rid of arguably their number-one method of cutting various costs simply to save on current everyday spending. It’s just too valuable in the wider context.
While the government’s cost-of-living package was a good first step, we’d like to see more being done by the market to protect customers and add increased flexibility to their monthly bills, which can be a real barrier for many households.
This could mean bringing down the price and increasing availability of pay-as-you-go type tariffs across fixed as well as mobile services, which would mean those on low household incomes don’t have to commit to long-term contracts which can put people off given the current uncertainty across the economy right now.”
In reality, very few people would completely cancel all of their communication services, since the vast majority do recognise how important they are. But we can see some people, such as those in dire need of support, opting to scrap their fixed lines in favour of a single mobile plan with unlimited data.
Meanwhile, others will already be shopping around for a better deal, and then there’s the option of trying to renegotiate with your current ISP (Retention Tips). Failing that, a growing number of broadband ISPs (e.g. BT, Virgin Media, Sky Broadband, NOW TV (Now Broadband), CommunityFibre, Hyperoptic and others) have also introduced cheaper Social Tariffs for those on certain state benefits.
Lest we forget that broadband and mobile are also extremely important services that can help you to save money and solve other problems (shopping, insurance, finding jobs etc.), thus it could easily be argued that such services more than pay for themselves in respect to the value they return. According to analysis by the Internet Association (IA), using the internet – such as for online shopping, working from home, banking and so forth – actually delivers an overall economic benefit of £780 a year to the average UK household.
Not just the Ukraine war but also money printed during the plandemic.
Unfortunately true.
they made tons of money from pandemic dude. More than they have brains. It was all about the money all the pandemic
I am with Sky Fibre but now I have a fibre installation in the house, if they put it up, I will just go elsewhere in a flash, it’s as easy as porting your phone. Mine is 18 months set at £32 and I have 15 months to go
I recently ported my husband from SMARTY to Sky Mobile because they offered us 5 months free if I took out a 12 month rolling SIM – no brainer but if that jumps above £6 I will port him back
I am with Giffgaff and they’ve committed to not raising domestic prices in 2022
There are some affiliate links to get SMARTY for £5 iirc.
Thanks Mike, I may come back to you on that one
I will see how Sky goes at £6 as he already had 7.92GB in his roll over which is good as he’s only on the 2GB service but doesn’t get out much
5 months free was not to be sniffed at as it worked out at £3.50/month over 12 months
At this rate it will be cheaper to buy an amateur short-wave set and annual RSGB membership and TxRx texts using a Windows morse transcriber. . . Would could be more pleasant than a return to massive whip aerials on cars
With inevitable price hikes, a couple of months ago I cancelled my PlusNet Broadband Fibre and now use a 30 day 100Gb Data Sim in a Huawei Mobile router
Speeds are much higher and I have the choice to shop around for Sims.