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VMO2 Finds UK Broadband and Mobile Amongst the Cheapest in Europe

Tuesday, Dec 6th, 2022 (12:48 pm) - Score 2,040
pound coins pile uk

Broadband ISP and mobile giant Virgin Media and O2 (VMO2) have today published the results of a new Assembly Research study, which examined the value of telecoms services in the UK compared to other major countries and found that “typical UK prices for fixed and mobile services are amongst the lowest in Europe“.

The ongoing cost-of-living crisis will no doubt be foremost in everybody’s minds and pockets. Some of the biggest price rises over the past 1-2 years have been seen in energy utilities like gas and electricity, although annual price hikes from major broadband and mobile providers have also played their part (most big operators hiked these by around 9-10% earlier this year).

Annual price hikes are of course nothing new in this market, as well as many others. Often there are legitimate reasons for prices to go up, not least because providers are frequently adding all sorts of new services (e.g. FTTP, 5G), developing new systems, facing higher charges from suppliers (energy, lease costs etc.), paying higher wages, implementing new Ofcom rules and consumers are also gobbling significantly more data every year.

Broadly speaking, the goal of this report – ‘The value of telecoms services in the UK‘ (PDF) – seems to be to highlight how, despite the current climate, broadband and mobile services remain very good value for money. The UK also continues to have some of the most affordable services in Europe, and you get more broadband speed and data for your £ today than ever before.

Key Highlights

➤ The fiercely competitive UK telecoms market has created choice and quality for consumers. Operators have been investing ~£2.5bn a year in mobile networks and around £3.8bn in fixed.

Average monthly mobile data usage has trebled in the last five years, while fixed data consumption per capita has increased almost three-fold. At the same time, average fixed broadband download speeds have increased 72% since 2017, while the price per Mbps has fallen 39% over the same period.

➤ UK telcos offer some of the best overall value when compared internationally. Average monthly household spend on telecoms services has fallen by nearly a fifth since 2017, making the UK the second cheapest country in our study.

When considering broadband prices relative to usage per capita, the UK consistently performs best among our comparator countries. In short, UK consumers pay lower prices for the data they consume compared with their international peers.

➤ Average spend on telecoms services represents a small and declining share of total household outgoings sitting at just 3.8%. Even after recent contractual price rises are factored in, telecoms makes up just 0.7%
of the UK’s inflation rate and only 0.04 percentage points of the recent rise.

Were telecoms prices rising as fast they have been in energy, the average monthly bill would soon hit £400. Even after the Government’s £2,500 Energy Price Guarantee, monthly household spend on telecoms services would have gone above £150 from October 2022, compared to £77.40 at the end of 2021.

➤ Operators have become more understanding and supportive towards those that cannot afford their bills. After making available more than £940m of support during the coronavirus pandemic, once the cost of living crisis started to bite several proactively launched (or improved) discounted social tariffs for broadband (typically costing just £15-20 per month).

Most mobile operators are also contributing to a data bank initiative to protect against digital exclusion. Meanwhile, long-running reward schemes continue to provide extra value for consumers at no incremental cost.

However, it’s worth noting that a lot of the data in this report comes from the 2020/21 period, which is thus largely reflecting the period BEFORE the current cost-of-living crisis reached its peak. This is easy to see when you examine the table for average household spend, where energy (4.8%) is only just in front of telecoms (3.8%), which is a much smaller gap than will exist today (energy will probably be closer to ‘food’ now).

VMO2-Share-of-UK-Household-Spend

Matthew Howett, Founder of Assembly Research, said:

“There has been a long-held belief that the UK is one of the most competitive and affordable telecoms markets. By collecting robust evidence from credible sources and from countries the UK is most often compared to, we can confidently now say that belief holds true.

Putting that spend in context relative to other essential outgoings confirms the real value consumers are getting. While that may be of limited comfort to those really feeling the cost of living pinch right now, the ongoing additional support the sector has been providing, particularly since the pandemic, should help see households through the uncertainty we are all navigating.”

Lutz Schüler, CEO of Virgin Media O2, said:

“There is no doubt consumers are receiving exceptional value from our services – over the last decade it’s very clear they’re getting more and using more while paying less. The continued investment we make in expanding and upgrading networks has unlocked a tidal wave of consumption and heralded an age of unconstrained connectivity.

Despite the exceptional value we offer, we know in a cost-of-living crisis there will be people struggling to afford our services, which is why we’re stepping up to support those who need it and ensuring that everyone can get the connectivity they need and deserve.”

Overall, we can’t blame the operator for wanting to take control of the narrative and accentuate the positives for once, particularly after they’ve come under so much sustained fire from Ofcom, the government and already hard-pressed consumers. But we suspect those positives will soon be forgotten once the next round of annual price hikes starts to be unveiled in the very near future.

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Mark-Jackson
By Mark Jackson
Mark is a professional technology writer, IT consultant and computer engineer from Dorset (England), he also founded ISPreview in 1999 and enjoys analysing the latest telecoms and broadband developments. Find me on X (Twitter), Mastodon, Facebook and .
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Comments
8 Responses
  1. Avatar photo Iain says:

    lol, they’re not selling volatile crude oil. They’re selling broadband. We shouldn’t be greatful an unrelated product isn’t rising in price as fast as the item with the highest level of inflation.

  2. Avatar photo sebbb says:

    Among the cheapest in Europe? Are they kidding?
    “The goal of this report seems to be to highlight how, despite the current climate, broadband and mobile services remain very good value for money” – yes, and that’s not “it’s cheaper” in my vocabulary… is it me or I think the title is a little oversimplified?

  3. Avatar photo kir says:

    bullsh*t

  4. Avatar photo HR2Res says:

    I’ve not got time at mo to read/check through this and other figures, but I suspect this is a “Please prepare a report for us that shows us in the best light possible by judicious choice of comparative data.” report so we can justify the price hikes we anticipate making.

    The UK is conspicuously missing from this snippet from cable.co.uk about BB pricing at https://www.cable.co.uk/broadband/pricing/worldwide-comparison/#regions

    “The 29 countries measured in Western Europe span the middle to the lower end of the table, with none in the top 50 and two in the bottom 50. The regional average price of USD 49.56 makes it the seventh cheapest of the 13 global regions overall. The cheapest in the region was Italy (USD 27.70, 58th), followed by Germany (USD 27.81, 59th) and France (USD 28.92, 61st). The most expensive was Norway (USD 89.10, 185th), followed by the Faroe Islands (USD 78.83, 176th) and Iceland (USD 69.65, 168th).”

    I was going to download the xls file, but it seems unavailable (to me).

    And they have this to say about cost of 1GB mobile data:

    “The cheapest mobile data in Western Europe is in Italy – in second place overall – where the average price of 1GB is just USD 0.12. San Marino (USD 0.14) is the second-cheapest in Western Europe, followed by France (USD 0.23) and Monaco (USD 0.40). The UK (USD 0.79) is the 7th cheapest in Western Europe and 59th cheapest in the world.”

  5. Avatar photo John says:

    Its virgin, are there any surprises, of course they’ll make it out as if they’re doing the customers a favour, like a charity while making billion pound on average as profit…

    They could just use the pricing of the low end tier people on UC and use that as standard pricing in the UK.

  6. Avatar photo Lucian says:

    “The fiercely competitive UK telecoms market has created choice and quality for consumers.”

    Won’t be as fierce after Vodafone buys Three.

  7. Avatar photo Jack says:

    I get 1 gig in my French home for 29,99 euros a month optimally I can get a fixed line for 8Gbit/s for 39,99 euros a month, the UK is so far behind I’m paying £30 a month for 70Mbit/s over priced junk.

    Plus zero plans to upgrade the network past 2026.

  8. Avatar photo bert says:

    i don’t belive this anymore than virgin does.

    Maybe they should make up another report where slOw2 comes out on top.

    Equally as believable i’d say.

Comments are closed

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