Shell Energy Ponders Exit from the UK Broadband ISP Market
Customers of Shell Energy, which is a retail provider of energy and broadband services to UK consumers, could be facing an uncertain future after Shell launched a “strategic review” of the business due to “tough market conditions“. Shell is known to be considering several options, including an exit from the sector.
The move may come as a surprise to some, particularly since Shell has spent a fair bit of money building up their retail business over the past few years. For example, on the telecoms side, they only recently acquired some 465,000 phone and broadband customers from the Post Office’s former telecoms division (here).
Nevertheless, Shell Energy has faced many of the same challenges as other domestic retail providers in the energy sector this past year (e.g. they’ve lost almost £220 million across 2020 and 2021), which has already caused the collapse of many rival operators in the same market.
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On top of that, their telecoms division has been almost consistently topping Ofcom’s quarterly consumer complaints tables for over a year (here) – often by quite an unsettlingly large margin. Clearly, there are problems that need to be resolved, but tackling some of the underlying problems will require more investment, and it may be that Shell are now finding it much harder to see the value in that proposition.
The company itself said that they are “continually exploring options to maximise the value of our portfolio and address performance” and that “no decisions” had yet been made, although they have warned more than 2,000 affected staff to be on alert for the outcome of their review. The review process itself is expected to take several months, which means we probably won’t learn the outcome until around mid-2023 or later.
We should add that the review will also touch their operations in the Netherlands and Germany, not only the UK. The company’s wholesale and business-to-business energy supply divisions are not affected by the review.
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, BlueSky, Threads.net and Linkedin.
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Good riddance!
Greed
To be honest does this not seem obvious and a forgone conclusion as in only 23 months time the whole country (or the vast majority of it) will have FTTP and the copper switch off with be almost done everywhere.
This is like a Analogue only TV service in 1997 saying we are going to exit the market.
Optimistic much?
You Mean 2033 right?
I thought it was 2025?
PSTN switch off isn’t the same thing as FTTP everywhere
Analogue telephony may be switched off in a couple of years (moving to VoIP), but that’s not the same as saying copper will be switched off. Most analogue switch off will be ADSL/FTTC (i.e. copper) with VoIP on top, and the analogue dial tone turned off.
And none of this has anything to do with Shell exiting the broadband market.
From the point of view of an ISP, the way they connect to Openreach FTTC and FTTP is virtually identical.
I’ve seen this story on BBC News and they seem to say Shell is only considering exiting the energy market, and nothing is said about broadband other than the fact they provide it as well. How sure are we that the broadband part of the business also falls under this review?
The telecoms business only exists as a (hoped for) value add proposition on top of the energy business. Shell had decided that the great hope of Net Zero meant that their huge oil and gas operation was slowly going to vanish, that the future was electric, and the way in was by being an energy supplier. Even before the current crisis, that logic was flawed because there’s never been huge margins in domestic electricity and gas supply. Even if Shell make a modest profit from the telecoms business, it’s not big enough to be a worthwhile part of their portfolio other than if they stay in domestic energy supply, and I think they’ve now woken up to the fact that being an energy supplier is neither as easy or as profitable as they hoped. I worked in the sector when they bought First Utility, and anybody could have told them it was a daft idea! I think this review isn’t about staying in energy & telecoms, it’s about looking hopefully for a way of exiting the business at lowest cost and with the minimum of brand damage.
My brother is using Shell broadband, to be honest he has had no problems with it, and it works well even if the router is not the nicest thing to look at it does work. I know Shell broadband seem to have a lot of complaints for some reason, it is strange seeing something above Talk Talk in the number of complaints.
I was looking at Shell broadband myself as one of the options after my contract ends with Plusnet if they don’t offer me a good enough deal.
it will be a shame if they do get out of the market as it will be one less choice for people
A non-techy friend of mine with an 7Mb Shell ADSL connection recently renewed their 2 year Contract and Shell didn’t even ATTEMPT to sell them on the available FTTC option, that would more than octuple their broadband speed to a whopping 63Mb and allow them to have a solid netflix connection. At point of Contract Renewal, it would’ve been £1 more each month. To change ‘mid-contract’, its around £15 difference.
It’s pretty shoddy that ADSL is still even offered in the first place, when FTTC *is* ready available.
I appreciate my friend is ultimately responsible, but surely from a customer service point of view (“OH! Did you know we could give you a MASSIVE speed upgrade for just a quid?”), it would’ve been nice.
Now he’s locked into ADSL unless he practically doubles his monthly bill, having missed out on the ‘New Contract’ deal 🙁
That’s sad! Ofcom should force Openreach to put a stop sell on ADSL in addresses where FTTC is available. Likewise they should do the same with FTTC when FTTP is available. And they should also set prices such that FTTC is always cheaper than ADSL and FTTP is cheaper than FTTC, at same speeds, on addresses where the multiple products are available. This will encourage people to upgrade to the latest technology and assist Openreach in decommissioning their copper network.
I had nothing but trouble will Shell broadband…complaints not taken seriously and v dismissive call centre operators. Eventually paid them £178 to get out of contract as I was paying £22 monthly for practically no service. New provider now…no more troubles…as I’ve excellent service BUT paying £10 a month more but its worth it. I think Shell should pull out of Broadband services as they don’t seem to know how to administer it and give decent service. ( SO MANY COMPLAINTS TO OFCOM