{"id":12536,"date":"2016-09-22T00:01:21","date_gmt":"2016-09-21T23:01:21","guid":{"rendered":"http:\/\/www.ispreview.co.uk\/?p=12536"},"modified":"2016-09-21T14:20:03","modified_gmt":"2016-09-21T13:20:03","slug":"ey-report-warns-uk-broadband-isps-must-avoid-race-bottom","status":"publish","type":"post","link":"https:\/\/www.ispreview.co.uk\/index.php\/2016\/09\/ey-report-warns-uk-broadband-isps-must-avoid-race-bottom.html","title":{"rendered":"EY Report Warns UK Broadband ISPs Must Avoid &#8220;race to the bottom&#8221;"},"content":{"rendered":"<p>A new report from global business and tax advisory firm <a href=\"http:\/\/www.ey.com\/uk\/en\/home\" target=\"_blank\">EY<\/a> has warned that 32% of UK consumers see little difference between the bundles offered by broadband ISPs, which risks encouraging a &#8220;<em>race to the bottom<\/em>&#8221; where the only perceived differentiator is price.<\/p>\n<p><!--more--><\/p>\n<p>The report (&#8216;<strong><a href=\"http:\/\/www.ey.com\/Publication\/vwLUAssets\/ey-navigating-the-bundle-jungle\/%24FILE\/ey-navigating-the-bundle-jungle.pdf\" target=\"_blank\">Navigating the Bundle Jungle<\/a><\/strong>&#8216;) appears to be based on consumer insights generated through an online survey of 2,500 UK people conducted in April 2016. This has been designed to explore end-user attitudes toward residential bundling of communication services (the data is compared with a similar study from 2013).<\/p>\n<p>The study found that 25% of respondents have expressed a willingness to switch ISP in 2016 (up from 21% in 2013) and 43% of households apparently agreed that the desire to migrate was being driven by a combination of lower prices and trust levels with service providers. For example, 55% said they&#8217;d only be interested in a Mobile bundle if it offered significant price savings.<\/p>\n<p>Furthermore, one in three households (32%) see little or no difference between providers, despite the ever widening range of offers on the market. In keeping with that, 40% of people don&#8217;t know the advertised speed of their connection and 28% of respondents find it difficult to locate a bundle that meets their needs.<\/p>\n<blockquote class=\"bq1\"><p><strong>Adrian Baschnonga, EY Lead Telecommunications Analyst, said:<\/strong><\/p>\n<p>&#8220;There has never been as much choice in the market for bundle customers, yet our report demonstrates that consumers remain confused and frustrated by what is on offer.<\/p>\n<p>For example, nearly half of the households surveyed find that introductory offers make it difficult for them to choose the best value package. This is despite the fact that 43% of households agree that these offers play a role in their choice of broadband service provider.&#8221;<\/p><\/blockquote>\n<blockquote class=\"bq1\"><p><strong>Stuart Orr, EY Partner (Telecoms), said:<\/strong><\/p>\n<p>&#8220;Even though there\u2019s greater segmentation and more targeted offerings than ever before, consumers see little difference between providers. This suggests the industry could be moving towards a model similar to the utility market, where the only perceived differentiator is price.<\/p>\n<p>Avoiding that \u2018race to the bottom\u2019 will come down to the value of the brand, particularly in terms of trust, customer engagement and service.&#8221;<\/p><\/blockquote>\n<p>On the other hand the study shows that overall levels of satisfaction have risen in the last three years. The aggregate proportion of respondents who are \u201cvery\u201d or \u201cquite\u201d satisfied has increased from 65% in 2013 to 70% in 2016. However, the proportion of very satisfied households has slipped from 30% to 27%.<\/p>\n<p><img decoding=\"async\" class=\"ngg-singlepic ngg-none\" src=\"http:\/\/www.ispreview.co.uk\/wp-content\/gallery\/2016-internet-statistics\/ey_2016_report_bundle_satisfaction.gif\" alt=\"ey_2016_report_bundle_satisfaction\" \/><\/p>\n<p>Households were also found to be &#8220;<em>marginally happier with their broadband speeds<\/em>&#8221; in 2016 than in 2013. However on this point the report claims that 62% of households now have broadband speeds above 25Mbps (up from 33% in 2013), yet <a href=\"https:\/\/www.ispreview.co.uk\/index.php\/link\/ofcom\" target=\"_blank\">Ofcom<\/a>&#8217;s own data suggests that around 57% of broadband lines are still based on slower <a href=\"https:\/\/www.ispreview.co.uk\/index.php\/link\/adsl\">ADSL<\/a> \/ ADSL2+ services (superfast Cable and FTTx solutions make up the rest).<\/p>\n<p>Elsewhere the majority of households (61%) agreed that the reliability of their broadband connection is more important than service speed, which is despite the concerted efforts of some operators to differentiate on broadband capability. Similarly only 19% of respondents say they would sacrifice their level of customer service for lower broadband prices.<\/p>\n<p>Finally it&#8217;s perhaps worth pointing out that, based on <a href=\"https:\/\/www.ispreview.co.uk\/index.php\/link\/ofcom\" target=\"_blank\">Ofcom<\/a>&#8217;s data, only around 10% of consumers did actually end up switching provider last year and that&#8217;s somewhat less than the 25% that EY&#8217;s study suggests have a expressed a &#8220;<em>willingness<\/em>&#8221; to switch.<\/p>\n<p>Based on the research, EY has segmented UK households into the following seven distinct segments. Clearly there is no one-size-fits-all approach to meeting consumer needs.<\/p>\n<blockquote><p><span style=\"color: #339966;\"><strong>The 7 Distinct Segments<\/strong><\/span><\/p>\n<p>\u00b7 Digital Devotees \u2013 Comprise 16% of the broadband household market. They are young, tech-savvy and content-hungry, they also have a high propensity to switch providers.<\/p>\n<p>\u00b7 Content Light Bundlers (17%) \u2013 Sophisticated users who understand what they are buying. Unwilling to pay for sport and prefer to have free\/basic TV as part of the bundle.<\/p>\n<p>\u00b7 Serious about sport (14%) \u2013 They are focused on being able to watch sport and are willing to pay for it. To a lesser extent, they are also willing to pay for other content.<\/p>\n<p>\u00b7 Disgruntled users (17%) \u2013 They are moderately interested in new technology but feel that purchasing bundles is complicated and confusing. Only 11% of them are very satisfied with their broadband provider, compared to 27% overall. Two in three find introductory offers confusing, compared to 49% overall.<\/p>\n<p>\u00b7 Bargain hunters (14%) \u2013 They are knowledgeable, highly price-sensitive and very value-focused. This segment has the highest proportion of those agreeing that their household spends as little as possible on communication services, at 71%.<\/p>\n<p>\u00b7 Loyal bundlers (12%) \u2013 They are highly loyal, with the highest average tenure with current providers and the lowest switching propensity. They are relatively light users of the internet, using it when they have a specific reason and restricting themselves to familiar websites.<\/p>\n<p>\u00b7 Functional users (11%) They are light users of the internet. They find purchasing communication services difficult and don\u2019t understand broadband speed or how it relates to the internet, with 39%, the highest of any segment, agreeing with this statement.<\/p><\/blockquote>\n","protected":false},"excerpt":{"rendered":"<p>A new report from global business and tax advisory firm EY has warned that 32% of UK consumers see little difference between the bundles offered by broadband ISPs, which risks encouraging a &#8220;race to the bottom&#8221; where the only perceived differentiator is price.<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"ngg_post_thumbnail":0,"footnotes":""},"categories":[1],"tags":[34],"class_list":["post-12536","post","type-post","status-publish","format-standard","hentry","category-uk_isp_news","tag-statistics"],"share_on_mastodon":{"url":"","error":""},"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v28.3 - 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