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Bundled UK Broadband Services Gain Popularity and ISP Satisfaction Rises

Posted: 09th Dec, 2009 By: MarkJ
ofcomRegulator Ofcom UK has today released its annual 2009 Consumer Experience report. The study reveals that satisfaction with broadband speeds has increased (81% satisfied compared to 79% in 2008), while bundled services (broadband, TV, phone and mobile) have continue to help drive down prices.

q1 2009 broadband bundle trends

Curiously, despite consumers seeking better deals, there has been a large reduction in the proportion of those who take bundles switching providers in the last 12 months (from 24% to just 13%). Some of this is down to users being satisfied with their existing service and price, though long contract terms and complicated / costly migration processes between fully unbundled ISPs could also be to blame.

Ofcom Chief Executive Ed Richards said:

"Take-up of communications services keeps growing and consumers are becoming smarter at finding the cheaper deals available by choosing bundled services or switching from standard annual contracts. Ofcom will continue to work to make sure that there are no unnecessary obstacles to prevent consumers from switching."

Part of the reason for cheaper bundled services becoming so popular is because of the growing uptake and availability of Local Loop Unbundled ( LLU ) providers. This started around 2005 and allows rivals to install their own kit in BT's exchanges and thus offer cheaper and more flexible services.

In 2008 the UK availability of unbundled broadband services had grown to 84% from 67% in 2006, though this is still below BT's claim to reach 99.6% with at least a 512Kbps (0.5Mbps) ADSL connection; cable (i.e. Virgin Media / Cable Modem service) has remained stable at about 49%. Typically LLU ISPs prefer to target urban locations while BT is required to reach expensive rural areas too, hence the price differences.

It's worth pointing out that Ofcom has recently begun tracking the uptake of Mobile Broadband services too, which reveals that fixed broadband services dominate 88% of connection methods, Mobile Broadband accounts for 8% and 1% is held by old-style dialup and other unknown methods. Ofcom appears to define Mobile Broadband as 3G, which is likely to include 3G equipped mobile phones that may or may not get proper Internet access.

Much as we said at the start, satisfaction with broadband speed performance has also been creeping up slowly, with 39% in Q3 2009 now being 'Very Satisfied' compared with 33% at the same time last year. Still a quarter (23%) of UK adults said they had personally experienced broadband speeds that were slower than they expected, making it the most commonly experienced issue in the internet market.

q3 2009 broadband speed satisfaction

Ofcom admits that in order for consumers to fully benefit from a competitive market they need to be able to switch easily between providers, although some difficulties with switching broadband supplier still exist. For example, fully unbundled broadband ISPs are not completely supported by Ofcom's mandatory migration authorisation code (MAC) system, which can cause added costs, delays and hassle.

To resolve these problems Ofcom proposes to ensure that the effectiveness of switching processes should be a priority for 2010/11 and has begun a review of consumer switching. Likewise its Annual Plan has also pledged to make progress on 'not spots' (areas with no broadband coverage) a priority for 2010/11. Ehumm.. shouldn't it already be a priority?
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