End-of-contract notices drive better broadband deals, claims Ofcom
More people are taking out new contracts and securing better deals with their broadband provider after being reminded their contract is up, according to new Ofcom research.
In February 2020, Ofcom introduced rules requiring phone, broadband and pay-TV providers to warn customers when their current contract is ending, and what they could save by signing up to a new deal.
Its analysis of broadband contract renewals shows that these end-of-contract notifications have led to customers taking out better deals.
Plusnet saw the biggest increase (13 percentage points) in the number of customers taking out a new deal as a result of receiving one of these alerts. BT, EE and Virgin Media saw similar (10-percentage point) increases.
Ofcom also looked at the price customers pay after taking out a new contract. It found that some customers were able to save an average of more than £110 a year when taking out a new contract in response to an alert.
Customers of some providers actually paid a higher price on average after signing up to a new deal, which may reflect customers upgrading to a faster package.
The findings follow Ofcom’s research published in November 2021 that found the number of broadband customers who are out of contract fell from 8.7 million (40%) in 2019 to 7.4 million (35%) in 2020.
Says James Mackley, Ofcom‘s Economics Director:
“It’s encouraging to see more people saving money after we made it easier to grab a better deal.
“This is particularly important at a time when household budgets are under heavy strain, as the potential savings available can be significant. So it’s worth checking if you’re out of contract, and seeing what deals are available.”
Adds Ernest Doku, telecoms expert at Uswitch.com:
“Life is challenging for consumers right now, so it’s important that the rules in place inform how to access the best deals on the market and keep household bills as low as possible.
“Millions of broadband customers have received an end-of-contract notification or out-of-contract reminder since the changes were introduced in 2020, and it’s great to see the average household is saving £110 by taking action after an alert is issued.
“Many of the UK’s biggest broadband providers are reporting increases in the amount of people moving to new deals, and by doing so they are often getting better speeds for the same price or less.”
