Compare Fibre reports 21% of broadband customers don't switch providers, costing them billions.
FOR IMMEDIATE RELEASE
- Compare Fibre research suggests 83% of broadband providers enforce significant price increases at the end of their contract periods.
- The increased charges cost customers £292 million/month for the same service if they do not switch.
- A Compare Fibre survey suggests that 21% of broadband consumers said they either couldn't be "bothered with the hassle of switching" or "worried about losing internet" connectivity when switching to a new provider.
- Not switching costs Virgin broadband customers alone an extra £92 million per month.
- Renewal is an easy way for providers to get more money out of their customers.
- Ethically, this is questionable and more customers should be aware.
STARTS
Compare Fibre research has discovered that failing to switch broadband at the end of a contract period can cost broadband customers millions of pounds monthly unnecessarily.
Choosing the right broadband package for you is a choice with many facets: speed, customer service and price the main factors.
However, an often-overlooked factor is the price post-contract. The difference between contract and post-contract prices is always higher and often by a considerable margin.
Taking Virgin Media as an example, their M100 deal is £34 per month for 18 months. The price rises to £51 per month in month19 onwards. An increase of £17 per month! Across their customer base, Virgin Media have 5.42 million customers in the UK. The net effect is an extra £92.1 Million per month to Virgin Media for providing the same service.
You might think that most people would switch at the end of this period, but it's the minority in reality. In a recent survey by Compare Fibre, 21% of survey respondents said they either couldn't be "bothered with the hassle of switching" or "worried about losing internet" connectivity when switching to a new provider.
Nathan Hill-Haimes, Co-Founder of broadband price comparison site www.comparefibre.co.uk, said, "This is an effortless way for big providers to pray on a less active segment of their customer base. There has never been a more prime example of money for nothing and all customers should be aware of it. It's perfectly within the providers right to do but is ethically very troubling."
With Compare Fibre's findings, it is reasonable to speculate that Virgin alone is earning an extra £220 million from these increases. The incumbent providers are earning at least £1Bn from post-contract price rises. This leaves one big question - if OFCOM isn't stepping up to fix this issue, will the wider market deliver a solution to this inefficiency?
ENDS.