- Lower prices and trust levels are the leading switching triggers
- One in three households believe there is little difference between broadband providers
- 40% of people don’t know the advertised speed of their connection
- Complex telecoms bundles are confusing and frustrating customers
- 49% of households agree that introductory offers make it difficult to find the telecoms bundle with the best value
Lower prices and trust levels with service providers are the leading switching triggers, cited by 43% of households, while the role played by new service elements such as premium TV and mobile (both 9%) is much less pronounced. Furthermore, one in three households see no or little difference between providers, despite the ever widening range of offers on the market; 40% of people don’t know the advertised speed of their connection; and 28% of respondents find it difficult to find a bundle that meets their needs.
Adrian Baschnonga, EY Lead Telecommunications Analyst, says: “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. 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.
“In addition, 38% of respondents to our survey now use price comparison websites to choose their broadband provider, up from 34% in 2013, further illustrating that consumers are struggling to navigate the ‘bundle jungle’.”
Reliable broadband outscores the need for speed
The majority of households (61%) agree that the reliability of their broadband connection is more important than the speed of their connection. This is despite concerted efforts from operators to differentiate on broadband capability. Customer service is also front of mind for consumers – only 19% of respondents say they would sacrifice their level of customer service for lower broadband prices.
Consumer attitudes to mobile bundles are lukewarm
Despite continuing migration to more sophisticated packages, many broadband households remain uncertain as to the merits of broadband packages that include mobile services. 55% say they would only be interested in a package that included mobile if offered a significant discount on the stand-alone price, while one in three users disagree that purchasing mobile and broadband services together is a logical purchasing decision.
Households have a diverse set of connectivity and content needs
Based on the research, EY has segmented UK households into the following seven distinct segments. It is clear that there is no one-size-fits-all approach to meeting consumer needs:
- Digital Devotees – Comprise 16% of the broadband household market. They are young, tech-savvy and content-hungry, they also have a high propensity to switch providers.
- Content Light Bundlers (17%) – 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.
- Serious about sport (14%) – 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.
- Disgruntled users (17%) – 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.
- Bargain hunters (14%) – 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%.
- Loyal bundlers (12%) – 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.
- Functional users (11%) They are light users of the internet. They find purchasing communication services difficult and don’t understand broadband speed or how it relates to the internet, with 39%, the highest of any segment, agreeing with this statement.
Stuart Orr, Partner, Technology, Media & Entertainment and Telecommunications sector, EY, says, “Even though there’s 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. Avoiding that ‘race to the bottom’ will come down to the value of the brand, particularly in terms of trust, customer engagement and service.”
Looking ahead, the EY report says service providers must take heed of consumer needs for packages that provide simple and trusted value propositions. Customers require help navigating the ‘bundle jungle’ if they are to respond positively to further service innovations.
Download the report
To find out more please go to the Bundle Jungle website:
http://www.ey.com/uk/en/industries/telecommunications/ey-consumer-telecoms-survey-navigating-the-bundle-jungle
About the ‘Navigating the Bundle Jungle: Content, connectivity and customer trust’ report
The Bundle Jungle study is designed to monitor and evaluate the attitudes of UK consumers toward multi-play packages that incorporate both telecommunications and TV services. It draws on consumer insights generated through an online survey of 2,500 UK consumers conducted in April 2016. The Bundle Jungle 2016 updates an earlier study — released in 2013 — that also explored end-user attitudes toward residential bundling.
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Hannah Forrester
Media Relations Manager
0121 535 2997
07931491342
hforrester@uk.ey.com
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