Broadband providers in Britain will have to tell customers about their best deals under planned new rules from telecoms regulator Ofcom, as it found that half of households could boost their broadband.
The changes are aimed at tackling a ‘loyalty penalty’ that makes it difficult for long-standing customers to get the cheapest package.
Ofcom said it would review broadband companies’ pricing practices to examine why some customers paid more than others, and whether vulnerable customers needed extra protections to ensure they get a good deal.
Ofcom announced plans to force broadband companies to alert customers about their best offers when any deal comes to an end
Its proposed new rules would make broadband companies – as well as mobile, landline and pay-TV providers – alert customers about the best deal or ‘tariff’ they can offer when any discounted deal comes to an end, and also every year for longstanding customers.
Providers include BT, Virgin Media, Sky and TalkTalk.
Ofcom said 94 per cent of Britain’s homes and office could get superfast broadband but less than half of them had taken it up, and around 4 million households with old-style, basic broadband were no longer in their initial contract period and could switch to superfast for the same or less money than they currently pay.
Superfast broadband offers download speeds of at least 30 Mbits per second, while ultrafast broadband, typically delivered through fibre optics connections into the home, offers speeds of at least 300 Mbits per second.
‘We’re concerned that many loyal broadband customers aren’t getting the best deal they could,’ Ofcom Chief Executive Sharon White said.
‘So we’re reviewing broadband pricing practices and ensuring customers get clear, accurate information from their provider about the best deals they offer.’
The regulator’s announcement came after research from price comparison site uSwitch.com this week,
A chart of the best and worst locations for broadband in the country, based on research released earlier this week from comparison site uSwitch.com
Richard Neudegg, head of regulation at uSwitch, said: ‘Millions of broadband customers are suffering from poor speeds and are stuck on old technology, when they could be upgrading to faster services and actually paying less.
‘It’s welcome that Ofcom has raised awareness of these issues today.
‘However, the key news from today’s announcement is that the regulator is planning to take forwards refined proposals to force providers to give vital information to customers at the end of their contract, as well as those who are out of contract – and in some case have been for years.
‘Historically in telecoms, not enough has been done to put the power back into consumers’ hands. If customers are given the right tools, there is a real chance to improve households’ experience of services that are now critical in their day-to-day lives.’
TalkTalk said it welcomed Ofcom’s action.
It said it had introduced fixed low-price plans, and had actively promoted them to existing as well as new customers.
‘In two years, we have lowered the gap between what new and existing customers pay to just £1 – 2 per month, whilst the average gap in the rest of the market has grown to £13 – 15,’ TalkTalk’s Chief Executive Tristia Harrison said.