Broadband majors, altnets respond to cost-of-living crisis
With latest UK inflation figures set to see comms contracts rise, industry reacts to mitigate against worst effects of price rises for customers and staff
Just as the latest UK Consumer Price Index (CPI) figures for inflation have painted a bleak picture for UK homes and business alike, many with mobile and broadband contracts have particular cause for concern as they are likely to see bills rise mid-contract.
However, the UK’s fixed broadband community is taking steps to help users as households feel the squeeze. “After last month’s slight dip to 9.9%, the return to double-digit inflation suggests the cost-of-living squeeze felt by millions of households is not likely to ease significantly in the run-up to Christmas,” said Richard Neudegg, director of regulation at price comparison site Uswitch.com.
“BT’s customers will have particular cause for concern as they are one of the few providers so far to confirm plans to push ahead with mid-contract rises, linked to inflation, next spring. If the current CPI rate of 10.1% is the same in January, households with the UK’s biggest internet provider will face bill increases of 14%, including the provider’s above inflation price increase clause.”
The stark analysis further warned that should other companies who carried the inflationary rises this year follow suit, it means EE, Plusnet, Vodafone and Talkmobile customers will also be facing a record hike at the end of March.
But market players have been quick to respond. Zen Internet has announced that effective immediately, customers will see a range of price drops across its Full Fibre Broadband packages, as well as its SOGEA, EveryRoom and Digital Voice offerings. Zen now offers services starting from £35 a month for Full Fibre 100 and £45 for Full Fibre 500 – up to a 10% reduction on previous prices. Zen has also made a 25% discount to its usual set-up fee, which reduces from £19.99 to £15.
On the back of the broadband provider’s six-month free broadband offer for customers, along with a 10% reduction in overall package prices, announced in September 2022, Wales’s internet company, Ogi, is introducing a series of measures to support staff during the ongoing cost-of-living crisis. Workshops covering topics including personal budgeting have been running since the summer, and free access to one-on-one independent financial advice is accompanied by a confidential employee assistance programme. A pool of online resources is also available to help staff manage their financial and wider wellbeing needs.
“Building on the support we’ve already offered to our customers through the Ogi Max Offer, I hope this package for staff will go some way to helping ease the pressure, and help them get through this challenging time,” said Ogi chief executive officer Ben Allwright. “This is about looking after our colleagues – our customers or our teams on the ground – making sure we provide as much support as we can, whatever an individual’s circumstances might be. A business like ours is nothing without its people, and in times of need it’s important we remind ourselves of this and offer a helping hand where we can.”
Read more about the UK cost of living crisis
- EY survey reveals that despite general demands for hybrid and remote working, UK households are concerned by rising home technology costs amid the cost-of-living crisis.
- UK broadband provider Hyperoptic announces Fair Fibre Framework affordability scheme that it says is part of a duty of care to protect and support customers and aid those struggling with increased financial pressures.
- The cost-of-living crisis could have a similar impact on fintech and digital banking as the Covid-19 pandemic did, inducing further innovation in the fintech sector.
And as the UK faces ongoing economic instability, with an uncertain jobs market, research has shown how a lack of adequate digital skills could exacerbate problems being faced by cash-strapped Brits struggling to make ends meet.
Indeed, according to the study from Virgin Media O2, based on economic modelling from Cebr, more than five million Brits are unable to carry out simple online tasks such as sending emails or using the internet. The research revealed that UK workers were missing out on additional earnings of £5.69bn due to a lack of digital skills.
Furthermore, more than a third of Brits (34%) felt a lack of digital skills training has held back their earning potential already, and almost a third said they need digital skills so they can shop around for deals and save money amid rising anxiety over the cost of living.
In response, the communications company has unveiled two initiatives to help address the digital skills gap at community level: free digital skills training sessions with Good Things Foundation, and a staff volunteering scheme to tackle digital exclusion, delivered through Virgin Media O2 Business’s network of local authority customers.
The sessions are designed to help people learn how to use the internet to carry out essential tasks such as word processing, emailing, accessing online services including booking medical appointments, managing their money online, applying for jobs, taking part in virtual interviews, or accessing online education or training programmes.
Virgin Media O2 Business is also launching a national programme, Connect More, to help equip digitally excluded local community residents with the skills, confidence and motivation to use everyday technology and get online to make the most of the internet. The programme will see company volunteers use five paid days a year to deliver much-needed digital skills training through, for example, local authority-run drop-in centres.
The launch of Virgin Media O2 Business’ national Connect More Programme follows a successful pilot with the Greater Manchester Combined Authority (GMCA), which saw volunteers from Virgin Media O2 Business work directly with the local authority to identify areas in the community to engage with – such as Wythenshawe Community Housing Group, where many of the free digital skills sessions were hosted. The pilot demonstrated the real-life impact of private sector organisations collaborating with local government to dedicate resources to uplifting public services.
“With the cost-of-living crisis deepening and Brits facing rising bills, it’s more important than ever that people can gain vital digital skills, so they can apply for better-paid jobs and increase their incomes, while boosting the UK’s economy by almost £13bn,” said Virgin Media O2’s Nicola Green.
Politicians have also been quick to latch on to the issue. Just days ago, the UK Labour Party launched a three-point plan designed to reign in what it said were expected broadband price increases and ease the cost-of-living crisis. Among these issues is a call for the reversal of changes the government made in 2019, which allowed regulated wholesale prices to rise with CPI rather than costs so that telecoms wholesalers and internet service providers don’t get to raise bills disproportionately.
It also called for UK comms regulator Ofcom to investigate and take action to strengthen consumer protections including taking action on mid-contract price rises, early termination costs for social tariff customers, and loyalty penalties where long-term customers pay more than new customers.
Labour also called on the comms industry – including wholesalers such as Openreach – to work with Ofcom and consumer groups to develop a mandatory, well-advertised broadband social tariff for low-income families.