A new study published by O2 suggests that millions of broadband users in the UK are wasting money by buying broadband services based on speeds instead of needs.
The study of over 2,000 consumers found that while the average UK consumer pays for a package of up to 20 megabits per second (Mbps) per month, the vast majority of people only require an 8Mbps package for the services they use. This means that UK broadband users could be wasting over £700 million every year on speeds they simply do not need. (nb or over £58 million per month or £2.1 million per day)
When asked for their top three most frequent uses of broadband, people’s online activities largely require low bandwidth. For example: 77% people responded that they use broadband for emailing; 74% for general webpage browsing; 51% for paying bills and banking; and 35% for social networking.
On the other hand, services that require high bandwidth and more expensive packages are used much less frequently: only 18% of people use broadband for streaming multi-media content (e.g. watching BBC iPlayer, listening to online radio); 5% download music; and 3% download films.
Felix Geyr, head of O2 Home and Broadband, said: “62% of broadband consumers in our survey would prefer their ISP to provide packages based around their specific needs. Therefore, our industry needs to tailor its services to people’s needs, help consumers understand exactly what they should be buying and avoid marketing based solely on speed.
“It would be much more transparent if we took the same ‘a la carte’ approach offered to customers buying digital TV packages, where people can opt in to obtain more expensive services like film and sport.”
Sebastien Lahtinen, co-founder of thinkbroadband.com, commented: “This research clearly highlights the need for the industry as a whole to re-think they way it sells broadband. Consumers need to be educated about what kind of service they need to cover their daily usage and the industry needs to help them to make informed choices. Whilst some users will want the fastest possible package, others may find they can save money by picking a package that is more suitable to their specific needs.”
These findings coincide with next week’s launch of O2’s new broadband packages which are tailored to consumers’ daily consumption needs rather than headline download speeds. For example, ‘The Basics’ is perfect for email and general browsing users, whereas ‘The Works’ is suitable for the heaviest data users who download films and play connected gaming.
O2 is also launching a market leading Home Phone line rental at £7.50 a month. The deal means broadband and home phone packages will start at £15.50 per month. For the first time customers will also be able to choose from a 12 month contract or rolling one month contract which gives them absolute control over their broadband account. In addition, thanks to O2’s unique Happiness Guarantee, customers will continue to be able to cancel their contract for up to 30 days after signing up if they are not satisfied.