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Household spending on broadband falls even as data use increases

Monday, March 20th 2017 by Phil Wilkinson-Jones

The average UK household spends less on broadband, phone and TV services than they did a decade ago – despite a huge increase in data usage.

According to an Ofcom report on pricing trends, the average monthly household spend on broadband, TV, landline and mobile phone services fell by 9% to £133 in real terms between 2005 and 2015.

The average price of an entry-level phone and fibre broadband package fell by 25% to £34 between 2009 and 2016.

And the average price of a ‘triple-play’ bundle – phone, broadband and pay TV – fell by 16% over the same period, to £43 a month.

But the amount of data consumed over a home broadband connection in an average month has shot up – from 8GB in 2008 to 132GB in 2016.

The average amount of mobile data also increased from 0.1GB per month in 2011 to 0.9GB in 2015.

Ofcom’s report says the past decade has seen “notable changes” in the use of data services and the technologies used to deliver them.

The regulator points to the launch of the first iPhone in 2007, which sparked a revolution in the consumption of mobile data, and the introduction of on-demand TV services such as Netflix and BBC iPlayer.

There has also been heavy investment in fibre broadband and 4G mobile services.

Ofcom said the popularity of bundles – three-quarters of homes now buy more than one service from the same provider – had helped bring prices down and “made the notion of individual service pricing less relevant”.

Along with increased levels of bundling has come a dramatic rise in the number of tariffs available to consumers – from 294 dual and triple-play tariffs in 2013 to 551 just three years later.

“Growth in the number of tariffs has been compounded by the availability of tariff ‘add-ons’ (such as call packages and TV channels) and promotional discounts, which are frequently offered to new bundled service customers,” says the report.

“Together, these increase the need for consumers to engage effectively in the market in order to select a service which suits their requirements.”

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