As inflation rises and food prices continue to climb, many households across the UK have made the decision to go without broadband this year.
According to a survey conducted by Citizens Advice, up to one million individuals have canceled their broadband subscriptions in the past year due to the high cost of living, attempting to save money, and as part of their debt consolidation. The charity suggests that these individuals could have benefited from cheaper social tariffs or special low-cost packages. However, watchdog Ofcom has issued a warning, stating that 4.3 million eligible people are missing out on these deals.
In response to the situation, the government has collaborated with Ofcom and the industry to introduce a variety of products to the market, aiming to encourage the uptake of social tariffs. These affordable options are available in 99% of the UK and start from as low as £10 per month, according to the government's statement.
To simplify the process for benefit claimants signing up for social tariffs, a broadband eligibility checker has been introduced, and major providers such as Sky and Virgin Media have already joined the initiative.
Despite these efforts, Ofcom's findings reveal that the adoption of social tariffs remains very low, with only about 5% of eligible individuals taking advantage of them. However, this percentage has quadrupled since January of the previous year.
Citizens Advice conducted a survey of 6,000 people, which indicated that those receiving universal credit were six times more likely to have discontinued their broadband services in the past 12 months compared to non-claimants. Moreover, the charity expressed concern that the problem could worsen, as benefit claimants were four times more likely to fall behind on their broadband bills.
Ofcom reports that one in three households in the UK struggles to afford communication services, and they have called on companies to do more to promote social tariffs. Dame Clare Moriarty, the chief executive of Citizens Advice, stated the need for the watchdog to hold firms accountable and improve the uptake of these tariffs. She pointed out that people were being priced out of internet access at an alarming rate, and social tariffs should serve as the industry's safety net.
Other campaigners also highlight the fact that internet access has become an essential utility for day-to-day life. Those who cannot afford data face challenges in managing benefits, applying for jobs online, and benefiting from cheaper online prices, further exacerbating their financial difficulties.
The government claims that its job centre staff regularly guide claimants to relevant information on social tariffs, and individuals can access computers for their job searches at local job centres. Citizens Advice shared the story of Rob, a 63-year-old who has been unable to afford broadband since 2012. Rob explained that not having internet access at home significantly hampers his job applications and limits his access to services such as his GP, online help, and shopping.
The government highlights various measures it has taken to assist those who find broadband unaffordable. In June, after negotiations with the government, leaders from major broadband and mobile operators agreed to a set of public commitments aimed at supporting customers facing difficulties paying their bills.
However, the Digital Poverty Alliance, echoing the concerns of Citizens Advice, notes that while the uptake of social tariffs is slowly improving, it still falls far short of the levels necessary to ensure digital inclusion for all households. The organisation argues that even with an affordable social tariff, households in severe poverty may still struggle to afford essential connectivity.
Liberty Global and Telefonica, the respective owners of Virgin Media and O2, have announced their intention to merge, converging their services into a single telecommunications giant likely to present a major challenge to BT.
O2 is the UK’s largest phone company, with 34.5 million users on its network that covers Tesco Mobile, Sky Mobile and Giffgaff. Virgin Media has around 3 million mobile users and 5.3 million broadband and pay-television subscribers.
The combination of O2’s 4G and 5G infrastructure and Virgin Media’s ultrafast cable network will create a joint venture worth upwards of £31 billion.
Liberty Global’s chief executive, Mark Fries, emphasised the potential that the merger could hold. “Virgin Media has redefined broadband and entertainment in the UK with lightning-fast speeds and the most innovative video platform. And O2 is widely recognised as the most reliable and admired mobile operator in the UK,” he said in a statement.
Jose Maria Alvarez-Pallette, chief executive of Telefonica, described the coming partnership as “a game-changer in the UK, at a time when demand for connectivity has never been greater or more critical.”
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Analysts have begun to speculate on other possible motivations behind the merger, and its likelihood of success. Professor John Colley, Associate Dean at Warwick Business School, suggested that the move may be “opportunistic”, stemming from the focus of the Competition and Markets Authority (CMA) shifting its focus towards business survival during the COVID-19 crisis rather than the protection of competitive markets.
“However O2 and Virgin Media are businesses that are benefitting from the present covid-induced state of affairs”, Colley continued. “One suspects that the CMA will take a keen interest in this merger.”
Mike Kiersey, Principal Technologist at Boomi, a Dell Technologies business, commented that the success of the merger will likely hinge on the two companies’ ability to bring their respective infrastructures into harmony with each other:
“To establish an efficient operating state, a clear integration framework must be put in place, whether that means the entities remain separate or embrace a purely integrated approach. In most cases, a symbiosis of both IT departments will be the likely result.”
TalkTalk has acquired the blinkbox Movies business and the Tesco broadband and fixed line voice base from Tesco Plc. The assets have been acquired free of debt and as a single transaction for cash. The announcement comes one day after the beleaguered supermarket revealed plans to close 43 stores and close its staff pension scheme.
On-demand provider of pay content in the UK, blinkbox works across multiple platforms and devices – both inside and outside the home. Its product offering dovetails with that of TalkTalk’s TV platform, which services 1.2 million customers in the UK.
As part of the deal, Adrian Letts, blinkbox CEO and co-founder will join TalkTalk as Managing Director for TV, reporting to Tristia Harrison, Managing Director of TalkTalk’s consumer business.
As part of the same transaction TalkTalk has also acquired Tesco’s broadband and voice base (75,000 broadband and 20,000 voice households). As with the recent acquisition of the Virgin Media National base, customers will be transferred across to the TalkTalk network over the coming months.
“Since launch, TalkTalk TV has demonstrated its popularity with value-seeking customers to become the UK’s fastest growing TV service. We are excited about the opportunity that blinkbox’s platform and technology expertise bring, and which will significantly accelerate the development of our TV platform. The purchase of Tesco’s broadband base is another example of TalkTalk leveraging its national network to grow faster. We are excited about the future of quad-play – fixed phone and broadband, TV and mobile – and this acquisition will help to further drive home our value for money advantage,” said Dido Harding, Chief Executive of TalkTalk.
