Table of Contents
Executive Summary
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- Impact of COVID-19 on broadband and bundled communications category
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- Figure 1: Short, medium and long-term impact of COVID-19 on broadband and bundled communications market, February 2021
- The market
- Small uptick in faster broadband packages offset by falling voice and TV revenues
- Increased usage of data does not necessarily translate into more revenues
- Industry-wide decline in voice revenues also affects market size
- Pay-TV sector hit hard due to COVID-19 suspension of sport
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- Figure 2: Market size and forecast for broadband and bundled communications sector, 2015-25 (prepared on 8/2/21)
- Companies and brands
- Smaller players can establish a foothold with ultrafast offerings
- Investment in ultrafast broadband offerings will see established players consolidate
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- Figure 3: Fixed broadband market share, 2013-19
- Sky loses approximately 300,000 pay-TV customers between Q1 and Q3 2020
- OneWeb aims for the stars with satellite broadband provision
- The consumer
- COVID’s impact has caused some to upgrade their internet package and made others think about doing so
- BT holds marginal gain over Virgin Media as most popular broadband provider
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- Figure 4: Broadband supplier, November 2020
- Nearly four in 10 have super or ultrafast broadband connections
- Over a quarter don’t know what speed their broadband service is
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- Figure 5: Average speed of broadband connection, November 2020
- 16% have 10 or more devices running on their broadband connection
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- Figure 6: Number of devices connected to broadband, November 2020
- The majority are satisfied with their broadband provider
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- Figure 7: Levels of satisfaction with broadband providers, November 2020
- Landline and broadband remains the most common bundle
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- Figure 8: Use of bundled services, November 2020
- Over a third are paying more than £41 a month for communications services
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- Figure 9: Average monthly spend with broadband provider, November 2020
- Over half have haggled with their provider to get a better deal on broadband services
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- Figure 10: Attitudes towards broadband and bundled communications services, November 2020
- More than half see the appeal of a broadband-switching tool
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- Figure 11: Attitudes towards broadband services, November 2020
Issues and Insights
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- Consumers’ lack of engagement and knowledge can hinder switching
- Simplifying service level language can help break down barriers of engagement
- More can be done to encourage switching in the marketplace
- A ‘no drop in service’ guarantee would assuage worried switchers
- A ‘do it for me’ tool can distil the abundance of choice and create a valuable shortcut for consumers
- Gigabit rollout can bring smaller players into the fray more during 2021
The Market – Key Takeaways
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- Average monthly data usage up over a third in 2020 due to COVID-19
- Market value in 2020 will likely drop off as reduction in pay-TV and telecoms revenues inhibits growth
- Household financial pressures can mean some are in danger of having services cut
- National Infrastructure Plan and Universal Service Obligation provide a platform for growth
Market Size and Forecast
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- Downward trend of market value to continue despite consumers’ reliance on broadband connections
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- Figure 12: Short, medium and long-term impact of COVID-19 on broadband and bundled communications market, February 2021
- Small uptick in faster broadband packages offset by falling voice and TV revenues
- Increased usage of data does not necessarily translate into more revenues
- Household financial pressures can mean some are in danger of having services cut
- Industry-wide decline in voice revenues also affects market size
- Pay-TV sector hit hard due to COVID-19 suspension of sport
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- Figure 13: Market size and forecast for broadband and bundled communications sector, 2015-25 (prepared on 8/2/21)
- Figure 14: Market size and forecast for broadband and bundled communications sector, 2015-25 (prepared on 8/2/21)
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- Figure 15: Fixed telecoms and TV subscription revenues, 2015-20
- Market drivers and assumptions
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- Figure 16: Key drivers affecting Mintel’s market forecast, 2015-25 (prepared on 5 March 2021)
- Learnings from the last recession
- Forecast methodology
Market Drivers
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- Impact of the January 2021 lockdown
- One in five households suffering from affordability problems in 2020
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- Figure 17: Trends in how respondents would describe their financial situation, Jan 20-Jan 21
- Major telecoms players announce inflation-busting price rises in 2021
- Monthly data usage up nearly 80% in two years
- Gaming drives another peak in broadband data usage
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- Figure 18: Average traffic profile (Gbit/s) on weekdays before national lockdown (27 Jan-22 March 2020) and subsequent lockdown (23 Mar-31 July)
- Average speeds hit 64Mbit/s in 2019
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- Figure 19: Average download speed of UK residential fixed broadband connections, 2013-19
- Government announces National Infrastructure Plan
- Universal Service Obligation launches in March 2020
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- Figure 20: Residential gigabit-capable and full-fibre coverage, UK, 2020
Companies and Brands – Key Takeaways
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- BT continues as top broadband provider
- OneWeb and Starlink aim for the stars with satellite broadband programmes
- Gigabit rollout gathers pace
- Telecoms companies support families, students and jobseekers through COVID
Market Share
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- BT continues as top broadband provider
- Smaller players can establish a foothold with ultrafast offerings
- Investment in ultrafast broadband offerings will see established players consolidate
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- Figure 21: Fixed broadband market share, 2013-19
- Sky loses approximately 300,000 customers between Q1 and Q3 2020
- Numbers of terrestrial-only households down in Q3 2020
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- Figure 22: UK household TV platforms, Q3 2020 and Q4 2019
Launch Activity and Innovation
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- OneWeb aims for the stars with satellite broadband provision
- Starlink runs a beta test in December 2020 for satellite broadband provision
- Zen Internet to offer gigabit broadband in Newcastle and Worthing
- CityFibre launches tie-ups with Virgin and TalkTalk to deliver full-fibre services
- Virgin continues its rollout of Gigabit broadband across the UK
- Scotland gets funding boost for its gigabit project
- Community Fibre launches 3 Gigabit home broadband service
- Sky gives customers free perks on mobile, calls and viewing service during initial lockdown
- Telecoms companies support families, students and jobseekers through COVID
- Virgin Media launches new Virgin 360 TV service and revamps Virgin TV Go
Advertising and Marketing Activity
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- BT urges consumers not to be with the wrong provider
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- Figure 23: Top 10 advertisers in above-the-line, online display and direct mail advertising expenditure on home broadband, home broadband & landline, home broadband & landline & TV, and mobile and fixed-line services, 2020
- Sky focuses on TV spots for its broadband sale but runs into trouble with ASA
- COVID-19 brings out a rethink on creative campaigns to focus on brand tone
- BT runs mini-educational slots to help nation’s digital literacy
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- Figure 24: Top 10 telecoms advertising campaigns, by product and channel, 2020
- Nielsen Ad Intel coverage
Brand Research
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- Brand map
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- Figure 25: Attitudes towards and usage of selected brands, December 2020
- Key brand metrics
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- Figure 26: Key metrics for selected brands, December 2020
- Brand attitudes: Sky Broadband is the most recommended brand out of all providers
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- Figure 27: Attitudes, by brand, December 2020
- Brand personality: Virgin Media seen as the most ‘exclusive’ of brands
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- Figure 28: Brand personality – Macro image, December 2020
- BT seen as the most reliable
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- Figure 29: Brand personality – Micro image, December 2020
- Brand analysis
- Sky Broadband performs well across all brand metrics
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- Figure 30: User profile of Sky Broadband, December 2020
- Nearly two thirds who have ever used Virgin Media would give a positive endorsement
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- Figure 31: User profile of Virgin Media, December 2020
- BT has the highest proportion of consumers who have ever used the brand
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- Figure 32: User profile of BT, December 2020
- Vodafone seen as a “flexible” and “approachable” brand
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- Figure 33: User profile of Vodafone, December 2020
The Consumer – Key Takeaways
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- COVID’s impact has caused some to upgrade their internet package and made others think about doing so
- BT holds marginal lead over Virgin Media as most popular broadband provider
- Over two thirds of consumers have been with their broadband provider for more than three years
- Nearly four in 10 have super or ultrafast broadband connection
- The majority are satisfied with their broadband provider
- Landline and broadband is the most common bundle
- Over half have haggled with their provider to get a better deal on broadband services
- Auto-switching tools can help demystify the market and filter choice
Impact of COVID-19 on Consumer Behaviour
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- Increased data use due to year of working from home and changing shopping habits
- COVID’s impact has caused some to upgrade their internet package and made others think about doing so
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- Figure 34: Consumer behaviour during COVID-19 pandemic, April-December 2020
Use of Broadband Providers
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- BT holds marginal gain over Virgin Media as most popular broadband provider
- TalkTalk’s status as most complained network could see it vulnerable to churn
- TalkTalk’s customer base is more financially vulnerable
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- Figure 35: Broadband supplier, November 2020
- Over two thirds of consumers have been with their broadband provider for more than three years
- Loss aversion can also factor into consumers staying with provider
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- Figure 36: Length of time with broadband provider, November 2020
Broadband Speed and Usage
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- Nearly four in 10 have super or ultrafast broadband connections
- Virgin customers most likely to be accessing ultrafast packages
- Over a quarter don’t know what speed their broadband service is
- Room for growth of faster broadband services
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- Figure 37: Average speed of broadband connection, November 2020
- 16% have over 10 devices running on their broadband connection
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- Figure 38: Number of devices connected to broadband, November 2020
- Multiple device owners have a need for speed
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- Figure 39: Connected personal technology devices, by broadband speed, November 2020
Satisfaction with Broadband Providers
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- The majority are satisfied with their broadband provider
- With baseline stability established, speed is the main battleground
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- Figure 40: Levels of satisfaction with broadband providers, November 2020
- Plusnet has the highest levels of people saying they are dissatisfied with their broadband service
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- Figure 41: Satisfaction, by broadband provider, November 2020
- Among those who are dissatisfied, unreliable service is the biggest complaint
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- Figure 42: Reasons for broadband dissatisfaction, November 2020
Use of Bundled Services
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- Landline and broadband remains the most common bundle
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- Figure 43: Use of bundled services, November 2020
- Standalone broadband services can see further traction
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- Figure 44: Use of bundled services, by provider, November 2020
- Over a third are paying more than £41 a month for communications services
- Further price competition expected for faster connections and additional services
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- Figure 45: Average monthly spend with broadband provider, November 2020
Attitudes towards Broadband and Bundled Communications Services
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- Over half have haggled with their provider to get a better deal on broadband services
- Younger people more likely to be concerned about losing broadband service
- New rules from the regulator could help overcome trepidation in switching
- Bundled services still an effective pull for consumers
- Additional services can create value and lasting relationships with consumers
- Locking consumers in to multiple services, even with a significant discount, can pay off in the long term
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- Figure 46: Attitudes towards broadband and bundled communications services, November 2020
- For some demographics, the option of flexibility is key
- More than half see the appeal of a broadband-switching tool
- Auto tools can help demystify the market and filter choice…
- …and bring more niche players into the market
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- Figure 47: Attitudes towards broadband services, November 2020
Appendix – Data Sources, Abbreviations and Supporting Information
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- Abbreviations
- Consumer research methodology
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