2022
9
UK Broadband and Bundled Communications Services Market Report 2022
2022-02-22T03:12:37+00:00
OX1100809
2195
148140
[{"name":"Technology","url":"https:\/\/store.mintel.com\/industries\/technology"}]
Report
en_GB
“COVID-19 has prompted some consumers to upgrade their broadband to faster speeds to cope with the increased demands of working, schooling and spending more leisure time at home. However, there…

UK Broadband and Bundled Communications Services Market Report 2022

£ 2,195 (Excl.Tax)

Report Summary

The UK Broadband and Bundled Communications Services report identifies consumer attitudes towards top campaigns by providers, key driver analysis, and brand research in the UK. This market report covers the market size, market forecast, market segmentation and industry trends for the Broadband and Bundled Communications Services market in the UK.

Current Market Landscape

There is evidence that COVID-19 has been a catalyst for consumers to boost internet performance to handle the increased demands of spending more time working and relaxing at home.

  • 25% of consumers have been with their broadband provider for 5-10 years, and a further 21% have been with them for over 11 years.
  • 32% of broadband users have had their broadband contract for less than two years.
  • 57% of broadband users say they think it is worth paying extra to have the fastest broadband speed available, a figure that rises to 78% of buyers in households with incomes over £75,000.

Larger providers, such as BT and Virgin, have the longest-term relationships with consumers, which suggests significant customer inertia in the market. Over a third of users who have had their broadband contract for less than two years, and of those say they upgraded their services at least partly as a result the COVID-19 pandemic.

Future Market Trends in Broadband and Bundled Communications Services

With broadband providers eager to promote newer, faster networks, such as gigabit-capable and fullfibre speeds, there is a tendency to rely on technical terminology to make an impression. However, brands need to simplify their terminology and language to avoid alienating consumers, increasing engagement across less tech-savvy segments of the population.

The rollout of next-generation networks will allow providers to promote better, faster connections and sell a future-proofed connected lifestyle to consumers.

Read on to discover more details or take a look at all of our UK Technology and Telecoms market research

 

Quickly understand

  • The impact of COVID-19 on the broadband and bundled communications services market and on consumer behaviour.
  • Market size and forecast of the broadband and bundled communications market.
  • Innovations of companies operating in the market, including new product launches.
  • Key advertising activity, including top campaigns by providers in the broadband and bundled communications market.
  • Consumer use of key broadband suppliers, length of time with provider, key driver analysis of satisfaction with broadband providers.
  • Attitudes towards broadband and bundled communications services.
  • Brand research of four major broadband brands operating in the market.

Covered in this report

Brands: BT, Virgin Media, Sky, TalkTalk, EE, Plusnet, Vodafone, NOW Broadband, John Lewis, Zen, Post Office, SSE, Hyperoptic, Shell Energy, Onestream, Origin, Pop Telecom, O2, Sky UK, Compare The Market.

Expert analysis from a specialist in the field

This report, written by Joe Birch, a leading analyst in the Technology sector, delivers in-depth commentary and analysis to highlight current trends and add expert context to the numbers.

COVID-19 has prompted some consumers to upgrade their broadband to faster speeds to cope with the increased demands of working, schooling and spending more leisure time at home. However, there is significant headroom for growth of full fibre and gigabit take up. Providers need to promote the potential benefits to consumers’ digital lives for both work and entertainment while avoiding the overuse of technical terminology that can confuse and alienate some consumers.

Joe Birch
Consumer Technology Analyst

Table of Contents

  1. Overview

    • Key issues covered in this Report
    • COVID-19: market context
    • Economic and other assumptions
    • Products covered in this Report
  2. Executive Summary

    • COVID-19 boosts voice and data usage, but revenues see only incremental increase
      • Figure 1: Short, medium and long-term impact of COVID-19 on broadband and bundled communications 2021
    • The market
    • Market size and forecast
    • Broadband prices fall for more expensive contracts in 2020
    • Small uptick in revenues in 2020 unlikely to be sustainable
      • Figure 2: Market size for broadband and bundled communications 2016-26
    • Despite a challenging economic picture, consumer sentiment looks resolute
    • Full-fibre and gigabit-capable broadband coverage is gathering pace along with 5G rollout
    • Companies and brands
    • O2 and Virgin Media merge in UK’s largest ever telecoms deal
    • The consumer
    • Providers share of contracts relatively static since 2020
      • Figure 3: Broadband supplier, 2020, 2021
    • Long term loyalty to broadband providers still commonplace
      • Figure 4: Length of time with broadband provider, 2020, 2021
    • Evidence of consumers moving to higher speed broadband packages
    • Landline still the most popular product to bundle with a Broadband contract
      • Figure 5: Take up of other services from broadband provider, 2020, 2021
    • Broadband providers have high levels of satisfaction with their providers
      • Figure 6: Satisfaction levels with current broadband provider, 2021
    • COVID-19 has been a catalyst for some consumers to upgrade
    • Providers are well placed to take advantage of bundles
      • Figure 7: Attitudes towards broadband and bundled communications, 2021
  3. Issues and Insights

    • Build product choice around lifestyles rather than technical specifications
    • Sell the future-proofed connected lifestyle, not the broadband speed to resonate with consumers
    • Let’s get ready to bundle, as big telecom hitters join forces
  4. Market Size and Performance

    • COVID-19 boosts voice and data usage but revenues see only incremental increase
      • Figure 8: Short, medium and long-term impact of COVID-19 on broadband and bundled communications 2021
    • Increased usage of voice minutes in 2020 arrests long term decline in use of fixed voice
    • Broadband prices fall for more expensive contracts in 2020
    • Evidence that consumers are moving to higher speed internet packages
    • Pay-TV recovers some of the ground lost during sport cancellations
      • Figure 9: Market size for broadband and bundled communications, 2016-21
  5. Market Forecast

    • Small uptick in revenues in 2020 unlikely to be sustainable
    • Price caps and drift away from fixed voice to digital alternative will see revenues come down
    • Broadband price rises in 2022 to be offset in part by increased shopping-around behaviour
    • Longer-term broadband pricing on a downward trend despite rollout of ultrafast packages
    • Pressure on pay-TV unlikely to let up, but revenues could see a boost through streaming and hardware tie-ups
      • Figure 10: Market forecast for broadband and bundled communications, 2021-26
    • Market drivers and assumptions
      • Figure 11: Key drivers affecting Mintel’s market forecast, 2015-26
    • Forecast methodology
  6. Market Drivers

    • GDP should reach pre-pandemic levels by the end of Q1 2022…
    • …but the post-COVID bounce-back will be short-term
    • Consumers’ financial wellbeing has slipped from its recent high point…
      • Figure 12: Household financial wellbeing index, 2016-21
    • …and concerns over inflation are coming to the fore
      • Figure 13: Consumer concerns about household finances, 2021
    • Summary of key economic data, 2020-26
      • Figure 14: Key economic data, 2020-26
    • Despite financial pressures, consumers are upbeat about their financial prospects for 2022
      • Figure 15: Trends in consumer sentiment, 2016-21
    • Hybrid working will increase reliance on home broadband connections
      • Figure 16: Working from home expectations, post-pandemic, 2021
    • “One Touch Switch” announced to help easier switching between broadband providers
    • 5G rollout is expanding
    • Investment in smart home devices will continue apace in 2022
      • Figure 17: Interest in buying connected home devices, 2021
    • Rise of gaming will power data use and drive take up of faster packages
      • Figure 18: Time spent gaming compared to last year, 2021
    • Average median speeds were boosted during the pandemic
      • Figure 19: Median average broadband download speeds, 2017 to March 2021
  7. Market Share

    • Ongoing fragmentation erodes the dominance of the big players
      • Figure 20: Fixed broadband market share, 2013-20
  8. Launch Activity and Innovation

    • O2 and Virgin Media merge in UK’s largest ever telecoms deal
    • BT launches its BT Halo 3+ with a promise of providing “unbreakable” wi-fi
    • BT announces revamp of BT TV with new wi-fi connected set-top box and inclusion of Netflix
    • TalkTalk launches Future Fibre 1Gbps home wi-fi package…
    • …and launches free gaming cross city battle to showcase fibre’s abilities
    • Sky launches new Sky Glass TV, that streams content over broadband connection
    • Hyperoptic undercut rivals in FTTP offer
  9. Advertising and Marketing Activity

    • Increase in spend on advertising broadband packages in 2021
      • Figure 21: Total spend on 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, 2017-21
    • BT leads on spending
      • Figure 22: Top Highest spending advertisers on TV for home broadband, home broadband & landline, home broadband & landline & TV, and mobile and fixed-line services, 2021
    • Sky goes big with the Minions
      • Figure 23: Sky Broadband Minions OOH poster, London 2021
    • Virgin Media TV short focuses on broadband as the platform to connect people through music
      • Figure 24: Highest spending advertisers on TV for home broadband, home broadband & landline, home broadband & landline & TV and mobile and fixed-line services, 2021
    • Nielsen Ad Intel coverage
  10. Brand Research

    • Brand map
      • Figure 25: Attitudes towards and usage of selected brands, 2022
    • Key brand metrics
      • Figure 26: Key metrics for selected brands, 2022
    • Brand attitudes: BT scores highly on trust and customer service
      • Figure 27: Attitudes, by brand, 2022
    • Brand personality: Sky Broadband is seen as exclusive
      • Figure 28: Brand personality – macro image, 2022
    • Virgin is seen as a ‘cool’ brand
      • Figure 29: Brand personality – micro image, 2022
    • Brand analysis
    • BT fosters positive brand perceptions via its focus on customer service and tech expertise
    • Virgin can’t rely on just being a ‘cool’ brand
    • Sky Broadband stands out on a number of key brand attributes
    • TalkTalk brand struggles to elicit brand commitment
  11. Use of Broadband Providers

    • Providers share of contracts relatively static since 2020
      • Figure 30: Broadband supplier, 2020, 2021
    • BT brands cover all the bases
      • Figure 31: Customer profiles of the leading broadband suppliers, 2021
  12. Time with Current Broadband Provider

    • Focus on future-proofing to overcome inertia
    • Upload speeds can be a differentiator for providers who can target the creative industries
      • Figure 32: Length of time with broadband provider, 2020, 2021
    • Market leaders have the longest established consumer relationships
      • Figure 33: Length of time with current broadband provider, by broadband provider, 2021
  13. Broadband Speed and Usage

    • Consumers are moving to higher speed broadband packages
    • Older generations stick to slower speeds
    • Switchers access higher speeds
      • Figure 34: Average speed of broadband connection, 2020, 2021
    • Home workers are prime targets for upgrading speeds
      • Figure 35: Average speed of broadband connection by working status, 2021
    • Reduce confusion by making broadband speeds more relatable
    • EE leads the way in full-fibre/gigabit take up
      • Figure 36: Average speed of broadband connection by broadband supplier, 2021
  14. Bundled Contracts

    • Mobile and broadband bundles increase
      • Figure 37: Take up of other services from broadband provider, 2020, 2021
    • Broadband and mobile bundles could become next battlefront for providers
      • Figure 38: Bundles taken with current broadband provider, 2020, 2021
    • A new era of mergers and partnerships will flesh out brands’ communications offerings
      • Figure 39: Additional take-up of bundled services by broadband provider, 2021
  15. Satisfaction with Current Broadband Provider

    • Growing ambivalence towards broadband providers
    • Cost of living crisis could lead to increased dissatisfaction
      • Figure 40: Satisfaction levels with current broadband provider, 2021
    • Prioritise the customer experience when things go wrong
    • ISPs need to push benefits of home hubs and mesh systems to maximise consumers’ satisfaction with service
      • Figure 41: Overall satisfaction with broadband provider, 2021, 2020
  16. Key Driver Analysis

    • Smaller providers well positioned to meet key needs of consumers from a broadband service
    • Make it easier to bundle up
      • Figure 42: Key drivers of overall satisfaction with current broadband provider, 2021
    • Key driver analysis – Satisfaction with Broadband Providers
      • Figure 43: Overall satisfaction with current broadband provider – Key driver output, 2021
  17. Attitudes towards Broadband and Bundled Communications

    • COVID-19 has been a catalyst for some consumers to upgrade
      • Figure 44: Attitudes towards broadband and bundled communications, 2021
    • Providers are well placed to take advantage of bundles
      • Figure 45: Interest in adding a mobile subscription by broadband provider, 2021
    • ISPs must provide a relatable case for upgrading to FTTP and gigabit speeds
      • Figure 46: Attitudes towards broadband and bundled communications, 2021
  18. Appendix – Data Sources, Abbreviations and Supporting Information

    • Abbreviations
    • Consumer research methodology
  19. Appendix: Forecast Methodology

    • Market forecast and prediction intervals
      • Figure 47: Lower bound, central and upper bound forecast for broadband and bundled communications, 2021-26
    • Market drivers and assumptions
      • Figure 48: Key drivers affecting Mintel’s market forecast, 2021-26
    • Forecast methodology
  20. Appendix: Key Driver Analysis

    • Methodology
    • Interpretation of results
      • Figure 49: Overall satisfaction with current broadband provider – Key driver output, December 2021
      • Figure 50: Satisfaction with current broadband provider, December 2021

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