2021
9
UK Bundled Communications Services Market Report 2021
2021-03-13T03:55:04+00:00
OX1042545
2195
135537
[{"name":"Technology","url":"https:\/\/store.mintel.com\/industries\/technology"}]
Report
en_GB
“Broadband connections have provided a vital service to consumers throughout the pandemic, underpinning both work and entertainment activities. As a result, COVID-19 is likely to be a catalyst driving engagement…

UK Bundled Communications Services Market Report 2021

£ 2,195 (Excl.Tax)

Report Summary

Providing the most comprehensive and up-to-date information and analysis of the UK Broadband and Bundled Communication market, including the behaviours, preferences and habits of the consumer.

The demand and reliance on home broadband massively increased during the COVID-19 lockdowns throughout 2020 and into 2021, with the huge shift towards working from home. While the levels of satisfaction with broadband providers remains high, financial pressures from the pandemic have also seen falling revenues in calls and pay-TV as people cut unnecessary spending.

With only 4% of broadband users being dissatisfied with their service, satisfaction levels remain incredibly high. While this means that companies have very little to do to help retain these levels, it also indicates that many users are cautious about switching. 43% of users say that it’s better to stick with what you know, with 37% worried about potential outages and disruption caused by switching.

This report covers the current situation of the broadband and bundled communication industry, as well as the predictions coming out of the pandemic. With auto-switching services already popular with insurance and utilities markets, these tools could provide useful innovation to help customers switch the cheaper deals with equivalent services.

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 and investments in satellite and Gigabit broadband.
  • Key advertising activity, including top campaigns by providers in the broadband and bundled communications market.
  • Consumer use of key broadband suppliers and levels of satisfaction with them.
  • Consumer take-up of bundled communications services and attitudes towards broadband and bundled communications services.

Covered in this report

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

Expert analysis from a specialist in the field

Written by Joe Birch, a leading analyst in the Technology sector, his extensive knowledge delivers in-depth commentary and analysis to highlight current trends and add expert context to the numbers.

Broadband connections have provided a vital service to consumers throughout the pandemic, underpinning both work and entertainment activities. As a result, COVID-19 is likely to be a catalyst driving engagement with their broadband service and some will look to future-proof their connections by upgrading to contracts with faster speeds. Despite a significant rise in data use, revenues for voice and mobile calls are on a downward trend and pay-tv contracts suffered in 2020 due to suspension of live sport.

Joe Birch
Consumer Technology Analyst

Table of Contents

  1. Overview

      • Key issues covered in this Report
        • COVID-19: market context
          • Impact of the January lockdown and the vaccination rollout
            • Economic and other assumptions
              • Products covered in this Report
              • Executive Summary

                  • Impact of COVID-19 on broadband and bundled communications category
                    • 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
                            • 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
                                • 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
                                        • 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
                                          • Figure 5: Average speed of broadband connection, November 2020
                                        • 16% have 10 or more devices running on their broadband connection
                                          • Figure 6: Number of devices connected to broadband, November 2020
                                        • The majority are satisfied with their broadband provider
                                          • Figure 7: Levels of satisfaction with broadband providers, November 2020
                                        • Landline and broadband remains the most common bundle
                                          • Figure 8: Use of bundled services, November 2020
                                        • Over a third are paying more than £41 a month for communications services
                                          • 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
                                          • Figure 10: Attitudes towards broadband and bundled communications services, November 2020
                                        • More than half see the appeal of a broadband-switching tool
                                          • Figure 11: Attitudes towards broadband services, November 2020
                                      • Issues and Insights

                                        • 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

                                                    • 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

                                                            • Downward trend of market value to continue despite consumers’ reliance on broadband connections
                                                              • 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
                                                                      • 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)
                                                                      • Figure 15: Fixed telecoms and TV subscription revenues, 2015-20
                                                                    • Market drivers and assumptions
                                                                      • 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

                                                                        • Impact of the January 2021 lockdown
                                                                          • One in five households suffering from affordability problems in 2020
                                                                            • 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
                                                                                • 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
                                                                                • 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
                                                                                  • Figure 20: Residential gigabit-capable and full-fibre coverage, UK, 2020
                                                                              • Companies and Brands – Key Takeaways

                                                                                • 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

                                                                                        • 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
                                                                                              • 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
                                                                                                • Figure 22: UK household TV platforms, Q3 2020 and Q4 2019
                                                                                            • Launch Activity and Innovation

                                                                                              • 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

                                                                                                                  • BT urges consumers not to be with the wrong provider
                                                                                                                    • 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
                                                                                                                        • Figure 24: Top 10 telecoms advertising campaigns, by product and channel, 2020
                                                                                                                      • Nielsen Ad Intel coverage
                                                                                                                      • Brand Research

                                                                                                                          • Brand map
                                                                                                                            • Figure 25: Attitudes towards and usage of selected brands, December 2020
                                                                                                                          • Key brand metrics
                                                                                                                            • Figure 26: Key metrics for selected brands, December 2020
                                                                                                                          • Brand attitudes: Sky Broadband is the most recommended brand out of all providers
                                                                                                                            • Figure 27: Attitudes, by brand, December 2020
                                                                                                                          • Brand personality: Virgin Media seen as the most ‘exclusive’ of brands
                                                                                                                            • Figure 28: Brand personality – Macro image, December 2020
                                                                                                                          • BT seen as the most reliable
                                                                                                                            • Figure 29: Brand personality – Micro image, December 2020
                                                                                                                          • Brand analysis
                                                                                                                            • Sky Broadband performs well across all brand metrics
                                                                                                                              • Figure 30: User profile of Sky Broadband, December 2020
                                                                                                                            • Nearly two thirds who have ever used Virgin Media would give a positive endorsement
                                                                                                                              • Figure 31: User profile of Virgin Media, December 2020
                                                                                                                            • BT has the highest proportion of consumers who have ever used the brand
                                                                                                                              • Figure 32: User profile of BT, December 2020
                                                                                                                            • Vodafone seen as a “flexible” and “approachable” brand
                                                                                                                              • Figure 33: User profile of Vodafone, December 2020
                                                                                                                          • The Consumer – Key Takeaways

                                                                                                                            • 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

                                                                                                                                            • 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
                                                                                                                                                  • Figure 34: Consumer behaviour during COVID-19 pandemic, April-December 2020
                                                                                                                                              • Use of Broadband Providers

                                                                                                                                                • 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
                                                                                                                                                      • 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
                                                                                                                                                        • Figure 36: Length of time with broadband provider, November 2020
                                                                                                                                                    • Broadband Speed and Usage

                                                                                                                                                      • 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
                                                                                                                                                              • Figure 37: Average speed of broadband connection, November 2020
                                                                                                                                                            • 16% have over 10 devices running on their broadband connection
                                                                                                                                                              • Figure 38: Number of devices connected to broadband, November 2020
                                                                                                                                                            • Multiple device owners have a need for speed
                                                                                                                                                              • Figure 39: Connected personal technology devices, by broadband speed, November 2020
                                                                                                                                                          • Satisfaction with Broadband Providers

                                                                                                                                                            • The majority are satisfied with their broadband provider
                                                                                                                                                              • With baseline stability established, speed is the main battleground
                                                                                                                                                                • 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
                                                                                                                                                                • Figure 41: Satisfaction, by broadband provider, November 2020
                                                                                                                                                              • Among those who are dissatisfied, unreliable service is the biggest complaint
                                                                                                                                                                • Figure 42: Reasons for broadband dissatisfaction, November 2020
                                                                                                                                                            • Use of Bundled Services

                                                                                                                                                              • Landline and broadband remains the most common bundle
                                                                                                                                                                • Figure 43: Use of bundled services, November 2020
                                                                                                                                                              • Standalone broadband services can see further traction
                                                                                                                                                                • 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
                                                                                                                                                                  • Figure 45: Average monthly spend with broadband provider, November 2020
                                                                                                                                                              • Attitudes towards Broadband and Bundled Communications Services

                                                                                                                                                                • 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
                                                                                                                                                                            • 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
                                                                                                                                                                                  • Figure 47: Attitudes towards broadband services, November 2020
                                                                                                                                                                              • Appendix – Data Sources, Abbreviations and Supporting Information

                                                                                                                                                                                  • Abbreviations
                                                                                                                                                                                    • Consumer research methodology

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