Ofcom warns telecoms firms to do more to support people in financial difficulty
Ofcom has warned telecoms firms they must do more to help people in financial difficulty or face “interventions” from the regulator.
New research shows that many people on low incomes are struggling to afford internet access and not all of them are receiving support from their supplier, Ofcom said.
Average “new customer” prices for superfast broadband and landline bundles last year were nearly 20% cheaper in real terms than in 2015, while the average amount of broadband data households used increased by 342% over that time, and average download speeds rose by 178%.
The average cost of mobile services in 2020 was also more than 20% cheaper in real terms than in 2015, while people used 369% more data.
However, Ofcom said around two million households still struggled to pay their internet bill.
BT, Community Fibre, Hyperoptic, KCOM, Virgin Media and VOXI have all introduced low-cost tariffs for people on benefits, or improved their existing ones, making them available for between £10 and £20 a month, saving low-income households more than £200 a year on average.
Despite this, take-up of these targeted tariffs has been low, with only around 40,000 households signed up.
This equates to around 0.15% of all UK homes, which is only 1% of those on out-of-work benefits.
The study also found that 2% of broadband customers and 3% of mobile customers are in arrears, while 0.1% of broadband customers and 0.2% of mobile customers are disconnected by their provider every month.
Between January 2020 and January 2021, total debt among broadband and mobile customers increased from £475 million to £550 million.
Ofcom warned that many providers still did not offer social tariffs, and those that did needed to improve take-up.
Providers are not currently required to offer social tariffs, and Ofcom said it would be for the Government to determine whether a formal review of social tariffs was needed.
But it added that if the telecoms industry “does not take sufficient action to address our concerns, we think there would be a strong case for exploring whether mandatory social tariffs would be necessary to fill the gaps in support, alongside other potential options”.
It added: “So, we are considering whether the protections in place for customers in debt or struggling to pay should be strengthened. We have invited all interested parties to share their views with us on this.”
Lindsey Fussell, Ofcom’s networks and communications group director, said: “Many of us take being able to get online and use a mobile phone for granted, but if you’re on a low income or have fallen on hard times, being able to pay for these vital services can be really tough.
“We’re concerned that many households on the lowest incomes are struggling to stay on top of their bills and providers need to take action to make sure these customers get the help they need.”
Matt Upton, director of policy at Citizens Advice, said: “The fact that so many providers still aren’t taking responsibility for protecting lower income customers shows just how precarious it can be to rely on voluntary arrangements and goodwill.
“Ofcom are right to say things aren’t happening quick enough. If we don’t see action soon, the Government needs to get involved.”