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Fibre builders keep building, but customers can’t pay

Consumers in the UK are struggling to pay for Internet access, according to a new study shared by London fibre builder Community Fibre.

Given the economic pressures in the UK at present, that conclusion is hardly surprising. And if you were feeling cynical you could argue that the data is a thinly-veiled excuse for the operator to promote its own lower-cost fibre broadband plans.

But there is an important point in here too: if pressure on consumers’ wallets is causing them to rethink broadband packages and the like, then surely this is something the UK’s myriad fibre builders should be taking into account.

The UK’s fibre journey is well documented. Essentially, Openreach dragged its heels on rolling out fibre for a while, leaving an opportunity for a raft of smaller network builders to spring up and start laying fibre. This kicked the incumbent – and the likes of Virgin Media – into action and now rollout is happening apace. Investors are still flocking to the market, attracted by the long-term, predictable returns of network infrastructure; just days ago CityFibre announced it has raised a further £4.9 billion to finance its network rollout, for example. And with home-based work and entertainment having increased significantly due to the Covid-19 pandemic, fibre broadband uptake is on the rise.

Proponents of high-speed broadband love sharing statistics to demonstrate how important the service has become to consumers, and Community Fibre is no exception; it claims that 33% of Brits would rather cut back on fuel usage than broadband to save money. Admittedly, that number could well have been impacted by the recent hike in fuel costs, but the message remains: people want and need decent Internet access.

Despite that, the operator says that 20% of people cannot afford to be online.

It’s not wholly clear how it arrived at that figure; there could be some creative licence happening here. Apparently, its nationwide survey of 1,500 adults living in the UK showed that 17% regularly struggle to keep up with their broadband payments, while 29% said they will have no choice but to cut back on data to save money. While that’s not strictly the same as “cannot afford to,” these are clearly difficult times for many people in the UK.

And it’s not too much of a stretch to suggest that the rising cost of living will have an impact on the amount people are willing and able to spend on broadband. Cutting out OTT services like TV packages could well come before cutting the cord altogether, but we will likely find consumers looking for lower-cost basic plans. That’s something fibre network providers will need to keep an eye on, particularly in areas of overbuild, which increasingly exist in the UK now as companies race to get cable into the ground.

In some areas of London, for example, people have two or more fibre networks to choose from. That may or may not (yet) be the case for Community Fibre, which has deployed network in parts of 29 London boroughs. But the company is certainly seeking to compete on price, using the survey to talk up the savings its claims customers could make by selecting its basic full fibre plan compared with certain packages it has chosen from BT, Sky and Virgin Media.

Broadband provision has always been a competitive market, with consumers increasingly wanting more speed for the same or lower outlay. With fibre becoming more widespread and customers having less spending power, the high-speed broadband market looks set to become more so.

 

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