VMO2: UK mobile and broadband prices have dropped 20% since 2017

A study by VMO2 says Brits have some of the cheapest mobile and broadband deals in the world, with household spend on telecoms having dropped by about 20% since 2017.

The report, commissioned by VMO2 and carried out by Assembly Research, claims average monthly household spend on telecoms in the UK has fallen by nearly 20% – or £18 per month – since 2017, whilst consumptions has ‘surged’.

The report claims competition in the UK telecoms market ‘has delivered exceptional value for consumers’ and contrasts the apparent drop in costs with the faster speeds customers enjoy and investments that operators have put into next generation infrastructure over that time which supports it – which it puts at £6 billion each year.

We’re told typical UK prices for fixed and mobile services in the UK are amongst the lowest in Europe, with Britain second only to Spain in terms of the cost of a typical telecoms package and that bills are 95% cheaper than the US, 45% cheaper than Japan, and 16% cheaper than France.

The report makes the point that energy, food, transport and housing have in the meantime experienced heavy inflationary pressure. Citing a forecast that energy bills could have quadrupled before the Energy Price Guarantee was introduced, it says that if telecoms prices had increased at the same rate average monthly mobile and broadband bill would ‘soon reach more than £400, rather than the £77 it stands at today.’

“There is no doubt consumers are receiving exceptional value from our services – over the last decade it’s very clear they’re getting more and using more while paying less,” said Lutz Schüler, Chief Executive Officer at Virgin Media O2. “The continued investment we make in expanding and upgrading networks has unlocked a tidal wave of consumption and heralded an age of unconstrained connectivity.”

Matthew Howett, Founder of Assembly Research added: “There has been a long-held belief that the UK is one of the most competitive and affordable telecoms markets. By collecting robust evidence from credible sources and from countries the UK is most often compared to, we can confidently now say that belief holds true.

“Putting that spend in context relative to other essential outgoings confirms the real value consumers are getting. While that may be of limited comfort to those really feeling the cost of living pinch right now, the ongoing additional support the sector has been providing, particularly since the pandemic, should help see households through the uncertainty we are all navigating.”

So UK telco customers have never had it so good, seems to the ostensive point of all this. Fair enough, but there does seem to be an additional inference from VMO2 here other than to collectively pat itself and its UK operator rivals on the back.

On the one hand it seems to be offering up the fact that these low prices and the high level of competition in the UK market that keeps those prices low is something to celebrate in a world of rising costs. But these comparatively good deals the UK gets is described as framed as ‘UK household spend on telecoms has fallen by almost a fifth since 2017 while data consumption has surged, speeds have increased and more than £6 billion is invested in UK telecoms networks each year’. Which makes this all smack of the arguments many operators have made that its somehow unfair that the costs of updating networks is so high, while other firms are able to run such lucrative businesses because of it.

Contrasting all this with the pressures in recent years that have meant food, transport, housing and particularly energy costs have gone up is a bit slippery as the factors and sectors are just so fundamentally different – but there is a discussion to be had around operator business models and competition dynamics which, for example, didn’t allow for significant price rises for upgrading to 5G contracts.

What is to be done about that is not easy to say – unless telcos want to persist with the argument that big tech should start paying for the infrastructure as well.

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