Regular calls for telecoms firms to help customers struggling with bills

New Ofcom data has found that around two million households are struggling to afford internet access.

The research shows that many people on low incomes are struggling to pay, and not all are getting the support they need from telecoms companies and that there is considerable variation in the support available for customers who may be in debt or struggling to pay their bills.

Ofcom says that many people’s finances have changed significantly over the last year, with some facing particular challenges. Since the coronavirus pandemic began, the regulator has collected new information on the affordability of communications services in the UK, with research and information collected from providers on customer debt, disconnection and pricing.

Ofcom has warned telecoms firms they need to do more to support people in financial difficulty, or they could face new interventions to better protect customers.

New data we have collected on the affordability of communications services shows that around two million households struggle to afford internet access. Since the regulators last report on affordability in December, BT, Community Fibre, Hyperoptic, KCOM, Virgin Media and VOXI have all introduced low-cost tariffs for people on benefits or improved their existing ones. These are available for between £10 and £20 a month and can save low-income households more than £200 a year on average.2

However, the take-up of these targeted tariffs has been low, with only around 40,000 households signed up. This represents around 0.15% of all UK homes, which is only 1% of those in receipt of out-of-work benefits.

The latest research also shows 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 £475m to £550m.

Although six providers offer targeted affordable ‘social’ tariffs for customers on low incomes, many still do not, and providers of the ones that are available need to improve how they promote them as take-up is low. Providers are not currently required to offer social tariffs and it would be for the UK Government to determine whether a formal review of social tariffs should be carried out.4

Ofcom says 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.

There is also considerable variation in how different companies treat customers who may be in debt or struggling to pay their bills. This could cause some people to receive less support than others, depending on who their provider is.

Ofcom says it is also considering whether the protections in place for customers in debt or struggling to pay should be strengthened.

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.”

Commenting on the report Matt Upton, Director of Policy at Citizens Advice, said “Broadband is essential for the way we live today. People struggling to afford it shouldn’t be penalised simply because their provider isn’t one of the few firms offering a cheaper tariff.cThe pandemic exacerbated this problem, but in reality, it had already been dragging on for far too long.”

“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.”

Total debt of broadband and mobile customers: