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Free broadband helps lower consumer spending

Ofcom’s annual communications report shows lower costs and higher usage of communications services.

Increased competition in bundled services has contributed to lower costs for consumers across many telecoms services.  Many operators now offer a combination of services that can include Broadband, Telephone, TV or Mobile services.

The number of consumers taking out a bundled service was up 30 percent over 12 months.  Annual household spend averaged £92.65 per month in 2006, compared to £94.03 in 2005.

Investment in LLU (Local Loop Unbundling) from service providers also helped to lower costs.  The LLU process involves operators installing their own equipment in exchanges to offer services direct to consumers rather than use a wholesale product from BT.  LLU providers can offer lower prices as a result.  The proportion of properties connected to this type of service increased from 3% in March 2006 to 9% in March 2007.

Generally, Ofcom says average broadband speeds have increased for consumers.  Whilst the maximum advertised speed of broadband services have doubled, the average blended headline speed was 4.6Mbps, compared to 3.6Mbps to the previous year.  This was helped by ongoing investment in networks on BT and cable.

Actual broadband speeds experienced can often be considerably lower.  Factors such as distance to the local exchange, line quality and contention (number of simultaneous users on the same bandwidth) determine the kind of speeds available.

Ofcom says that headline speeds will continue to rise during the next year with continued investment and upgrading of networks.

By April 2007, 53% of UK households had a broadband connection.

View the full Ofcom communications report.