End of contract notifications: How to make broadband savings
End of contract notifications: How to make broadband savings
End of contract notifications are one of the most important changes to broadband regulation in recent times. Knowing what they are – and how best to make use of them – can save people a lot of unnecessary expense.
The end of a broadband contract is a vital time for the consumer. Having been locked in for a period that can legally be as long as up to two years, the expiration provides an opportunity to assess other options and potentially find better value elsewhere. Broadband comparison tools allow for a simple look at both performance and price. From this, customers can make a judgment as to which deal is best for their particular needs.
So far, so good. However, while this all sounds straightforward enough, until February 2020 it was a completely unrealistic ideal. This was due to the common practice among providers of simply not informing consumers when a contract had elapsed. The result? A month-to-month contract automatically ensued, typically at far worse value than could be obtained via a fresh new deal.
Enter end of contract notifications. An innovation of regulatory body Ofcom, the general premise is that broadband providers must notify consumers when the contractual period is up. Not only that, but they also have a responsibility to present their best deals. Additionally, there is an onus upon the provider to clearly state the difference between the contractual rate and month-to-month rate, and to inform the customer of any existing notice period.
This is a huge victory for transparency. Even better, it has a partly retroactive effect – even those who have already unwittingly ended up on a month-to-month contract have to be told about it by their provider, with yearly reminders of the best deals on offer. While not all of these people will choose to switch, the regulations at least place them in a reasonable position to make an informed decision.
The extent of the problem that these changes were brought in to tackle is made clear by the numbers. At the time of the introduction of end of contract notifications, 8.8 million people were on month-to-month broadband contracts following the expiry of their contract. 16% of consumers did not know if they were in contract – this was true of 21% of people over the age of 55. Providers were profiting from consumers being kept in the dark.
How much were they profiting? It is hard to place an exact number on it, but Ofcom figures suggest that the average out-of-contract consumer could save £100 by signing up to a new deal with the same provider. Three million of these customers could actually get faster broadband speeds for less money than they are currently paying.
Some of these millions of people will have already benefited from the end of contract notifications system. However, it is safe to assume that there is still a significant number of people paying over the odds for their broadband. With regulation in place to ensure everybody is made aware when their contract expires, there is now no reason not to take action once a deal comes to an end.
One option available to consumers is the simple route of opting for one of the new deals flagged up by their provider. This at least ensures they do not sleepwalk into paying a ‘loyalty penalty’ – an overpayment as a result of not switching off an existing contract at the point of expiry. It guarantees parity with an equivalent new customer coming to the provider for the first time. This may seem like little more than basic fairness, but it is a significant improvement on the arrangements of the recent past.
It is particularly good news for consumers as the deals available to new customers are likely to be enticing. Almost by definition, they exist to attract new people into taking up a contract – they are therefore likely to consist of special perks and offers, capable of drastically lowering prices. Existing customers getting regulator-assured access to these same deals unlocks major savings.
End of contract notifications can, however, be made even more fruitful for the consumer. With just a little more research and action, the everyday customer may be able to make greater savings than those offered by their existing provider.
The principal limitation to Ofcom’s regulatory intervention is that consumers are still only made aware of deals with their existing provider come the end of the contract. This is fairly inevitable – it is hardly reasonable to expect providers to signpost customers towards deals with rival companies, even in the name of consumer protection. But there is nothing to stop the savvy consumer from shopping around once notified that the contract is ending.
Broadband comparison is nothing new. Nor is it difficult – particularly with the sophisticated tools available today. In fact, almost every broadband customer probably did some form of comparison when they signed up to their very first contract. The end of contract notification should serve as a trigger: it is time to compare different providers again. Savings average £100 just from switching to a new deal with the same provider, and this figure can be expected to jump higher when it comes to switching providers.
Your existing provider tells you the contract is up. A comparison site shows you the best deals. There is simply no reason not to switch and save.
Savings are not the only thing on offer either. A key metric within broadband is the speed of the internet connection, both in terms of downloads and uploads. Ping response times are also important – if they are excessively high, they slow down every request made over the internet. Switching offers an opportunity to improve in all of these areas.
Download speed, simply put, is how long it takes to retrieve data from a server. This is something internet users do every day: it may be streaming a film, listening to music, viewing an image, or any other number of routine activities and tasks. Upload speed is the inverse. It relates to how long it takes to send data to another device or server. Video calls and live online gaming are two common contexts where upload speed may be important, while even something as simple as sending an email also involves an upload of data.
Both download speed and upload speed are measured in megabits per second. This relates to the amount of data which can be sent and received within one second, which serves as an indicator of how the broadband connection will perform over longer periods. Ping, measuring a sequence of send and response between the sender and a remote host, is simply measured in milliseconds.
These measurements may seem somewhat mysterious to some consumers. Given that more than one in five over-55s are not even sure whether they currently have a broadband contract, it may seem unreasonable to expect them to keep abreast of technicalities like ping and megabits per second. As with comparison, though, speed tests have never been easier. The best tests provide all of the relevant data quickly and reliably, presenting them in a simple format. Once customers know their current speeds, they can shop for deals that offer an improvement.
Broadband technology can evolve even over the course of a contract, which adds yet more importance to switching once an existing deal comes to an end. From 2018 to 2019, average broadband speeds jumped from 46.2Mbps to 54.2Mbps, an increase of eight megabits per second (per Ofcom). This demonstrates that what may have been a good broadband package at the start of a contract can quickly become dated. Such an effect is exacerbated for those in 18-month or even 24-month agreements.
This can be seen currently with the development and extension of FTTP (fibre to the premises). Also known as full fibre, it involves infrastructure that runs cables directly to individual homes and businesses. This eliminates the need for sharing connections and can greatly improve speeds. Boris Johnson has pledged FTTP for the whole of the UK by 2025 – as this project progresses, average broadband speeds will surely continue to trend upwards. This has the potential to rapidly make contracts seem dated.
Similarly, coverage within certain areas can change drastically in a short space of time. Internet connectivity is becoming more and more of an essential in modern life, increasing the urgency of extending usable broadband connections to rural areas. As such, consumers may find a hugely different local broadband landscape by the time their contract comes to an end.
End of contract notifications should thus serve as a big red flag to consumers. In the vast majority of cases, it will be well worth switching to a new deal – whether that is with the same provider or a new one. Improvements in both cost and speed can be achieved with minimal time and effort required.