Fight back against rising broadband costs

For the first time since 2006, broadband is getting pricier. It's time to switch and save!

The price of broadband has risen for the first time in five years, according to new research from experts Broadbandchoices.co.uk.

The first rise since 2006

Broadbandchoices.co.uk found that the cost of broadband-only services has leapt by 11% since 2010. This means that the cost of broadband has climbed more than twice as fast as the rise in general living costs of 4.5%, based on the Consumer Prices Index.

Stand-alone broadband now costs an average of £126.49 a year, versus £114.18 in 2010. This is the first increase in broadband pricing since 2006 and, after years of price cuts, could mark the beginning of further price rises.

However, while the cost of broadband has increased, so too have headline broadband speeds. Broadbandchoices.co.uk found that headline speeds have soared by 29% since 2010, from 14Mb to 18Mb.

The steeper cost of surfing

The following table shows the average cost of broadband in the first year for the ten cheapest stand-alone broadband packages:

Notes:

1. The total cost excludes line rental, but includes special offers and discounts, plus any additional charges such as hardware, postage costs and installation fees.

2. These figures are snapshots taken in January of each year.

As you can see, after three years of steep falls, the average cost of cheap, stand-alone broadband has leapt upwards again and is now back over £126 a year, or £10.50 a month.

The above table shows the average of the ten cheapest deals on offer each January. Obviously, if you haven't shopped around in recent years, then you could be paying far, far more than this for your broadband!

Why this is happening

Quite simply, there's not much profit to be had by taking, say, a tenner a month from broadband-only customers.

Instead, companies are urging their customers to switch to bundled deals, which include home telephone and digital TV. Therefore, by pushing up the price of unbundled broadband, providers hope to nudge customers onto packaged deals costing upwards of £30 a month.

In addition, VAT was bumped up from 17.5% to 20% in January, plus higher inflation is driving up costs across the board. Hence, it was almost inevitable that broadband would buck the five-year trend by getting more expensive this year.

Hit back against higher prices

Clearly, the way to fight back against higher costs is to shop around for a better deal. Here are four tips from Broadbandchoices.co.uk:

1. 1.    Haggle: your current broadband provider will be keen to keep your custom. If you can switch contracts without penalty (in other words, after your initial lock-in period has ended), then use this freedom to barter for a better deal. Your provider may offer you lower monthly payments, or a beefed-up package for the same price.

2.    Compare deals in your area: services, packages and costs vary by postcode, plus you can choose from thousands of different combinations of broadband, TV and phone. To get help picking the right package, get a free, impartial and Ofcom accredited comparison wizard do the legwork for you.

1. 3.    Be realistic: pay only for what you really need. For example, if you're into email and light surfing, then a basic 10GB or similar service should be fine. However, heavy users will benefit from signing up to a 20GB+ service with an 'unlimited' usage allowance.
2. 4.    Always sign up online: this often delivers discounts that aren't available through other channels.

Best Buys for broadband-only packages

Here's a list of five table-topping deals for those keen to switch and save:

Source: Broadbandchoices.co.uk

Information correct at 23/05/11. Terms & conditions apply; see ISP sites for full details.

*Subject to fair-usage policy.

**First-year cost does not include line rental.

(See further notes at bottom of article.)

As you can see, there are some terrifically cheap deals for broadband-only services, ranging from £6.49 a month for Plusnet's Value package to an unlimited 20Mb service from Sky for £15 a month.

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Then again, if you want to add digital TV and phone packages to your broadband, you'll probably be better off with a bundle, saving you up to £300 a year.

A final word of warning

When shopping around for a new broadband or bundle provider, you must look beyond the price. It's vital to check both the speeds and customer service offered by different providers, as these vary widely. For example, we have just revealed the unhappiest broadband customers.

Lastly, here's wishing you many hours of fast, reliable, value-for-money browsing!

Further notes for second table:

1. If you live in a low-cost area, the monthly cost is £6.49. If you live outside of these areas, then the monthly cost is £6.49 for the first three months and then £10.79 or £12.99 a month, depending on where you live.

2. Only for Orange mobile customers. You must switch your line rental to Orange for £11.50 per month. If you live outside of the Orange network area, then there is an extra charge of up to £10 per month.

3. Free for the first month, £5.31 for the next two months and then £15.30 thereafter (this offer ends soon).

4. £15 per month within Sky's network area. Sky Connect is available at £17 per month to customers outside Sky's network area.

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