A third of us have not changed our home phone provider in over 5 years and are likely to be wasting big money as a result

As the credit crunch bites, most of us have made a real effort to reduce our household bills.  The most obvious targets are energy, car and home insurance, mortgages and personal loans.  The slightly more determined amongst us have also no doubt, looked at our digital TV and broadband bills, as there are big savings to bundle the services together. 

But it is the humble home phone line that often gets overlooked, particularly as we all rely increasingly on mobiles for the majority of our calls.  Indeed, recent research by home phone, broadband and digital TV comparison service Simplifydigital.co.uk, shows that a third of households have not changed their home phone provider in over 5 years.  The net result is that the majority of households are sitting on a big potential savings without even knowing it.

Home phone costs consist of the line rental (paid monthly) and the cost of the call plan on top.  There is not much variation in the cost of line rental, which varies from £10.50 to £11.25 per month depending on your home phone supplier.  But there is a huge potential difference in the cost of the calls depending on which call plan you choose from which supplier, relative to where you make the majority of your calls.

Identifying the exact potential cost saving for a household is complex as it is dependent on the household’s unique pattern of calls.  So for simplicity we have grouped households into catagories to determine a likely potential cost saving.

Busy family making regular daytime calls during the week

Let’s assume that the family regularly makes local and national calls during the day, as well as regular calls to mobiles.   

In this example there are big savings to be had by getting a call plan with all inclusive daytime calls, because if you make calls during the day without an inclusive talk plan, you will be paying through the nose.

For example, BT charge 4.5p per minute for daytime calls, so a family spending 20 minutes on the phone per day to landlines will be spending £18 per month on national calls alone. 

If for example they are spending another 20 minutes per day on calls to mobiles (which BT charge at 12p per minute), this would add up to another £50 per month, making a total of £68 per month excluding line rental!  In contrast the pick of the anytime call plans are listed below.

Sky Talk Anytime (£5 per month for Sky TV customers)

This package is very good value and gives you unlimited free national daytime calls, plus free calls to 20 international destinations including France and the US.   And importantly calls to mobiles would be just 9p per minute.  So instead of paying £68 per month, the family would pay a total of £41 per month (excluding line rental) and benefit from the free international calls – making a saving of about £27 per month or £324 per year. 

 TalkTalk UK Anytime

The TalkTalk package is another great value plan.  For £4.49 per month you get free daytime calls (this rises to £5.49 per month after 12 months).  Calls to mobiles are 12p per minute and you also pay for calls to international destinations.  But on this basis you would still expect to save about £186 per year (£15.50 per month)

BT Unlimited Anytime Plan

This plan costs £4.95 per month for free daytime, evening and weekend calls.  Calls to mobile cost 12.5p per minute and BT’s standard international call charges apply.  But by switching to this plan, the family would still save £13 per month or £157 per year.

A major drawback of the BT package is that it ropes you in to a 12 month “renewable contract”  which automatically gets extended to an additional twelve months, after the completion of the initial 12.

Working couple calling in the evening and weekends and overseas

The savings for a family making the majority of their calls in the evenings and at weekends are smaller, but the savings to be had on international calls are potentially very large.

Let’s assume that the couple regularly call France, the US and India.   Again, taking the standard BT rates as a benchmark, BT charge 17p per minute for calls to the US; 21p per minute for calls to France and a whopping 28p per minute for calls to India.  So if the family call abroad for just ½ an hour per week, they are likely to be racking up a bill of around £26 per month on international calls alone.

Sky Talk Anytime (£5 per month for Sky TV customers)

This package would suit the working couple as well as the busy family as it offers free international calls to 20 destinations including France and the US.  Calls to India would be 26p per minute.  So the couple would save about £21 per month or £252 per year on international calls alone. 

Orange Home Phone and Second Line (existing Orange customers)

Existing Orange customers can get a great value home phone and broadband service for just £4.18 per month.   The service gives you free evening and weekend calls on your main phone line, plus the Orange Second Line service included for free.  This internet phone service from Orange allows you to call UK landlines for free at anytime, and make free calls to 30 international destinations. You will need broadband from Orange in order to use Second Line.

The package also offers free calls to Orange mobiles, so if our couple are existing Orange customers it would be an excellent choice.

Skype

The working couple might also consider a VOIP service like Skype.  They offer big opportunities to save, but require a broadband connection (as the calls go over the internet).  Skype offers free calls to other Skype users wherever they are in the world and also offer a package of free calls to domestic landlines anytime for £3.39 per month.  And unlimited calls to landlines in over 40 countries worldwide for £7.99 per month.

In summary, if you have not reviewed your home phone package in a while it is definitely worth digging out the bills, checking what call plan you are on, and seeing if you can save. 

Comparison sites such as the Ofcom accredited Simplifydigital (www.simplifydigital.co.uk) offer an excellent place to start.  Simplifydigital also offer impartial advice free over the phone on 0800 1 388 388.  Their experts will note your exact call behavior and find the best fit package for the biggest saving.

Written by Charlie

Until recently most home phone re-sellers were offering their services having part unbundled the local telephone exchanges.  This means that they can offer a competitive call plan, but the line rental remains with BT. 

This is very important in two key respects.  First BT continue to bill the customer for line rental and hence have a route into the home to try and persuade the customer to “come back to BT”.  And second, psychologically BT remains the “mother brand” in the mind of the customer - it’s clearly their underlying service which the upstart re-seller is hiring to offer their services.

But with full local loop unbundling, the new home phone seller takes over the entire line and can offer a call plan, plus line rental.  BT is therefore completely cut out of the equation with the consumer and has no ongoing billing relationship.  This is a fundamental difference and we think it will herald big changes in the home phone market, with an acceleration of customers away from BT.

Our recent research shows that 33% of people have not changed their home phone supplier in over 5 years, reflecting natural inertia and BT’s central position in home phone consumers’ minds.  And whilst it is true that several companies have been offering the full call plan and line rental package for some time, it is set to increase greatly now that Sky are really getting behind their fully unbundled service; so too are an aggressively expanding TalkTalk, who are soon to acquire Tiscali (who can also offer the fully unbundled service); and Orange are building their fully unbundled network too.

Indeed, Sky are currently writing to their 9 million customers encouraging them to move their line rental over to Sky.  The Sky communications explain:  “We have built a new state-of-the art network which uses Local Loop Unbundling (LLU) to give us end-to-end control of your broadband and phone service, instead of ‘renting’ the connection from another provider”. “We’re using the latest technology to offer you a great experience and to offer you new features in the future, such as managing your voicemail through Sky.com. Carrying voice and internet signals over our own network also means we can offer unbeatable value for money. You don’t have to do a thing - we’re transferring Sky Talk and Sky Broadband customers to our new network automatically, with minimal disruption to your connection. Your account details, including your home phone number, email address and username will all stay the same. Your Sky TV service will not be affected.”

In addition Sky’s recent Sky+ HD campaign offers free line rental for 12 months when you join Sky as a digital TV customer.

So we believe that as these fierce competitors to BT like Sky, TalkTalk and Orange up the ante, and BT is removed from customers’ homes, BT will find it much harder to win back home phone and broadband customers in the coming months and years.

Written by Charlie

TalkTalk released a statement today which estimates that BT customers could save a total of £448m on their home phone bills if they all switched to TalkTalk, the home phone and broadband provider. 

The release coincides with TalkTalk’s announcement that they are introducing free anytime local calls from 1^st May 2009, while 11.8m BT home phone customers are still paying for them.  This is a key move for TalkTalk as seven out of every 10 calls made by TalkTalk customers are to local numbers.

TalkTalk’s research claims that the average BT home phone customer would save  £38 per year by switching from the most similar BT call plan and with 11.8 million BT home phone customers who are currently paying for their local calls, this would in theory create a £448m saving for them over a year.

Wendy Becker, managing director of TalkTalk, said: “We are committed to providing our customers with the best value package on the market – whether that be for their home phone or their broadband. Our new free local calls anytime offer means that 70% of our customers’ UK calls will now be free. We think that’s an unbeatable deal, especially at a time when people are looking to cut their costs wherever they can.”

Whilst the headline savings figure is a little spurious, the move to free local calls is good news for TalkTalk customers and it should more than offset the recent increase in TalkTalk line rental which went up from £10.50 to £11.25 per month.  It will be interesting to see whether the key competitors follow suit.  Tiscali has so many issues at present that it is unlikely to respond at all, but Sky for example will be plotting its competitive response for its popular Sky Talk service which is currently in 1.7 million Sky digital TV homes. 

Overall therefore it is good news for home phone consumers and further reason for the 33% of UK homes who have not switched their home phone provider in the last 5 years to dig out their bills and see if they could make big savings by switching.

From 2^nd June TalkTalk customers will also be able to benefit from free calls to all 0845 and 0870 numbers.

Written by Charlie

Broadband services in the UK are starting to follow the lead of the mobile phone industry, long familiar with the concept of “bolt ons”.

The recent launch of TalkTalk Broadband’s “Boosts” have brought the same flexibility to broadband services in the UK.  And we think it is only a matter of time before competitors follow suit.

TalkTalk offer six different Boosts which allow customers to customize their broadband and home phone services without signing up to additional long term contracts.  The boosts cost £4 per month and allow customers to trade up and down whenever it suits them.   The boosts include: a Speed Boost which temporarily ups your broadband speed to an up to 24 Mb/sec service (if available at your address); a Download Boost which temporarily increases your download limit (if you want to do some serious movies downloading for a short period, for example); and a Half Price Calls to Mobiles Boost on the call plan side.

No other UK broadband or home phone providers offer this sort of flexibility and we think it is a neat approach which other would do well to adopt.  In busy households, broadband and home phone usage is not consistent through the year, and the service reflects this, allowing people to upgrade whenever it suits them.

The key for TalkTalk’s economics is the “stickiness” of the non-contract boosts.  Clearly they would like customers to upgrade and then leave the boost in place for many months.   Time will tell as to whether this actually happens, as the scheme has only been in place since late November last year.  But as customers tend to pay for their boosts by direct debit, the likelihood of them remaining in place for several months is greatly increased.

So we think it’s a smart move by TalkTalk and a service with real customer appeal and we await the response of the other broadband big guns like Sky, Virgin Media, O2, BT, and Tiscali! 

Written by Charlie

The UK’s first triple-play service offering broadband, digital TV and telephone services across a fibre-to-the-home (“FTTH”) broadband network has been launched to the first 286 of 4,200 homes at Wembley City, London, by Velocity1, a joint venture between Quintain Estates & Development plc and Industria Media Ltd.

The new service looks very interesting - Velocity1 is being built into all new homes at Wembley City as they are developed by Quintain, meaning that new residents can activate their phone, digital TV and broadband, with guaranteed speeds from 8mb to 100mb, via a single phone call on the day they move in.

60% of the residents who have moved into the first apartment building, Forum House, have already signed up with Velocity1, with an additional 234 homes scheduled for connection when the second residential building is completed in 2010. Quintain will progressively roll out Velocity1 to its other mixed-use schemes, as well as to those developed by other organisations across the UK.

Ultra high-speed fibre optic cables link each of the homes within Forum House to the Velocity1 data centre, eliminating the need to use an exchange and delivering exceptional broadband speeds and reliability.

Velocity1 offers a number of features including:

• No line rental
• More than 120 digital TV channels, including some premium content and HD channels
• Personal Video Recording (PVR): digital programme recording scheduled to launch in spring 2009
• Ultra-fast broadband, with speeds of 100 megabytes per second available to all customers
• VOIP: phone calls over the same fibre network

The system has also been designed on an ‘open access’ model, with third party service providers able to integrate their own services into the Velocity1 platform.

James Saunders of Quintain comments: “The scale of Quintain’s schemes enables us to embed and operate next generation technology for homes and businesses in a highly cost effective and streamlined manner. This model has a vital role to play in achieving the Government’s objective anticipated within the Digital Britain report of universal delivery of high-speed broadband services and digital television.

There is no doubt that having a FTTH ultra-fast broadband connection will be a great feature for a new home, and will deliver an online experience far superior to any DSL broadband provider. But the interesting thing is that you have to buy it with Velocity1’s entertainment package and it is not clear how appealing the TV content will be and how competitively it will be priced. Many residents may prefer to have the benefit of a 100 Mb/s broadband connection whilst also being able to enjoy a Sky+HD service for example,and this may be tricky as there will not be a BT line into the residence.

Written by Chris

Simplifydigital’s latest research of 2,000 online respondents shows that broadband subscribers in the UK are paying an average of £16.50 per month and broadband and home phone bundle subscribers are paying an average of £26 per month (including line rental) for their services. This is way more than the best value broadband deals that are currently available in the UK.

This in part reflects the proportion of people on premium super fast broadband packages, but more directly reflects the proportion of people on expensive legacy broadband deals.

The best value broadband and home phone deals currently start from around £15 per month (including line rental) for 8 Mb/s services with very good usage caps – compare deals on Simplifydigital from TalkTalk and Tiscali for example.

These broadband and home phone deals deliver annual savings of over £130 versus the average that people are currently paying in the UK.  

The cost of not shopping around for your home services can really stack up

 

So there are big savings for those of us who are prepared to take the plunge and switch providers! But the research shows that, despite paying more for legacy broadband deals, many have not got round to switching broadband providers.

Indeed 45% of UK broadband customers have been with the same broadband provider for 2 years or more, with 15% of customers being with the same broadband provider for 5 years or more! 

So our advice is check what your paying a month for your broadband and home phone services and if it’s more than £15 per month (including line rental) – shop around, because you’re mad not to!

Written by lee

Virgin Media announced today that their digital TV customers will soon be able to access a large amount of ITV content via ITV Player, on top of the BBC iPlayer content that they already receive on demand. 

The agreement will allow Virgin Media’s 3.5 million customers to view over 40 hours of programming from ITV1, 2, 3 and 4 each week. This includes popular shows such as Coronation Street and Emmerdale.  The programmes will all be made available for seven days after being broadcast as part of Virgin Media’s free “Catch up TV” service.

In addition Virgin Media’s viewers will be able to choose from a library of about 500 hours of ITV comedies, documentaries and dramas, to watch at any time on demand.

The deal also allows for a selection of ITV’s High Definition (HD) programming to be available on demand.

The cost of the deal is undisclosed, but is rumored to be very lucrative for ITV and hence expensive for Virgin Media!  Virgin Media is therefore putting its money where its mouth is, in terms of developing its on-demand proposition.  It clearly sees a point of difference between it and Sky which it is keen to develop.

According to Virgin Media, more than half of their TV customers regularly use their on-demand service, with total views of all on demand programmes exceeding 357 million by the end of the first nine months of 2008 and averaging 45 million views each month in the third quarter of last year.

ITV has also done well out of on-demand viewing online with the average number of plays per month more than doubling since the end of the first quarter of 2008. The top three ITV shows in 2008 were Coronation Street, The X Factor and Emmerdale in that order.

However, whilst on-demand viewing is growing rapidly, it remains to be seen if on-demand viewing becomes a criteria important enough for subscribers to switch service providers.  The real attraction for families still resides in premium sports and movies content which Sky excels at.  So we suspect that Sky will be far keener to invest in holding onto the Premiership football rights for example, than investing heavily in trying to match Virgin Media’s on-demand proposition.

To find the best digital TV, broadband or home phone deal for you, call us on 0800 1388 388 or use our online smart search.

Written by lee

Simplifydigital commissioned a YouGov poll earlier this year and found that over one in three adults (39%) are not making the most of the huge money savings that are available if they choose to bundle.  On average £160 could be saved per year from taking the bundling route. Our CEO commented on the findings:

“There are big savings to be had by bundling, but the real trick is choosing the right bundle to match your needs. Until now there has been no place to go for impartial advice as to which one to take, which is exactly what our digital experts specialise in at Simplifydigital. With our help finding the best bundle, we could certainly put money back in people’s pockets.”

For the more savvy 31% who have already opted for the bundle option that includes digital TV, broadband and home phone, over four in five said that the quality of service (87%) and overall costs (82%) had been better or the same from using one service provider.

Worryingly, many people are not doing their research before signing up to digital TV or broadband. Only 24% said they did extensive research before signing up to these services. Ponsonby concluded:

“The falling cost of broadband coupled with ever-increasing competition in the digital TV market means it’s vital that families do their research in order to get the perfect package. The mass of conflicting advertising can make broadband and digital TV seem unnecessarily complicated and confusing, resulting in customers possibly missing out on the ideal service. Our team is able to search through over 530,000 different package options on our database in a matter of minutes, which would take the average person over two years if they took two minutes to review each one.”

The report found 24% of the pay-TV customers surveyed said they were planning on ‘stripping down’ their pay-TV package including sports and movie channels.

According to the research, Freeview has now become a popular choice for cash strapped consumers. The survey found 15% had chosen subscription-free Freeview because of cash concerns. An additional 13% of responders’ said they planned to switch to Freeview within the next year for the same reason.

 

At Simplifydigital, we know that there are great savings to be made simply by finding the right package for you. We’re already helping confused consumers save money every day. To find out how much you could save, give us a call or use our online digital services comparison tool.  

Written by lee