Ofcom to publish provider take-up of social tariffs

Ofcom has updated their action plan to support customers of broadband and mobile providers during the cost of living crisis.

Access to affordable broadband is one of the main points raised, with the regulator increasing pressure on providers to improve the availability and awareness of social tariffs.

Ofcom also plan to publish take-up of social tariffs by provider for the first time later in December 2023.

Credit: Ralf Geithe/Shutterstock.com

Availability of social tariffs

Social tariffs are now available to 85% of broadband customers, yet Ofcom research has also found only 9% of eligible customers are aware of them.

The Chief Executive of Ofcom, Dame Melanie Dawes, has written to providers reminding them of recommendations published in the latest Affordability report, aimed at improving awareness.

The regulator wants providers to:

• Use their own communications to raise awareness of social tariffs, for example in end of contract notifications and on social media
• Fully brief customer services teams so they suggest social tariffs to customers struggling with their bill or who are financially vulnerable
• Work closely with other organisations, like charities and local authorities who are already engaging with those most in need of help

In addition, Ofcom also want providers to improve information on their website, including:

• Make social tariffs more accessible on their website
• Make social tariff information easy to find in site searches
• Clearly sign post social tariffs, especially on pages aimed at vulnerable customers and those struggling with their bill
• Clearly describe the benefits of social tariffs, such as no mid-contract price rises and the ability to switch to the deals without early penalties

Social tariff take-up

Social tariff take-up overall is still at just 5.1% of eligible households, with only 220,000 out of 4.3 million households having taken up an affordable tariff.

Ofcom have named and shamed TalkTalk and O2 as two providers yet to offer a social tariff to their existing customers, and say if they don't provide one they should at least waive early cancellation fees for customers who want to move to a rival social tariff.

Customers of Plusnet and EE broadband can already do this if they move to BT's Home Essential plan, as they're both retail providers owned by the BT Group.

Yet, TalkTalk and O2 mobile customers don't have a partner firm to switch to, meaning they could have customers struggling to afford a contract they can't leave without incurring further costs.

Ofcom are also planning to publish the take-up figures of social tariffs by individual provider in their next affordability report due in December 2023, with the aim of highlighting those with the lowest take-up figures.

Sustainability

However, we already know BT shoulder the lion's share of social tariff take-up, with 85% of households on a social tariff with BT.

In November 2022, Mark Allera, Chief Executive of BT, repeated calls to the Government to provide public funding for social tariffs, with the market-led approach considered to be "unsustainable" considering the take-up levels the Government wants to achieve.

It's a position echoed by Openreach reseller Vodafone, who offer one of the cheapest social tariffs on the market, priced below cost, as they've raised issue that Openreach don't offer a wholesale social tariff, something that makes their social tariff's pricing level unsustainable.

Yet, Ofcom research into affordability has also found only 11% of households in receipt of means-tested benefits that would be eligible for a social tariff are struggling to afford their broadband bill.

It's worth considering then that market competition has generally made broadband a cheap consumer service, with a range of low-cost budget options available across the UK.

For example, it's possible to get 63Mb superfast fibre for as little as £21 per month, yet BT's equivalent speed Home Essentials tariff costs just £1 less per month at £20.

It's questionable then to expect a market-led approach to social tariffs to provide affordable connections to those most at risk of disconnecting, when a broader, publicly funded, solution could offer a more consistent and lower priced means of access.