The real cost of broadband

Steadily increasing line rental charges in the UK have been masked by falling prices for broadband services, leaving many consumers confused about what they will actually end up paying each month.

With many providers now offering 'free' broadband deals, the average monthly cost has decreased by 73% since 2009*. However, the average line rental price has risen by 56%** over the same period. At face value, the rapid increase in line rental prices may seem alarming - especially as this cost usually appears in the small print and often goes unnoticed by the customer until they start paying for it. In reality, this is not the case.

Once broadband and line rental prices have been combined, the total average cost currently sits at £19.84 per month - ever-so slightly less than the £20.19 average in 2009. This is in fact lower than the inflation rate which would have seen the cost rise to £24.19***.

Broadband-only packages are few and far between - and those that are available can often work out more expensive than an equivalent package with line rental. Whilst we understand that sentiment towards line rental charges is poor, it needs to be taken into consideration with the other elements of the package to understand what it means to customers in real terms.

We have taken a look at some of the most popular providers available to see what price they advertise, the total cost once line rental is added and what a person will pay if they stick with the same contact for more than 12 months.

The best advice we can give consumers is to carefully check the overall price, including line rental before choosing the package they want. Comparison sites, including broadbandchoices, let you do this, and it will minimise the risk of encountering unexpected costs on their monthly bills.

A final and important point to note; if consumers have not switched providers for more than two years, they may be paying considerably more each month than they need to. It is possible that they could be paying the same rate for broadband that they originally agreed to as well as the current, elevated line rental price. For this reason it's wise to compare providers annually / at the end of a contract.

More transparent pricing - perhaps even a single headline price point that captures all elements such as line rental and broadband in one go - would likely help consumers understand how much they are paying, and what they would pay if they were to switch, which could only be a good thing.

*An average monthly price was calculated from the 10 cheapest packages in February 2009 (£9.05) and October 2015 (£2.43) demonstrating a fall in price of 73%.

**The line rental charges from all major providers were analysed in August 2009 and Oct 2015, revealing an average increase in price of 56%.

*** Based on BOE inflation rate.

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