Competition in the broadband market is showing no signs of slowing, despite the regulator complaining customers could be finding switching too difficult.
According to new study from big four accountant EY as many as one in four broadband customers are willing to switch provider this year.
That's up from just over one in five (21 per cent) in 2013 when the survey was last run.
Lower prices and trust levels with service providers are the leading switching triggers, cited by 43 per cent of households.
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Despite the emphasis telecos are putting on so-called quadplay – where they offer internet, mobile, TV and telephone services in a bundle – demands for new service elements such as premium TV and mobile is much less pronounced, accounting for just nine per cent of switching.
Frustratingly for internet service providers (ISPs), one in three households see no or little difference between broadband suppliers, suggesting the final decision comes down largely to cost.
The use of price comparison sites to find the best deals is also up. Almost four in ten (38 per cent) of respondents now use price comparison websites to choose their broadband provider, up from 34 per cent in 2013.
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Recently Vodafone took steps to make pricing more clear for customers ahead of regulation coming in forcing them to do so.
Stuart Orr, EY technology, media, entertainment and telecommunications sector partner said:
Even though there’s greater segmentation and more targeted offerings than ever before, consumers see little difference between providers. This suggests the industry could be moving towards a model similar to the utility market, where the only perceived differentiator is price. Avoiding that ‘race to the bottom’ will come down to the value of the brand, particularly in terms of trust, customer engagement and service.
Despite continuing migration to more sophisticated packages, many broadband households remain uncertain as to the merits of broadband packages that include mobile services.
More than half (55 per cent) say they would only be interested in a package that included mobile if offered a significant discount on the stand-alone price, while one in three users disagree that purchasing mobile and broadband services together is a logical purchasing decision.
Which are you?
Based on the research, EY has divided UK households up into seven categories:
· Digital Devotees – Comprise 16 per cent of the broadband household market. They are young, tech-savvy and content-hungry, they also have a high propensity to switch providers.
· Content Light Bundlers (17 per cent) – Sophisticated users who understand what they are buying. Unwilling to pay for sport and prefer to have free/basic TV as part of the bundle.
· Serious about sport (14 per cent) – They are focused on being able to watch sport and are willing to pay for it. To a lesser extent, they are also willing to pay for other content.
· Disgruntled users (17 per cent) – They are moderately interested in new technology but feel that purchasing bundles is complicated and confusing. Only 11% of them are very satisfied with their broadband provider, compared to 27% overall. Two in three find introductory offers confusing, compared to 49% overall.
· Bargain hunters (14 per cent) – They are knowledgeable, highly price-sensitive and very value-focused. This segment has the highest proportion of those agreeing that their household spends as little as possible on communication services, at 71 per cent.
· Loyal bundlers (12 per cent) – They are highly loyal, with the highest average tenure with current providers and the lowest switching propensity. They are relatively light users of the internet, using it when they have a specific reason and restricting themselves to familiar websites.
· Functional users (11 per cent) – They are light users of the internet. They find purchasing communication services difficult and don’t understand broadband speed or how it relates to the internet, with 39%, the highest of any segment, agreeing with this statement.