Broadband Providers Best Placed to Shape the Future of the UK’s Multiplay Market

Consumers Say Broadband Is Most Valued Multiplay Service in Rapidly Shifting Market

3 February 2015: Over 65% of people in the UK signed up to a bundle of communications services value their broadband access more than their pay-TV service, fixed-line phone or even their mobile phone service, according to CCS Insight’s latest multiplay research report.

This puts broadband providers such as BT, Sky and Virgin Media in pole position to capitalise on consumers’ increasing willingness to buy all their communications and entertainment services from a single provider.

CCS Insight surveyed 1,000 decision makers in UK households responsible for buying media and telecom services.

The research showed a clear appetite for multiplay services. About a third of people answering the survey were already paying for a bundle of services. And a further 40 percent would consider signing up for one. Better value and convenience are the two most important considerations in this decision.

This presents providers with a considerable opportunity to cross-sell more services to their existing customers. It also goes some way to explain the recent moves by BT and Three to acquire EE and O2 respectively (as predicted by CCS Insight in November 2013 and 2014)*; the decision by Vodafone to launch broadband and TV services; and last week’s announcement from Sky to launch a mobile service.

Owing to increasing demand from consumers for multiplay services, CCS Insight believes that further market consolidation and acquisitions in the next 12 months are certain. The ability to offer multiplay products will be the principal driving force, with providers making further moves to strengthen their position in the market.

“Companies are scared of missing out on a huge opportunity,” said Paolo Pescatore, director of multiplay and media at CCS Insight. “With consumers telling us that it is more convenient and better value to buy broadband, mobile, TV and land-line access from one company, incumbent providers that can offer all these services are in the perfect position — it’s little wonder we’re seeing a frenzy of M&A activity as leading players scramble to secure these assets.”

“Our research indicates that new entrants in the broadband market face a significant challenge in winning customers,” continued Pescatore. “Networks selling only mobile telephone services must take careful notice of this trend and should quickly offer their customers a broadband product to avoid being left behind. If they don’t move quickly they could haemorrhage customers to broadband providers offering a competitively priced mobile service within their bundles.”

However, Pescatore also cautioned providers: “While most people who have multiplay bundles today are happy, there’s a significant minority — about one in five — who feel they aren’t getting sufficient value for money. This suggests that providers need to do a better job of explaining the cost benefits of multiplay services. We believe they should also be clearer about the tariff bundles they offer.”

The CCS Insight report notes that while providers in the UK market currently focus on quad-play offerings, this is expected to evolve. CCS Insight believes there will be a significant opportunity for a wide spectrum of other services such as enabling connected cars, home automation and surveillance.

Click on the infographic above for a larger version or click here for a PDF version.

About CCS Insight

CCS Insight is a global technology analyst company focussing on the mobile, Internet and media industries. It provides comprehensive services that are tailored to meet the needs of individual clients, helping them make sense of the connected world.

* See CCS Insight Predictions for 2014 and Beyond (published November 2013) which included the prediction that Three would buy O2. CCS Insight also correctly predicted BT would acquire EE in November 2014.

For further information contact:

Hugo Deacon
020 7861 2842

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