One quarter of people in the UK are projected to still be on slower internet connections on legacy copper networks by 2030 because of reluctance to switch providers, according to new research.
Consumers are hesitant about switching to new ultrafast fibre optic broadband because the perceived benefit is negligible, they fear it could cause them internet problems in the short term and they do not want to pay more, according to the research for UK broadband provider TalkTalk.
“The whole dialogue needs to move to consumer take-up,” said Tristia Harrison, chief executive of TalkTalk, which has 4mn customers in the UK.
After years of slow progress on updating infrastructure, the UK’s incumbent telecoms provider Openreach has accelerated its fibre rollout in recent years, incentivised in part by competition from new entrants.
The government has now set a target of delivering superfast fully fibre optic broadband to 99 per cent of homes by 2030 and has started providing subsidies to companies to help them connect more remote areas.
But the question of whether customers will actually switch to the new networks needs to be addressed, Harrison said
“The near-term economics and health of the sector are under threat. Unless there’s take-up, there isn’t the revenue that underpins network operators’ build and that’s bad news for . . . the economy and for the country.”
Around 28 per cent of UK premises are covered by fully fibre optic broadband, but only one quarter of these have opted for it, according to Ofcom data.
Superfast broadband is available to more than 80 per cent of homes in Spain and Portugal, though over 20 per cent of those that could migrate over have not done so, according to data collected by Frontier Economics, which did the research for TalkTalk.
The consultancy estimates that in the UK, although 99 per cent of premises are set to have the option of superfast broadband by 2030, only 75 per cent will migrate over.
For their business model to be viable, network companies need to win around 40 per cent market share in the locations where they operate, according to industry estimates, either by selling broadband contracts to consumers directly or wholesaling to internet service providers such as Vodafone, TalkTalk and Sky.
The TalkTalk-commissioned report concluded that there is now a “strong case” for the government to focus on encouraging customers to sign up for superfast broadband to boost productivity and increase digital inclusion.
The report calls on the government to run an information and awareness campaign about the benefits of full fibre broadband, introduce a full fibre employee subsidy scheme and create a right to the technology for social housing tenants.