Question of the Fortnight
Prices are similar everywhere but incomes vary greatly
Where in the UK is broadband most and least affordable?
You might be wondering why we didn’t use ‘cheapest’ instead of ‘affordable’ in our heading. It’s because we’re looking at how much of a household’s income is eaten up by broadband. It’s a question of relative cost. The country’s most expensive broadband will feel like peanuts if you’re on a Premier League footballer’s salary.
The results come from a survey conducted by consultancy firm Point Topic, which worked out what percentage of income it would take to subscribe to the cheapest deal available in a given area.
It did this by dividing the UK into 34,753 Lower Layer Super Output Areas (LSOAS) in England and Wales, each comprising between 400 and 1,200 households. These areas, devised by the Office of National Statistics, are small enough to reflect differences within the same city, town and village.
Point Topic noted that many of the cheapest deals were promotional tariffs lasting up to 24 months. Lowest prices ranged from £175.95 a year (a 24Mbps ADSL package from Vispa) to £345.87 (a 36Mbps Fibre-to-the-cabinet service from BT).
Analysts worked out what customers pay annually, including other costs like phone line rental, and charges for installation. This overall expenditure was calculated against income before rent and mortgage payments.
They found that as of May 2020, the lowest available annual cost of broadband
Many households in the poorest areas spend over two per cent of their net yearly income on broadband
contract varied from £175.95 (a 24Mbps ADSL package from Vispa) in some areas to £345.87 (a 36Mbps Fibre-tothe-cabinet service from BT) in others. Both deals came with unlimited data, though other packages restricted data to up to 20GB a month.
These prices were evenly spread across the UK - roughly, what you pay in Cornwall you also pay in Cumbria. But the chunk it takes out of customers’ income varies greatly. Many households in the poorest areas – Wales and the south west, north and east of England - spend over two per cent of their net yearly income on broadband (see the dark blue areas on the map above). This is seven times greater than areas in more affluent locations.
The city with the least affordable broadband is actually in the midlands: Leicester. In one part of the city residents paid 2.35 per cent of their annual income on broadband, averaging out at 1.17 per cent for all households. This is followed by Hull (1.07), Blackpool (1.01) and Bradford (1.00). See the top 20 at www.snipca.com/35209.
At the other end of the scale is the wealthy London
borough of Islington – where some residents paid only 0.33 of their income on broadband – and the City of London.
Point Topic’s research shows that most people can access broadband for less than £45 a month, which is what Ofcom regards as affordable.
It also finds that most of the UK meets the target set by the UN’S Broadband Commission for Sustainable Development, which is for basic broadband to cost less than 2 per cent of monthly gross income by 2025.
Keeping broadband affordable is vital because Ofcom’s research shows that nearly a third of the “most financially vulnerable” people live in households without any internet access. Lockdown has made the problem more acute, with 60,000 school children lacking the web at home.
The Government is right to set ambitious targets for faster connections, but it must make sure they don’t lead to soaring prices and a rise in broadband poverty.