Introduction
Mobile phone and broadband use have increased dramatically in the past 10 years and are now considered by many people to be an essential household utility alongside water, gas, and electricity.
According to research by comparison service Uswitch, around 98% of UK adults aged 16-24 own a smartphone, and 80% of people aged 65 and above. By 2025, it's predicted that around 65 million people (95% of the population) will be smartphone users.
It’s a similar story for broadband use. The growth in both home entertainment and working from home means that access to broadband is now considered a necessity by many UK households, and in 2023 the fixed communications (fixed line broadband) sector generated approximately £14 billion worth of revenue.
However, the cost and management of telecoms services, such as mobile and broadband, are key concerns for many UK consumers and small businesses, many of whom keep a close watch on their bills. Despite these concerns, there are potential savings to be made, not least in switching contracts.
Our guide explains how open banking and smart data can revolutionise how telecoms services are consumed, managed, and paid for to give people greater control over their spending and usage.
It also demonstrates how some telecoms companies are using open banking to streamline billing and collection, and to help financially vulnerable consumers access affordable plans.
UK telecoms set for transformation
In 2023, the Department of Science, Innovation and Technology published its 'Open Communications' report which examined how the telecoms sector could be made more accessible for consumers, including making it easier to switch provider.
The report stated that to successfully navigate the telecoms market, “a consumer requires a greater degree of technical knowledge not generally possessed by the average consumer, or to undertake time-consuming market research”.
This complexity can lead to consumers potentially paying too much for broadband and mobile tariffs, or using services that don’t meet their needs.
The role of smart data
The Government's Data (Use and Access) Bill, which is currently before Parliament, is looking to remedy this situation by expanding the data-sharing principles delivered by open banking to improve competition and consumer choice in key economic sectors, including energy, finance, retail, and telecoms.
Expanding data-sharing principles in this way could mean an industry-wide requirement for broadband and mobile operators to provide their customers, on request, data relating to their connectivity service – such as data usage, price, and speed.
It also aims to make it easier for consumers and SMEs to switch providers and tackle the loyalty penalty - the difference between what loyal and new consumers pay for the same service, which currently sits at around £1,114 a year for households across mobile phone bills, mortgages, and broadband services.
Integrating open communications, which enables customers to access and share their consumption and contract data through easy-to-use digital channels, is just one example of how smart data could revolutionise services in the telecoms industry.
By leveraging smart data, telecoms providers can offer services with enhanced personalisation, flexibility, and transparency on pricing, allowing consumers to make more informed decisions about their mobile and broadband contracts.
Plugging gaps in the market
The introduction of simplified open communications could also fill existing gaps in the market. For example, the framework could complement current interventions like End of Contract Notifications and introduce streamlined processes such as One-Touch switching for fixed broadband services. These innovations are expected to increase customer choice and satisfaction by making it easier to switch providers and access fairer pricing.
Consumer interest is strong
Surveys indicate that there is strong consumer interest in these changes, with some revealing that up to 63% of UK customers are eager to explore new payment solutions from their telecoms service providers.
As the telecoms industry embraces a new wave of change, the resulting boost to competition and efficiency across the market is set to significantly improve the customer experience for service.
