Wednesday, February 20th, 2019 (1:55 pm) - Score 3,967

A new survey of 8,000 people living across eight European countries, which was commissioned by cable ISP Liberty Global (Virgin Media), has examined the value of home connectivity to consumers and found that broadband (inc. WiFi) scores higher than sex, holidays, favourite TV channel(s) and chocolate.

Overall 38% of consumers said they valued the “collective” benefits of their home broadband service the most (defined as coverage, network quality and innovation), while 33% said they valued its individual benefits the most (speed or bundle size), 16% said price and 13% opted for flexibility.

Respondents to the A.T. Kearney survey (here) were then asked how much they’d have to be paid in order to give up their home broadband and WiFi connection for an entire year. Interestingly the results revealed a generation gap. For example, people aged 18-29 would demand €32,500 Euros, while those aged 50-65 would only demand €9,000.

A similar question was then asked across a range of other items, including home broadband, sex, holidays, favourite TV channel(s) and chocolate. The results revealed that people in the UK would expect to be paid €16,800 to forgo home broadband for a year, which was followed by sex (€11,200), holidays (€11,200), favourite TV channel (€2,200) and chocolate (€1,100). Interestingly sex only ranked top in Poland and Switzerland.

Delving further into the link between price and investment in high-quality home broadband services, the report concludes that there is a positive relationship between price levels, investment and benefits delivered to society. It identifies a virtuous circle where positive revenue developments through price create headroom for investment, which in turn impacts on further revenue generation (i.e. investment in broadband is higher in countries where consumers pay more for their service).

Manuel Kohnstamm, Chief Corp Affairs Officer of Liberty Global, said: “We’ve commissioned this research to shine a light on what consumers think is important about their broadband and WiFi services. In particular, the report’s key finding that price is lower down the list of priorities for consumers suggests that regulators would do well to find policies that successfully balance all prevailing factors valued by broadband users – including coverage, network quality and innovation – rather than narrowly focusing on the pricing of such services.”

Admittedly none of this changes the fact that consumers remain highly sensitive to changes in price, particularly in the UK where many have become use to rock bottom discounts being the order of the day when hunting for a new service (not uncommon for an aggressively competitive market). Nevertheless some operators argue that pricing too low can also make it harder for operators to invest in upgrading their infrastructure.