Gigabit Broadband Affordability in the UK
Updated: Jun 21, 2022
Following our recent study of broadband affordability in the UK, today we are looking at the lowest available gigabit broadband tariffs across the UK. By gigabit we mean broadband services with 900-1000Mbps downstream speeds, provided over FTTP or Virgin Media’s Docsis3.1 networks.
For England and Wales, we conducted our analysis at the level of LSOA (Lower Layer Super Output Area), a geographical unit used by the ONS to report small area statistics. Each LSOA contains between 400 and 1,200 households. For Scotland, we used their small areas called Data Zones (DZ). These are small enough units at the right level of granularity to reflect the differences even within the same cities, towns and rural areas. There are currently around 42,000 small areas (LSOAs and DZs) in the UK.
For this analysis, we used residential broadband tariffs marketed by ISPs in February 2022. Broadband services with gigabit speeds and the lowest available monthly subscriptions that consumers could access in every LSOA were the basis of our comparison. A lot of these tariffs came with a minimum commitment – 12, 18 or 24 month contracts. We used the lowest tariffs available, even if that meant the longest fixed term contract.
The lowest available monthly gigabit broadband tariff was identified based on the presence of gigabit offering ISPs in every LSOA (in some areas there are up to 5 such ISPs, although 1 or 2 is most common). In turn this was based on the ThinkPoint broadband availability dataset containing data from 1.7 million postcodes. Broadband pricing data at the postcode level is available upon subscription to our ThinkPoint product.
Monthly price of gigabit broadband – how different is it across the UK?
As of February 2022, we found at least one gigabit tariff available in 89% of all UK LSOAs and DZs. The lowest available monthly cost of gigabit broadband across the UK varied from £25.00 (a 900/900Mbps service from Toob in Southampton) to £96.00 (a 1000/200Mbps service from Ecom in Buckinghamshire). Both services came with free installation.
Some ISPs additionally charge for installation and / or activation, although this is more typical of smaller ISPs and community projects, with an exception of Virgin Media and KCOM who also have set-up charges. Installation of broadband services tends to bear especially high cost in rural areas though some consumers can get the cost subsidised by the Government under the Gigabit Broadband Voucher Scheme.
Ten gigabit broadband services in our sample came with installation / activation charges which varied from £5.00 to £150, with the majority of ISPs waiving set-up costs for customers signing fixed term contracts.
In terms of geography, the cheapest gigabit broadband services (under £40 a month) were available to larger areas in the Northwest and Northern Ireland, with a scattering of ‘cheap’ LSOAs and DZs here and there in other parts of the UK.
In 90.2% of LSOAs and DZs with a gigabit broadband service the lowest available gigabit tariff was higher than the median tariff of £49.48.
Even within the same LSOA or DZ not all postcodes will necessarily have access to the same services, and within a local authority the differences can be even more pronounced. As an example, in Southampton the cheapest gigabit service varied from £25.00 to £62.00 a month.
At the national level, some consumers paid 3-4 times more for a gigabit service compared to those in the cheapest areas, depending on which provider’s broadband network they had access to.
In terms of coverage, BT was the dominant cheapest gigabit broadband provider available in 17,672 LSOAs/DZs. It was followed by Virgin Media (12,880), Hyperoptic (2,450), Vodafone over CityFibre’s network (1,293), Community Fibre (942), and Gigaclear (735), with 35 other ISPs offering lowest gigabit tariffs in other areas.
A common question is whether broadband pricing is related to the extent of competition in an area. We found a moderate negative correlation of -0.64 between the number of ISPs in an LSOA and the lowest available gigabit broadband tariff, i.e. competition can push the price down to some extent.
The entry level price for a gigabit broadband service varies a lot across the UK, depending on which and how many fibre providers are available in a postcode. In some areas, consumers will pay £25 a month while in others they will have to shell out £96 a month for a gigabit broadband plan. Some households may face hefty installation charges at up to £150, although in rural areas they might be subsidised by the Gigabit Voucher Scheme. Such significant price differences are to some extent impacted by competition but also by different funding models and schemes. Installing a direct fibre network is an expensive affair.
Due to income inequality households in some parts of the country will spend a larger proportion of their income on gigabit broadband than in others. As there is significant income deprivation in some areas, some households will find it impossible to subscribe to ultrafast broadband which is sometimes taken for granted in the most developed areas and economies.
 We acknowledge this is not a complete record, and some smaller ISPs may have been missed. Nevertheless, our analysis is based on 43 gigabit broadband providers, which is a significant proportion of the UK ISPs.