(Image Credit: iStockPhoto/robynmac)
UK consumers would be willing to pay nearly £1.5 billion extra a year to telecom providers for noticeably better services—but they are intolerant of security failures.
In a KPMG survey of 2,000 adults in the UK, respondents indicated they would spend an additional £900 million annually for improved customer service and fewer dropped calls, and roughly £550 million a year for more reliable broadband connections.
Alex Holt, Partner and Head of Telco, Media and Technology at KPMG UK, commented: “Today’s consumers value their connected lives, so tolerance for anything that disrupts connections to devices or services is extremely low. Before telcos can upsell and cross-sell, they must first get the basics right and deliver an outstanding connected experience.”
While the findings show strong demand for better telecom services, most UK customers will not tolerate data breaches. Around half of those surveyed said they would cancel their contract if their personal data were leaked—even if cancelling meant paying an early-exit fee.
UK internet service provider TalkTalk experienced this firsthand after a cyberattack last year exposed details for nearly 157,000 customers. The company estimated the attack would cost about £35 million in one-off expenses, not including customer losses and the subsequent £400,000 fine imposed by the Information Commissioner’s Office (ICO).
KPMG’s research found consumers are twice as likely to switch providers after a security breach than because of rude or unhelpful staff.
There is also clear appetite for bundled services among UK customers. Around half of respondents said they would consider buying smartwatches or connected kitchen appliances from their telecom provider, and one in five said they would purchase smart home security products from the same provider.
When asked about quad-play packages—combining television, broadband internet, landline, and mobile services—about one-third of respondents would consider such bundles. However, a majority remain wary of depending on a single provider for all services.
“We believe telcos have a great opportunity to shape the connected world,” Holt added. “They need to act now: invest in robust infrastructure and position themselves as trusted digital curators to guide consumers through an exciting but sometimes daunting journey into a more connected life. In short—get the basics right today to realize the opportunities of the connected world tomorrow.”
The report, titled ‘The digital telco: gateway to the connected world,’ is available from KPMG.
What are your thoughts on the report’s findings? Let us know in the comments.
Editor’s note 03 Nov: A previous version of this article stated that TalkTalk’s fine was £400 million. The correct amount is £400,000. TelecomsTech is happy to correct the record.