The recovery stutters - UK broadband, telephony and pay TV trends Q4 2020 - Venture Insights

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The recovery stutters - UK broadband, telephony and pay TV trends Q4 2020 - Venture Insights
The recovery stutters
UK broadband, telephony and pay
TV trends Q4 2020
30 March 2021

James Barford         james.barford@endersanalysis.com
Karen Egan            karen.egan@endersanalysis.com
Katharine Lindsay     katharine.lindsay@endersanalysis.com

+44 (0)20 7851 0900
Demand for broadband and
Market revenue growth sunk back                                  Backbook pricing will improve
                                                                                                                              ultrafast looks promising, but will
to -3% in Q4 from -2% in Q3, with                                with numerous price increases
                                                                                                                               also take time to filter through to
  further backbook pricing and                                   announced, but these will only
                                                                                                                              revenue, with Q1 again lockdown-
    lockdown effects to blame                                    start to take effect in Q2 2021
                                                                                                                                            affected

Related reports:

UK full fibre regulation: The mist clears…somewhat [2021-029]

Recovery...of sorts: UK broadband, telephony and pay TV trends Q3 2020 [2020-115]

Football and COVID-19: Avoiding meltdown [2020-032]

Winners and losers as the UK fibres up [2020-004]

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                                                                                            The recovery stutters: UK broadband, telephony and pay TV trends Q4 2020 [2021-033]   2
Executive summary: The recovery stutters

Revenue growth        •   Consumer broadband, telephony and pay TV market revenue growth sunk back to -3% in Q4 2020 from -2% in Q3, largely
                          due to the delayed price rise at Virgin Media and Sky being hit by lockdown suppressing its pubs and clubs sports revenue
sinks back
                      •   While there were signs of a modest continued recovery elsewhere, back book pricing pressure is still weighing heavily, with
                          a large proportion of the Ofcom-mandated annual best tariff notifications being sent out during the quarter

Price increases are   •   There is relief in site for backbook pricing pressure, with the various measures due to annualise out over 2021 and 2022,
                          and all four major operators implementing supra-inflationary in-contract price increases in March/April 2021, with BT and
back, but not yet         TalkTalk returning to this practice

                      •   This will however only start to take effect from Q2 2021, and the bulk of the improvements will not be felt until mid-2022,
                          and growth may even slow again in Q1 2021, as annual best tariff notification take effect

                      •   Demand however does remain strong, with broadband net adds still running at a lockdown-accelerated rate, and demand
Ultrafast demand          for ultrafast very encouraging, with a meaningful ARPU boost likely to result
encouraging           •   Adoption progress for FTTP and ultrafast will unfortunately stall in Q1 however, as Openreach suspended installations for
                          much of the quarter

                      •   While medium term prospects are very positive, there looks to be at least one more quarter of pain before they start to
                          materialise

                      TalkTalk delisted from the London Stock Exchange in March 2021, and no longer publicly reports quarterly results. This report includes
                      estimates for TalkTalk based on its prior trends and wider industry figures. TalkTalk is about 7% of market revenue, and its broadband
                      figures are contained within Openreach reporting so total broadband volumes are unaffected.

                                                                         The recovery stutters: UK broadband, telephony and pay TV trends Q4 2020 [2021-033]   3
1. Market trends and outlook
2. Appendix

                         The recovery stutters: UK broadband, telephony and pay TV trends Q4 2020 [2021-033]   4
Subscription volume surge continues

•   Broadband net adds continued to be very strong, with Q4 c.50% higher            Market net additions
    than the same quarter last year, although the improvement over Q3 is likely
                                                                                     250
    largely seasonally driven, with the lockdown-driven boost being maintained                                                                                                       161
                                                                                                                                                                                                186
                                                                                     200   141         142
    rather than accelerating                                                         150
                                                                                                                          130
                                                                                                                                 103
                                                                                                                                              124          125
                                                                                                                                                                        105                           108
                                                                                     100     65          67         50
                                                                                                  46          30                                38                                                29
•   Line rental net adds improved in lockstep, and turned back positive for the       50                                           14
                                                                                       0
    first time in 2020. Comments from the operators however suggest that call                                            -1
                                                                                     -50                                                                     -24
                                                                                                                                                                         -26           -12-28
    volumes are still declining as fast if not faster than in the past, as many     -100
    consumers have been introduced to more modern forms of communication            -150                                               -112         -103
                                                                                                                                                                 -141
                                                                                    -200
    during lockdown such as video calling                                           -250                                                                                      -198
                                                                                           Dec-18 Mar-19 Jun-19 Sep-19 Dec-19 Mar-20 Jun-20 Sep-20 Dec-20
•   Pay TV net adds were particularly strong in Q4, turning strongly positive
    after five quarters of negative net adds, with this largely driven by a solid     Broadband        Line rental            Pay TV
    performance of Sky’s NOW TV product (perhaps largely seasonal), although                       Broadband figures include business connections; other figures are residential only.
                                                                                                                                                          Figures shown are organic.
    Virgin Media’s net losses continued to narrow                                                                                        [Source: Enders Analysis, company reports]

•   Broadband growth has now accelerated to just over 2%, and while line
    rental and Pay TV subscriber growth is still negative, recent performance       RGU and subscriber growth
    suggests that these will both turn positive during 2021, which will give a
                                                                                    3%
    useful following wind to revenue growth
                                                                                    2%
                                                                                    1%
                                                                                    0%
                                                                                    -1%
                                                                                    -2%
                                                                                    -3%
                                                                                    -4%
                                                                                      Dec-18 Mar-19 Jun-19                     Sep-19     Dec-19 Mar-20 Jun-20                       Sep-20     Dec-20

                                                                                           Broadband               Line rental            Pay TV                 RGUs            Subscribers
                                                                                                   Broadband figures include business connections; other figures are residential only.
                                                                                                                                         [Source: Enders Analysis, company reports]

                                                                                    The recovery stutters: UK broadband, telephony and pay TV trends Q4 2020 [2021-033]                                 5
Revenue growth stutters, and will continue to in the short term

•   Market revenue growth dipped back to -3% from -2% in the previous              RGU ARPU, volume and revenue growth
    quarter—a disappointing stutter although not as bad as the -6%
                                                                                   3%     2.6%
    experienced in Q2
                                                                                   2%                         1.0%
                                                                                                                        0.6%
•   The main drivers were increased lockdowns hitting Sky’s pubs and clubs         1%                                             -0.2%
    sports channel revenue, and a delayed price rise hitting Virgin Media.         0%
                                                                                                      0.2%
                                                                                   -1%
    Although these are both temporary effects, they will be maintained into Q1
                                                                                   -2%                                                                           -2.3%
    2021, and at least part of Q2 for the pubs and clubs weakness, with full re-                                                          -1.9%
                                                                                   -3%
    opening not due until 17 May                                                   -4%
                                                                                                                                                                          -3.1%

                                                                                   -5%
•   There are some following winds ahead, with the improved market volume                                                                              -5.5%
                                                                                   -6%
    growth slowly feeding through, the various backbook pricing ‘fairness                Dec-18 Mar-19 Jun-19 Sep-19 Dec-19 Mar-20 Jun-20 Sep-20 Dec-20
    agenda’ effects annualising out towards the end of 2021 and early 2022,                RGU ARPU        Average RGUs      Revenue
    backbook pricing receiving a positive boost from April with new/enhanced                                 Based on different accounting standards for TalkTalk prior to June 2018.
    price rises from BT and TalkTalk (combined with more regular ones from                                                        Based on BT Consumer, Virgin Media, Sky, TalkTalk.
                                                                                                                                          [Source: Enders Analysis, company reports]
    Virgin Media and Sky), and ultrafast pricing premia likely to start helping
    new customer ARPU from late 2021
                                                                                   Subscriber ARPU, volume, and revenue growth
•   However, early 2021 will still be challenging, and growth may even slow in      3%    2.6%
    Q1, as the drags are still present and some backbook effects (such as the       2%                        1.0%
                                                                                                                        0.6%
    annual best tariff notifications, discussed later) will worsen before they      1%                                            -0.2%
    improve                                                                         0%
                                                                                                      0.2%
                                                                                   -1%
                                                                                   -2%                                                                            -2.3%
                                                                                                                                           -1.9%
                                                                                   -3%
                                                                                   -4%                                                                                     -3.1%
                                                                                   -5%
                                                                                   -6%                                                                 -5.5%

                                                                                         Dec-18 Mar-19 Jun-19 Sep-19 Dec-19 Mar-20 Jun-20 Sep-20 Dec-20
                                                                                           Sub ARPU              Average subs             Revenue
                                                                                                             Based on different accounting standards for TalkTalk prior to June 2018.
                                                                                                                                  Based on BT Consumer, Virgin Media, Sky, TalkTalk.
                                                                                                                                          [Source: Enders Analysis, company reports]

                                                                                   The recovery stutters: UK broadband, telephony and pay TV trends Q4 2020 [2021-033]             6
A degree of convergence in revenue growth across the operators

•   Revenue growth across the Big 4 operators converged somewhat, as the           Average RGU growth by operator
    previous leaders, Sky and Virgin Media, slowed, and BT and TalkTalk
    accelerated:                                                                    6%
                                                                                    5%
       ⎻ BT‘s revenue growth improved a little, predominantly due to recent         4%
         improvements in broadband net adds flowing through, but it remains         3%
         low at -7%, hit by backbook pricing and ‘fairness agenda’ drags, with      2%
                                                                                    1%
         significant improvement not likely until late 2021 and 2022 when its       0%
         new in-contract price increase, ultrafast price premia and                -1%
         annualization of ‘fairness agenda’ drags should take effect               -2%
                                                                                   -3%
       ⎻ Virgin Media’s revenue growth was hit by its postponed 2020 price         -4%
         rise, and will not recover from this until the rescheduled March 2021       Dec-18 Mar-19 Jun-19           Sep-19 Dec-19 Mar-20 Jun-20                Sep-20 Dec-20
         price rise takes full effect in Q2 2021                                           BT Consumer             Virgin Media            Sky           TalkTalk            Total
       ⎻ Sky’s revenue growth was hit by lockdown returning for part of                                                    Total based on BT Consumer, Virgin Media, Sky, TalkTalk.
         quarter, with this hitting its ‘pubs and clubs’ sports subscription                                                             [Source: Enders Analysis, company reports]

         revenue base, an effect likely to be even more pronounced in Q1
         2021 given the full lockdown in force for the vast majority of the        Consumer revenue growth by operator
         quarter. Underlying growth however looks relatively healthy, with           6%
         Sky less exposed to backbook pricing pressure than it peers                 4%
       ⎻ TalkTalk’s has not reported for the quarter; we assume that its recent      2%
         ARPU improvement has continued. It remains under backbook                   0%
         pricing pressure, but has recently introduced annual in-contract price     -2%
         increases which will help ease this in 2021 and 2022                       -4%
                                                                                    -6%
•   None of the operators are thus likely to start 2021 well, but should recover
                                                                                    -8%
    during the year as pricing recovers from the various hits suffered during
                                                                                   -10%
    2020                                                                              Dec-18 Mar-19 Jun-19          Sep-19 Dec-19 Mar-20 Jun-20                Sep-20 Dec-20
                                                                                            BT Consumer              Virgin Media             Sky           TalkTalk
                                                                                                            Based on different accounting standards for TalkTalk prior to June 2018.
                                                                                                                                         [Source: Enders Analysis, company reports]

                                                                                   The recovery stutters: UK broadband, telephony and pay TV trends Q4 2020 [2021-033]          7
Falling ARPU for all

•   ARPU growth was negative for all of the Big 4 operators, with modest            Subscriber ARPU growth
    improvements at BT and TalkTalk more than offset by substantial declines
    at Virgin Media and Sky                                                         4%

                                                                                    2%
•   The latter two were hit by temporary factors, i.e. a postponed price rise and
    lockdown hit to pubs and clubs respectively, but these effects will both be     0%
    sustained through Q1 2021
                                                                                    -2%

                                                                                    -4%

                                                                                    -6%

                                                                                    -8%
                                                                                           BT Consumer      Virgin Media           Sky       TalkTalk on-net        Total
                                                                                       Dec-19     Mar-20      Jun-20      Sep-20     Dec-20
                                                                                                                                         [Source: Enders Analysis, company reports]

                                                                                    RGU ARPU growth
                                                                                    4%

                                                                                    2%

                                                                                    0%

                                                                                    -2%

                                                                                    -4%

                                                                                    -6%

                                                                                    -8%
                                                                                           BT Consumer      Virgin Media           Sky       TalkTalk on-net        Total
                                                                                      Dec-19      Mar-20     Jun-20     Sep-20     Dec-20
                                                                                                                                         [Source: Enders Analysis, company reports]

                                                                                    The recovery stutters: UK broadband, telephony and pay TV trends Q4 2020 [2021-033]        8
New customer pricing reasonably firm, and converging to high speed as standard

•   Broadband pricing has been fairly firm overall, although entry level pricing    Broadband entry level pricing, new customers (£/month)
    has been drifting up as operators equalise pricing across entry level and
    high speed. This is likely in part to drive high speed adoption (to maintain    35
    Openreach discounts) and partly to prepare for full fibre migration (with       30
    Openreach’s full fibre wholesale offering only offering high speed tiers).      25                                                                                           £25
    Average high speed pricing has been roughly stable in 2020 and into early
                                                                                    20
    2021, although at a lower level than 2019
                                                                                    15
•   BT has sustained a slightly more competitive level in the latter half of 2020   10
    and early 2021, moving to be slightly cheaper than Virgin Media and only a
                                                                                     5
    little more expensive than Sky
                                                                                    0
•   TalkTalk has got more aggressive into 2021, and now it is clearly the           Mar-19    Jun-19     Sep-19 Dec-19 Mar-20 Jun-20 Sep-20 Dec-20 Mar-21
    cheapest of the Big 4 main brands, with the others in a fairly tight band. We            BT           Virgin Media     Sky       TalkTalk     Average
    would note that both BT and Sky are more competitive on their discount                            Prices are snapshots taken approximately in the middle of each labelled quarter.
                                                                                                                                        [Source: Enders Analysis, company websites]
    sub-brands (Plusnet and NOW respectively), which compete with TalkTalk
    in discount-focused channels
                                                                                    Broadband high speed pricing, new customers (£/month)
                                                                                    35
                                                                                    30
                                                                                    25                                                                                           £26

                                                                                    20
                                                                                    15
                                                                                    10
                                                                                     5
                                                                                    0
                                                                                    Mar-19     Jun-19    Sep-19 Dec-19 Mar-20 Jun-20 Sep-20 Dec-20 Mar-21
                                                                                              BT           Virgin Media    Sky       TalkTalk     Average
                                                                                                      Prices are snapshots taken approximately in the middle of each labelled quarter.
                                                                                                                                        [Source: Enders Analysis, company websites]

                                                                                    The recovery stutters: UK broadband, telephony and pay TV trends Q4 2020 [2021-033]           9
Backbook pricing pressure partly driven by Ofcom-mandated notifications

•   From 15 February 2020 (with some interruption due to the lockdown)                Contract status of customers by provider, September 2019
    operators have been obliged to send soon-to-be out-of-contract broadband
    subscribers a notification outlining their alternatives (End of Contract          100%
    Notification—EOCN), including re-contracting and/or switching to another           90%                       24%                                        25%
                                                                                                   30%
    provider, and giving ‘best price’ details including prices available to new        80%                                      42%          42%
                                                                                       70%                                                                                  61%
    customers only
                                                                                       60%
                                                                                                                 48%
•   This will have stimulated some churn and some re-contracting to cheaper            50%                                                                  49%
                                                                                                                                31%
    options, and it will be an increasing effect as contracts expire, building over    40%         55%
                                                                                                                                             39%
    one to two years as the base cycles through                                        30%                                                                                  23%
                                                                                       20%
•   Operators are also obliged to send annual notifications with similar               10%
                                                                                                                 29%            28%                         26%
                                                                                                   14%                                       19%                            16%
    information to all those out-of-contract (Annual Best Tariff Notification—          0%
    ABTN), with this having to be done before 15 February 2021 (and annually                    BT               EE        Plusnet       Sky              TalkTalk    Virgin Media
    thereafter). Most of the operators have delayed this towards the end of the          New contract        Re-contracted    Out-of-contract       [Source: Enders Analysis, Ofcom]
    period, with most likely to having been sent in late Q4 2020 and early Q1
    2021
                                                                                      Proportion of revenue at risk if OOC customers switched to ...
•   All of the operators have some exposure to out-of-contract customer being         18%
    on higher tariffs than new customers, although this does vary considerably        16%
                                                                                                                                                                  15.5%

    by operator as shown in the chart opposite. This analysis is sourced from         14%                                                                                 13.2%
    Ofcom figures from September 2019; we note that the exposure has likely           12%
    fallen at all operators since then, partly due to reduced out-of-contract         10%
    pricing, and partly due to increased new customer pricing                          8%        7.1%
                                                                                                                                            6.4%
                                                                                                                                                   5.5%
                                                                                       6%
•   We expect the overall industry impact of the notifications to be modest                              3.5%
                                                                                       4%                              2.9%
    (
Price rises return in force

•     Although a mere six months ago it looked like bumper annual price rises for         •      TalkTalk has moved back to annual rises even for in-contract customers,
      existing customers was a legacy policy, forgoing this practice has proven to               with most subject to a £2 per month rise from 1 April 2021, and then an
      not be popular enough with consumers to counteract the very significant                    annual CPI+3.7% rise from April 2022
      lost financial benefits, resulting in BT and TalkTalk both returning to supra-
                                                                                          •      Virgin Media implemented its delayed 2020 price rise on 1 March 2021,
      inflationary annual increases, albeit with more transparency than was the
                                                                                                 with most of the impact to be felt in Q2 2021
      case before
                                                                                          •      Sky is also implementing a price rise from April, with a range of increases
•     BT has moved to a policy of RPI+3.9% increases from April 2021, albeit only
                                                                                                 across broadband, call packages and pay TV, with the overall increase
      applied to those that have signed up or re-contracted after the
                                                                                                 capped at £6 a month for each customer
      announcement in September (for whom the rise is embedded in their
      contract), ensuring that the rises are not unexpected

                                                                                          •      Further details of pricing changes are shown in the Appendix

Existing customer pricing changes
              Q3-19           Q4-19            Q1-20                 Q2-20            Q3-20               Q4-20              Q1-21               Q2-21               Q3-21
                                                         Inflation-linked rise only
                                          1 March 2020
                                                                                                                           31 March 2021

    1 September 2019
                                                                                                                       1 March 2021

                                                  1 April 2020
                                                                                                                               1 April 2021

                                                                                                                               1 April 2021

                 BT    Virgin Media    Sky    TalkTalk                                                                                         [Source: Enders Analysis, company websites]

                                                                                              The recovery stutters: UK broadband, telephony and pay TV trends Q4 2020 [2021-033]      11
Full fibre regulation: The mist clears…somewhat

•   On 18 March 2021 Ofcom published its long awaited         Ofcom’s copper and full fibre new regulation summary
    final statement on the regulation of Openreach’s
                                                                                                    Area 2                                       Area 3
    wholesale rates for the next five years from 1 April
    2021                                                                               At least one planned full fibre or
                                                              Definition                                                               No planned competitor
                                                                                               cable competitor
•   The statement is of course in line with various
    previous consultations, adding detail in various areas,   % of premises                           70%                                         30%
    with the general picture being that of considerable       MPF                     Flat prices in real terms (currently
    forbearance on Openreach’s pricing to allow a return      (copper)                                 £7)
    to be made on full fibre roll-out                                                                                               Same as Area 2 given current
                                                                                      Flat prices in real terms (currently
                                                              FTTC 40/10 (anchor)                                                      Openreach build-out
•   There are two areas where the detail is of particular                             £5 in addition to MPF—total £12)
    importance—‘fair bet’ return and Openreach’s                                                                                           commitments
                                                              FTTC (all other
    discount pricing plan flexibility— but here Ofcom left                                    No charge control
                                                              bandwidths)
    considerable uncertainty (see UK full fibre
    regulation: The mist clears…somewhat [2021-029])          FTTP 40/10              FTTC 40/10 plus a fibre premium            FTTC 40/10 plus a fibre premium
                                                              (anchor)                      of £1.70 (total £14)                       of £1.70 (total £14)
•   BT has responded positively to the increased
    certainty on the bulk of the regulation though, and       FTTP (all other
                                                                                              No charge control                           No charge control
    has officially confirmed its 20 million premises          bandwidths)
    passed with full fibre target by the mid- to late-2020s   Leased lines                 Flat prices in real terms                   Flat prices in real terms
•   It further stated that the regulation allows them to      Dark fibre                  No requirement to supply                   Cost-based charge control
    ramp up roll-out to 3 million premises passed a year
    (or 750k/quarter), up from 550k/quarter in Q4 2020,       Duct and pole access       Cost-based charge control                   Cost-based charge control
    which would enable them to hit the 20 million target                               No requirement to offer new copper services where fibre is available
    in 2026                                                                              once 75% coverage is reached within an exchange area. Once full
                                                              Withdrawal of copper     coverage is reached in that exchange area and two years have passed
•   It may yet announce a further acceleration and/or                                   since 75% coverage was reached, charge controls on copper will be
    target extension, with 20 million (or roughly two                                            removed, effectively allowing copper withdrawal
    thirds coverage) unlikely to be the long term limit of                                                                                           Prices are per month.
    their coverage ambitions                                                                                                                              [Source: Ofcom]

                                                                                              The recovery stutters: UK broadband, telephony and pay TV trends Q4
                                                                                                                                                                       12
                                                                                                                                                 2020 [2021-033]
Full fibre and ultrafast adoption tracking: strong trends, but will stall next quarter

•   The overall Openreach FTTP adoption rate rose slightly in Q4, as the             Openreach full fibre adoption where available
    adoption rate by non-BT providers rose following product launches in the
    latter stages of 2020, although BT does still dominate overall adoption          35%
                                                                                     30%
•   The adoption rate had been declining due a mix effect, as much of
    Openreach’s early FTTP roll-out was to rural areas as part of BDUK               25%
    (Building Digital UK), and in new housing developments; FTTP is the only         20%
    option in these areas (and often BT the only service provider), with             15%
    Openreach offering standard speeds at standard pricing but over FTTP,
                                                                                     10%
    resulting in high initial penetration. Openreach’s current roll-out is largely
    done on an overlay basis, with existing customers retaining their copper         5%
    connections, although most new ones will be over FTTP due to current             0%
    ‘special offer’ incentives                                                               Dec-18 Mar-19 Jun-19 Sep-19 Dec-19 Mar-20 Jun-20 Sep-20 Dec-20

•   The more important metric of ultrafast adoption (i.e. consumers actually            BT Consumer           Other                         [Source: Enders Analysis, company reports]
    paying a premium for 100Mbps+ speeds) is rising much more firmly, and has
    now hit 20% at BT Consumer despite the rapid ongoing expansion in the
                                                                                     BT Consumer ultrafast (>100Mbps) adoption where available
    addressable base, which is very encouraging at this early stage. Given the
    high premia currently charged for ultrafast speeds—£13 to £33 a month—if         25%
    adoption settles at 20% this would give BT an ARPU boost of around 5-                                                                                                     20%
                                                                                     20%                                                                            17%
    15%, a very attractive prospect

•   Adoption of both FTTP and ultrafast will unfortunately likely stall in Q1        15%                                              12%       13%       12%
                                                                                                                            11%
    2021, as Openreach suspended new FTTP installations for much of the                                            9%
                                                                                     10%
    quarter due to the CV-19 spike early in the year                                           7%        7%

                                                                                      5%

                                                                                      0%
                                                                                             Dec-18 Mar-19 Jun-19 Sep-19 Dec-19 Mar-20 Jun-20 Sep-20 Dec-20

                                                                                           Estimated by dividing BT Consumer’s ultrafast penetration by Openreach’s ultrafast coverage.
                                                                                                                                            [Source: Enders Analysis, company reports]

                                                                                     The recovery stutters: UK broadband, telephony and pay TV trends Q4 2020 [2021-033]          13
Q4 2020 trends: broadband net adds still strong

•   Market broadband net adds were gain strong, with an improvement on (the       Broadband organic net adds (000)
    very strong) Q3, although this sequential improvement is likely seasonally
    driven                                                                        200                                                                                          186

                                                                                  150
•   The lockdown-driven boost is thus continuing, with working-from-home
    encouraging previously ‘smartphone-only’ households to reassess this          100                                                                             68
                                                                                                 48           55
    decision                                                                       50                                                                 38
                                                                                                                           10
•   Virgin Media continued to lead the market in net adds terms, but it will be      0
    hit in Q1 2021 by the announcement and execution of its price increase,
                                                                                   -50                                                    -32
    bring its net adds down to close to zero, albeit only temporarily
                                                                                  -100
•   BT’s renaissance continued, helped by improving customer service and                 BT retail*    Virgin        Sky         TalkTalk Vodafone          Other        Total
    (slightly) cheaper pricing                                                                         Media
                                                                                    Dec-19    Mar-20     Jun-20     Sep-20       Dec-20                                *Includes EE.
•   Sky and TalkTalk have not reported figures, but we expect that Sky                                                                    [Source: Enders Analysis, company reports]
    continued to recover from its Q2 issues, and that TalkTalk also improved,
    and the latter may improve further into Q1 2021 given its more aggressive     Broadband organic subscriber growth
    pricing
                                                                                   7%
                                                                                   6%
                                                                                   5%
                                                                                   4%
                                                                                   3%
                                                                                   2%
                                                                                   1%
                                                                                   0%
                                                                                  -1%
                                                                                  -2%
                                                                                  -3%
                                                                                    Dec-18 Mar-19 Jun-19           Sep-19       Dec-19 Mar-20 Jun-20           Sep-20       Dec-20
                                                                                          BT retail*        Virgin Media            Sky          TalkTalk           Total
                                                                                                                                                                       *Includes EE.
                                                                                                                                          [Source: Enders Analysis, company reports]

                                                                                  The recovery stutters: UK broadband, telephony and pay TV trends Q4 2020 [2021-033]            14
High speed broadband adoption continues apace

•   High speed net adds had another strong quarter, with penetration rates          High speed net adds (000)
    continuing to rise across all operators
                                                                                    800
•   Pricing is now similar for entry level broadband and the lowest tier of high
    speed broadband for all of the Big 4 main brands, but non-high speed is still   600                                                                                          526
    offered at a reduced price from smaller discount providers and the discount
    brands of the big providers, and thus there may be a residual base of entry     400
    level speed customers who will have to move to a higher priced product as                                               200
                                                                                    200           127                                    140
    full fibre is rolled out and copper withdrawn, although that is not for some                               62                                     41          18
    years yet                                                                         0
                                                                                           BT retail*   Virgin        Sky         TalkTalk Vodafone         Other        Total
                                                                                                        Media
                                                                                      Dec-19     Mar-20    Jun-20     Sep-20      Dec-20                                *Includes EE.
                                                                                                                                                           Sky figures are estimates.
                                                                                                                        Virgin Media is 30Mbps+ and others are all fibre connections.
                                                                                                                                          [Source: Enders Analysis, company reports]

                                                                                    High speed penetration of broadband bases
                                                                                    100%

                                                                                     80%

                                                                                     60%

                                                                                     40%

                                                                                     20%

                                                                                      0%

                                                                                           BT retail*       Virgin Media           Sky         TalkTalk        Vodafone
                                                                                                                                                                        *Includes EE.
                                                                                                                                           [Source: Enders Analysis, company reports]

                                                                                    The recovery stutters: UK broadband, telephony and pay TV trends Q4 2020 [2021-033]          15
Q4 2020 trends: line rental nets add turn back positive, in spite of themselves

•   Line rental net adds continued to improve, returning to positive figures for      Line rental net additions (000)
    both BT and the market as a whole
                                                                                      120
•   While line rental volumes have recovered, it is still mostly taken as part of a   100
                                                                                                                                                                      72
    broadband package for the purpose of broadband, with improved                      80
                                                                                       60
    broadband volumes driving the improvement in line rental. Indeed, the              40
    decline in BT’s line rental only base continues to be steady and in line with      20                                             5
    recent quarters                                                                     0
                                                                                      -20             -2                                                                              -7
•   Comments from the operators suggest that call volumes are still declining         -40                                                             -29
                                                                                      -60
    as fast if not faster than in the past, as many consumers have been               -80                            -58
    introduced to more modern forms of communication during lockdown such                     BT retail* Virgin Media              Sky        TalkTalk             Other          Total
    as video calling for work purposes, and continued using these for personal
                                                                                                                                                                                 *Includes EE.
    purposes                                                                            Dec-19     Mar-20      Jun-20       Sep-20        Dec-20                             Organic net adds.
                                                                                                                                                                  Figures are residential only.
                                                                                                                                                   [Source: Enders Analysis, company reports]

                                                                                      Line rental subscriber growth
                                                                                      1.2%
                                                                                                                                     1.0%
                                                                                      1.0%
                                                                                      0.8%                    0.7%          0.7%
                                                                                                                     0.7%
                                                                                                                                            0.6%     0.6%
                                                                                      0.6%                                                                  0.5%

                                                                                      0.4%
                                                                                      0.2%     0.1%                                                                 0.1%
                                                                                                                                                                           0.0%
                                                                                      0.0%
                                                                                      -0.2%           -0.1%                                                                       -0.1% -0.1%

                                                                                                                                               [Source: Enders Analysis, company reports]

                                                                                      The recovery stutters: UK broadband, telephony and pay TV trends Q4 2020 [2021-033]                  16
Q4 2020 trends: pay TV bounces back, outlook positive for 2021

•   Pay TV net adds had a very strong quarter, largely due to a strong           Pay TV net additions (000)
    performance at Sky, which was in turn largely driven by NOW TV
                                                                                  200                                                    150
•   The NOW TV performance may be partly seasonal, and is in any case             150                                                                                              108
    unlikely to repeat every quarter, but we believe that the overall trend in    100
    2021 will be better than 2020, with Virgin Media having launched its new       50
    ‘Virgin TV 360’ platform and all providers offering multiple SVODs              0
                                                                                  -50                -10                                                      -5
    incorporated into their platforms either fully bundled or available as an                                          -28
                                                                                 -100
    add-on
                                                                                 -150
                                                                                 -200
                                                                                           BT retail*      Virgin Media†           Sky             TalkTalk                Total

                                                                                    Dec-19     Mar-20      Jun-20     Sep-20     Dec-20                                *Includes EE.
                                                                                                            †Virgin Media net adds include free ‘M’ tier subscribers not taking TiVo.
                                                                                                                                                                   Organic net adds.
                                                                                                                                        [Source: Enders Analysis, company reports]

                                                                                 Pay TV subscriber growth
                                                                                 6%
                                                                                 4%
                                                                                 2%
                                                                                 0%
                                                                                 -2%
                                                                                 -4%
                                                                                 -6%
                                                                                 -8%
                                                                                   Dec-18 Mar-19 Jun-19             Sep-19    Dec-19 Mar-20 Jun-20                 Sep-20    Dec-20
                                                                                        BT retail*         Virgin Media          Sky           TalkTalk            Total
                                                                                                                                                                      *Includes EE.
                                                                                                                                         [Source: Enders Analysis, company reports]

                                                                                 The recovery stutters: UK broadband, telephony and pay TV trends Q4 2020 [2021-033]                17
1. Market trends and outlook
2. Appendix

                               The recovery stutters: UK broadband, telephony and pay TV trends Q4 2020 [2021-033]   18
Broadband subscribers

 Broadband subscribers and net adds

                                      Subscribers (000)                                                                    Net adds (000)

                    Dec-19    Mar-20       Jun-20         Sep-20   Dec-20                       Dec-19          Mar-20          Jun-20           Sep-20          Dec-20

BT retail*          9,131     9,116        9,117          9,115    9,203                          -13             -14               1              38               48

Virgin Media†       5,271     5,279        5,318          5,365    5,420                            2               8              39              47               55

Sky**               6,105     6,104        6,036          6,037    6,047                           27               0              -68              0               10

TalkTalk            4,241     4,248        4,228          4,176    4,144                          -35               7              -20             -52             -32

Vodafone             687       751          793            838      876                            20              64              74              45               38

Others              1,771     1,831        1,943          2,025    2,093                          123              60              80              82               68

Total               27,205    27,330      27,435      27,596       27,782                         124             125             105              161             186

                                                                                                                                                          Organic net adds.
                                                                                                                                                     *BT retail includes EE.
                                                                                                                                      †Virgin Media cable households only.
                                                                       **Excludes Ireland; Ireland subscribers estimated in latest quarter, otherwise reported by ComReg.
                                                                                                                                [Source: Enders Analysis, company reports]

                                                                           The recovery stutters: UK broadband, telephony and pay TV trends Q4 2020 [2021-033]           19
Consumer revenue

 Consumer revenue and revenue growth

                               Consumer revenue (£m)                                                                  Growth

                  Dec-19    Mar-20     Jun-20    Sep-20   Dec-20                       Dec-19         Mar-20           Jun-20         Sep-20          Dec-20

BT retail*         1,114    1,103      1,047     1,037    1,035                         -5.4%          -4.1%           -6.1%           -7.9%           -7.1%

Virgin Media†       869      860        837       850      852                          1.8%            1.1%           -1.8%           -0.1%           -2.0%

Sky**              1,948    1,854      1,819     1,981    1,929                         2.5%           -1.7%           -6.5%            0.5%           -1.0%

TalkTalk‡           313      309        295       296      299                          -1.9%          -3.7%           -7.8%           -5.1%           -4.4%

Total              4,244    4,127      3,999     4,162    4,114                         -0.2%          -1.9%           -5.6%           -2.3%           -3.1%

                                                                                                                               *Includes BT Sport direct revenue.
                                                                                                               **Virgin Media UK cable, includes SOHO revenue.
                                                                                                                                       †Includes UK and Ireland.
                                                                                      ‡Includes wholesale and business revenue but excludes corporate revenue.
                                                                                                                      [Source: Enders Analysis, company reports]

                                                                  The recovery stutters: UK broadband, telephony and pay TV trends Q4 2020 [2021-033]         20
In/out-of-contract and existing/new customer pricing

•   The charts opposite show the pricing differential for customers who are in   Unlimited entry level broadband, in/out-of-contract pricing
    contract versus customers who are out of contract, based on current new
    customer pricing and current list pricing for those out-of-contract          £60
                                                                                                                          £51.00
                                                                                 £50

                                                                                 £40                £36.99
                                                                                                                                                                        £30.00
                                                                                           £27.99               £27.99                          £27.00
                                                                                 £30                                                   £25.00
                                                                                                                                                               £22.95

                                                                                 £20

                                                                                 £10

                                                                                 £0
                                                                                            BT retail           Virgin Media                Sky                  TalkTalk
                                                                                                                                                        Pricing includes line rental.
                                                                                   In-contract price     Out-of-contract price     BT and Virgin Media include free weekend calls.
                                                                                                                                                Prices valid on 30 November 2020.
                                                                                                                                      [Source: Enders Analysis, company websites]

                                                                                 Unlimited high-speed broadband, in/out-of-contract pricing
                                                                                 £60
                                                                                                                          £51.00
                                                                                 £50
                                                                                                    £36.99
                                                                                 £40
                                                                                                                                                £32.00
                                                                                                                                                                        £29.95
                                                                                           £27.99                £27.99
                                                                                 £30                                                   £26.00
                                                                                                                                                               £23.50

                                                                                 £20
                                                                                 £10
                                                                                  £0
                                                                                            BT retail           Virgin Media                Sky                  TalkTalk
                                                                                   In-contract price     Out-of-contract price                          Pricing includes line rental.
                                                                                                                                   BT and Virgin Media include free weekend calls.
                                                                                                                                                Prices valid on 30 November 2020.
                                                                                                                                      [Source: Enders Analysis, company websites]

                                                                                 The recovery stutters: UK broadband, telephony and pay TV trends Q4 2020 [2021-033]             21
Front/backbook pricing differential from Ofcom

•   The chart opposite shows the pricing differential between out-of-contract   September 2019 pricing differential figures (£/month)
    and new customers and out-of-contract and re-contracted customers by
    broadband provider in September 2019, based on actual average prices        £16
                                                                                                                                                                      £14.08
    paid within the customer bases                                              £14
                                                                                                                                                                              £12.00
                                                                                       £11.42
                                                                                £12
                                                                                                     £9.33 £9.33                                      £9.33
                                                                                £10                                 £8.50
                                                                                                                                    £7.50                     £8.00
                                                                                £8
                                                                                                                            £6.17           £6.17
                                                                                £6
                                                                                             £4.25
                                                                                £4
                                                                                £2
                                                                                £0
                                                                                          BT           EE        Plusnet      Sky        TalkTalk Virgin Media
                                                                                  Out-of-contract to new contract Out-of-contract to re-contracted
                                                                                                                                                    [Source: Enders Analysis, Ofcom]

•   The chart opposite shows the pricing differential between out-of-contract   November 2018 pricing differential figures (£/month)
    and new customers and out-of-contract and re-contracted customers by
                                                                                £12                                                                   £11.42
    broadband provider in November 2018, based on actual average prices                £10.58                                                               £10.58
    paid within the customer bases                                              £10
                                                                                                                    £7.83                                                     £7.75
                                                                                 £8
                                                                                            £6.25          £6.25                                                      £6.75
                                                                                                      £5.92                         £5.75
                                                                                 £6                                         £5.42
                                                                                                                                            £4.58
                                                                                 £4

                                                                                 £2

                                                                                 £0
                                                                                           BT             EE         Plusnet           Sky             TalkTalk       Virgin Media
                                                                                      Out-of-contract to new contract          Out-of-contract to re-contracted
                                                                                                                                                    [Source: Enders Analysis, Ofcom]

                                                                                The recovery stutters: UK broadband, telephony and pay TV trends Q4 2020 [2021-033]               22
Wholesale price control and Openreach’s new discounted pricing

•   From 1 April 2018 Openreach’s 40/10 FTTC-based product was price             Openreach wholesale pricing (£/month, excluding VAT)
    regulated for the first time, reducing its cost to £5.80 a month, and with
    other charges remaining unchanged the 80/20 premium increased to £4.15       £20
                                                                                                  £16.98                         £17.07
                                                                                 £18
    a month
                                                                                 £16              £2.55
                                                                                                                                  £4.15                    £13.11
•   Openreach’s volume discount offer, discussed in more detail in BT Q1         £14
                                                                                                                                                           £1.00
                                                                                 £12
    2018/19 results: On target in the short term, making progress for the long                    £7.40
                                                                                 £10                                              £5.80                    £4.99
    term [2018-074], further reduces these premia to £4.99 and £1.00              £8
                                                                                                                Products
                                                                                                                 under
    respectively if the full discount is achieved                                 £6                              price
                                                                                  £4              £7.03                           £7.12                    £7.12
                                                                                  £2
                                                                                  £0
                                                                                          Before price control             After price control    After Openreach's
                                                                                                                                                   volume discount
                                                                                    Copper access          FTTC 40/10       Premium for FTTC 80/20
                                                                                                                                                  [Source: Enders Analysis, BT]

                                                                                 The recovery stutters: UK broadband, telephony and pay TV trends Q4 2020 [2021-033]       23
Subscriber and subscriber ARPU growth

•   The chart opposite shows year-on-year growth rates of subscribers (i.e.         Average subscriber growth by operator
    household subscriptions to any product) for the Big 4 fixed line operators in
    the UK                                                                           5%
                                                                                     4%
                                                                                     3%
                                                                                     2%
                                                                                     1%
                                                                                     0%
                                                                                    -1%
                                                                                    -2%
                                                                                    -3%
                                                                                    -4%
                                                                                      Dec-18 Mar-19 Jun-19           Sep-19     Dec-19 Mar-20 Jun-20             Sep-20    Dec-20
                                                                                             BT Consumer              Virgin Media               Sky          TalkTalk
                                                                                                                                                Growth is not adjusted to be organic.
                                                                                                                                          [Source: Enders Analysis, company reports]

•   The chart opposite shows the average revenue per subscriber year-on-year        Subscriber ARPU growth by operator
    growth for the Big 4 fixed line operators in the UK, including a line for BT
    Consumer excluding BT Sport direct revenue                                       6%
                                                                                     4%
                                                                                     2%
                                                                                     0%
                                                                                    -2%
                                                                                    -4%
                                                                                    -6%
                                                                                    -8%
                                                                                      Dec-18 Mar-19 Jun-19           Sep-19     Dec-19 Mar-20 Jun-20             Sep-20    Dec-20

                                                                                           BT Consumer             Virgin Media            Sky          TalkTalk

                                                                                                 BT financials prior to June 2017 quarter are based on different accounting standards.
                                                                                                                                *Excludes estimated direct revenue impact of BT Sport.
                                                                                                                                           [Source: Enders Analysis, company reports]

                                                                                    The recovery stutters: UK broadband, telephony and pay TV trends Q4 2020 [2021-033]          24
Big 4 versus smaller player broadband growth

•   Four years ago, broadband market subscriber growth very closely mirrored       Broadband net adds (000)
    that of the Big 4 players, both of which were growing at a very healthy 3-4%
                                                                                   800
•   Since then, market growth has slowed, and the gap between the top four
    player growth and the market has grown considerably due to a number of         600
    factors:
                                                                                   400
       ⎻ Vodafone has become a much more significant player in the market,
         and, although it slowed slightly in 2019, it has been pushing harder      200
         than ever in early 2020
       ⎻ ‘Other DSL’, i.e. smaller ISPs who source connectivity at least in part      0
         directly from Openreach (not via TalkTalk), has been becoming
                                                                                   -200
         increasingly significant, with a number of providers becoming high
                                                                                               Big 4          Vodafone        Other DSL           Other            Total
         speed-only, thus removing the requirement to use
         complex/messy/fault-prone local loop unbundling products                     2016      2017     2018      2019     2020
                                                                                                                                       [Source: Enders Analysis, company reports]
         (MPF/SMPF)
       ⎻ The growth of alternative ‘full fibre’ providers has also taken some      Broadband subscriber growth
         share from the market. Although many remain very small, and all have
         struggled to achieve strong take-up, in a slow growth market they are      4%
         nonetheless significant                                                    3%

                                                                                    2%

                                                                                    1%

                                                                                    0%

                                                                                   -1%

                                                                                               Big 4              Total                [Source: Enders Analysis, company reports]

                                                                                   The recovery stutters: UK broadband, telephony and pay TV trends Q4 2020 [2021-033]      25
Ofcom broadband complaints

Broadband complaints per 100,000 customers

50

45

40

35

30

25

20

15

10

 5

 0
 Sep-17   Dec-17    Mar-18    Jun-18     Sep-18   Dec-18       Mar-19     Jun-19        Sep-19       Dec-19         Mar-20          Jun-20           Sep-20

           BT           Sky            TalkTalk            Virgin Media            EE                  Plusnet                   Industry average

                                                                                                                             [Source: Ofcom, Enders Analysis]

                                                                               The recovery stutters: UK broadband, telephony and pay TV trends Q4
                                                                                                                                                         26
                                                                                                                                  2020 [2021-033]
Pricing outside the ‘top four’

•   The chart below compares unlimited broadband prices from a wider
    selection of operators

•   The cheapest available unlimited broadband packages offered on the
    operator websites are shown, with differing ‘free calls’ packages illustrated
    with colours if available

Unlimited broadband dual-play, new customer pricing (£/month)
                                                                                                                                                                             £28.99
     £30                                                                                                                                           £27.99       £27.99
                                                                                                                                      £25.00
     £25                                                                                         £22.00
                                                                                                             £22.95       £23.00
                                                                                       £21.50
                                                                 £19.99       £20.00
                          £18.90   £18.95    £18.99    £18.99
     £20     £18.00

     £15

     £10

      £5

      £0

       No bundled calls     Free weekend calls Free weekend & evening calls
                                                                                                                                Includes line rental, excludes all temporary price reductions.
                                                                                                       Prices are lowest available unlimited broadband on each brand as of 29 March 2021.
                                                                                                                                                [Source: Enders Analysis, company websites]

                                                                                         The recovery stutters: UK broadband, telephony and pay TV trends Q4 2020 [2021-033]             27
New customer pricing outside the ‘top four’

•   The chart opposite shows new customer pricing at providers outside the
    top four over the last two years                                         Pricing outside the ‘top four’ (£/month), lowest price available

                                                                             35

                                                                             30

                                                                             25

                                                                             20

                                                                             15

                                                                             10

                                                                              5

                                                                             0
                                                                             Mar-19     Jun-19 Sep-19       Dec-19 Mar-20 Jun-20            Sep-20    Dec-20 Mar-21
                                                                                       Post Office                 DirectSave                        Origin
                                                                                       POP                         Plusnet                           John Lewis
                                                                                       SSE                         Vodafone                          Utility Warehouse
                                                                                       Average
                                                                                                                                    March 2021 prices as at 29 March 2021.
                                                                                                                                [Source: Enders Analysis, company websites]

                                                                             The recovery stutters: UK broadband, telephony and pay TV trends Q4 2020 [2021-033]      28
‘Top four’ ultrafast broadband pricing for new customers

•    The chart opposite and table below show pricing for ultrafast broadband   Ultrafast offers and pricing by provider, £ per month
     packages for new customers at the ‘top four’ providers
                                                                               70
                                                                               60
                                                                               50
                                                                               40
                                                                               30
                                                                               20
                                                                               10
                                                                                0
                                                                                             BT              Virgin Media              Sky                TalkTalk
                                                                                 100Mbps-150Mbps         200Mbps                  300Mbps-350Mbps
                                                                                 500Mbps                 900Mbps-1Gbps                              Prices on 29 March 2021.
                                                                                                                                  [Source: Enders Analysis, company websites]

    Ultrafast broadband pricing by provider

                     100Mbps         150Mbps         200Mbps         250Mbps    300Mpbs            350Mbps            500Mbps            900Mbps               1Gbps

    BT                £39.99                                                        £49.99                                                   £59.99

    Virgin Media      £27.99                           £33.99                                        £39.99             £45.99                                  £66

    Sky                                 £35

    TalkTalk                          £29.95                                                                              £40

                                                                                                                                                  Prices on 29 March 2021.
                                                                                                                                [Source: Enders Analysis, company websites]

                                                                               The recovery stutters: UK broadband, telephony and pay TV trends Q4 2020 [2021-033]      29
Summary of recent price rises

2021 price rises

         Product line        Date effective                                                      Price change details

             BT

 Broadband and line rental    March 2021      - Price rise of CPI + 3.9%

             Sky
 Broadband                    1 April 2021    - Sky Broadband Essential (11Mbps package) to rise in price by £3 per month, a 14% rise for in-contract customers
 TV                                           - Sky Broadband Superfast price will rise by £1 per month, a 4% increase for in-contract customers
                                              - Sky Signature TV price will rise by £1/month, a 4% increase for in-contract customers
                                              - Sky TV Multiscreen to rise in price by £1 per month, an 7% rise for in-contract customers
                                              - Sky HDTV price will rise by £1 per month, a 17% increase for in-contract customers
 Calls                        1 May 2021      - Sky Talk Anytime Extra price will rise by £2 per month, a 20% increase for in-contract customers
                                              - Sky Talk International Extra price will rise by £2 per month, a 17% increase for in-contract customers
         Virgin Media

 All customers                March 2021      - Average price increase of £3.63 per month, or 4%, with most between £2.50-4.50

          TalkTalk

 Broadband                   1 April 2021     - Broadband customers who contracted before 10 November 2020, excluding those in ‘Fixed Price Plus’ tariffs and
                                              vulnerable customers, will see prices rise by £2/month
                                                                                                                              [Source: Enders Analysis, company websites]

                                                                           The recovery stutters: UK broadband, telephony and pay TV trends Q4 2020 [2021-033]      30
Summary of recent price rises

2020 price rises

         Product line        Date effective                                                    Price change details

             BT
 Broadband and line rental    March 2020      - CPI-linked price rise of 1.3% for customers who signed up or re-contracted between 11 January 2019 and 16
                                              January 2020

             Sky
 Broadband                    1 April 2020    - Sky Broadband Essential (11Mbps package) to rise in price by £2 per month, a 10% rise for in-contract customers
 TV                                           - Sky Entertainment price will rise by £2 per month, a 9% increase for in-contract customers
                                              - Sky TV Multiscreen to rise in price by £1 per month, an 8% rise for in-contract customers
                                              - Sky HDTV price will rise by £1 per month, a 20% increase for in-contract customers

         Virgin Media

 All customers                    n/a         - Delayed its 2020 price rise due to the pandemic

          TalkTalk

 Calls                       January 2020     - Unlimited calls boost price rise of £2, a 20% increase

                                                                                                                            [Source: Enders Analysis, company websites]

                                                                         The recovery stutters: UK broadband, telephony and pay TV trends Q4 2020 [2021-033]      31
Summary of recent price rises

2019 price rises

         Product line            Date effective                                                      Price change details

              BT

 All customers                                    -   No price rises in 2019

              Sky
 Broadband                        1 April 2019    - Broadband to increase £1.00, Fibre to increase £2.00 across all packages
 Calls                                            - Talk Evening and Weekends to increase £1.00, Anytime to increase £2.00
 TV                                               - £2.00 increase for Entertainment, Cinema increases £1.00 for those out of contract
                                                  - Q Multiscreen to increase £1.00

          Virgin Media

 All customers                   September 2019   - Average price increase of 4.9% across customers or £3.30 more
 Broadband solus                                  - £3.50 increase

           TalkTalk

 Broadband                       1 August 2019    - Simply broadband increased 6% to £32.95
 TV                                               - Essentials TV increased 4% to £34.95

 Calls                            1 June 2019     - Unlimited calls boost increased 18% to £10.00, customers on fixed low price plans also affected
 Broadband (incl. line rental)                    - Fast broadband increased 11% to £30.00
                                                  - Faster fibre increased 7% to £36.00

                                                                                                                                  [Source: Enders Analysis, company websites]

                                                                               The recovery stutters: UK broadband, telephony and pay TV trends Q4 2020 [2021-033]      32
Summary of recent price rises

2018 price rises

         Product line              Date effective                                                    Price change details

              BT
 Broadband (incl. line rental)   16 September 2018   - 4-7% increase
 Line rental                                         - £1.00 increase for BT line rental customers with broadband from another operator
 Calls                                               - 5-12% increase
 TV                                                  - Between £1.00 and £2.00 increase to all packages
 Sport                                               - £2.50 increase for BT TV customers to £6.00
                                                     - For non-BT broadband customers, 8% increase to £27.99
                                                     - For BT broadband customers, 20% increase to £12.00
 Broadband (incl. line rental)    7 January 2018     - 5-6% increase
 Calls                                               - 5-8% increase to calls ppm and call set-up fee
 Sport                                               - For non-BT broadband customers increased by 13% to £25.99
                                                     - For BT broadband customers increased by 33% to £10.00
              Sky
 Broadband (incl. line rental)      1 April 2018     - 4% increase for customers on unlimited ADSL broadband and limited fibre (38Mbps)
 TV                                                  - £1.50 increase for customers on legacy TV packages
                                                     - £0.50 increase for Sky Sports
          Virgin Media

 All customers                    November 2018      - Average price increase of 4.5% across customers
 Triple and dual-play                                - £3.49 increase
 Broadband solus                                     - £2.99 increase

           TalkTalk

 Broadband (incl. line rental)       July 2018       - Simply broadband increased 5% to £31.20
 TV                                                  - Plus TV increased 3% to £43.95
                                                     - Essentials TV increased 5% to £33.70
                                                     - Unlimited calls boost increased 18% to £10.00, customers on fixed low price plans also affected
                                                                                                                                  [Source: Enders Analysis, company websites]

                                                                               The recovery stutters: UK broadband, telephony and pay TV trends Q4 2020 [2021-033]      33
Summary of recent price rises

2017 price rises

         Product line             Date effective                                                   Price change details

               BT
 Broadband (incl. line rental)     2 April 2017    -   Up to 5-6% price increase for existing customers
 Calls                                             -   Up to 6-11% increase to calls ppm and call set-up fee
 Sport                                             -   Sport for non-BT broadband customers increased by 5% to £22.99
                                                   -   For BT broadband customers Sport increased by 25% to £7.50
                                  1 August 2017    -   BT TV customers started being charged £3.50 for BT Sport
               Sky
 Broadband                        1 March 2017     -   Majority of existing customers’ prices increased 33% to £10.00
 Line rental                                       -   Line rental increased by 9% to £18.99
 TV                                                -   £1.00-£3.00 increase for customers on legacy TV pricing
 Calls                             1 April 2017    -   12% increase to call connection fee
                                                   -   9% increase to UK calling out-of-bundle
                                                   -   68% increase daytime calls to mobile
           Virgin Media

 Bundles                         1 November 2017   -   Average price increase of 4.7% across customers
                                                   -   Triple-play and dual-play broadband and phone bundles increased by between £1.99 and £3.99
 Broadband solus                                   -   Broadband-only customers pay either £1.99 or £2.99 extra

            TalkTalk

 Broadband (incl. line rental)    1 August 2017    -   Simply broadband increased 6% to £29.70
                                                   -   Essentials broadband & TV increased 6% to £32.20
                                                   -   Plus broadband & TV increased 4% to £42.20
 Calls                                             -   11% increase to standard call connection fee and 40% increase to premium connection fee
                                                   -   8% increase to UK calling out-of-bundle
                                                                                                                                [Source: Enders Analysis, company websites]

                                                                             The recovery stutters: UK broadband, telephony and pay TV trends Q4 2020 [2021-033]      34
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