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Digital inclusion: new insights and finding a sustainable way forward


Digital inclusion has rightly been at the top of the agenda since the pandemic highlighted both its systemic importance, and that there are no quick fixes. And as inflation took hold, the cost of everything, including connectivity, has come under increasing scrutiny. 

Against this backdrop the telco industry has offered a range of social tariffs - discounted connectivity offers for those on a range of benefits.

Yet the numbers - how many are digitally included, especially how many have broadband, and the characteristics of who does and does not - have barely changed.  While there are some who call for a major drive to increase the uptake of social tariffs, the industry in increasingly warning this may not be sustainable if it requires a subsidy for many millions of households.  There is a risk to other important policy agendas, such as investment in new network rollout.

What is really going on?

To help answer this, over the summer BT Group commissioned three experts Frontier Economics, Yonder Consulting and charity AbilityNet, to provide insights into overlooked or misunderstood aspects of the challenge.

Together, they have found that:

  • One million households in the UK have incomes so low they cannot afford any connectivity at all. Most of this group are working age but not in work, so in the near term, only the Government can help them change this.
  • Two million people (21% of those currently eligible) live in households with sufficient income that they are unlikely to need the discount offered by social tariffs.
  • Many households eligible for social tariffs do have broadband, and are navigating the market well and so paying around £20 a month for it (the price Ofcom defines as a social tariff). This group know the importance connectivity in their lives and so prioritise it in their spending. Many are buying their broadband in a bundle with other services such as mobile or TV, which enables them to get this affordable price. They often say that they would not move to get a slight saving, as they value the other services they buy.
  • To support someone that has never used a digital device before on the journey to be confident and active in the digital world, high quality, tailored, one on one, consistent support is often needed. When this is provided it can be transformative. It is also essential to driving change: people do not want services they cannot use.

Earlier in the summer Enders Analysis published an independent note (where the previous three were commissioned by BT Group). Enders also identify that the numbers in acute need of support with the costs of connectivity are much lower than current eligibility.  They also quantify the risks of the current focus on uptake – calculating that with full uptake £1.5bn a year could be taken out of the industry and could increase prices for non-eligible customers by 20%.

What could be a better way forward?

BT Group makes the following suggestions:

1.     Policy makers should refocus their attention on the very low income households and consider public funding to support this group as a social policy priority.

2.     Ofcom should use a wider set of measures to track affordability, including not only tracking awareness and uptake of social tariffs, but also how many households pay £20 or less per month for their broadband (whether through a social tariff or a commercial product).

3.     Ofcom should ensure all operators offer a social tariff and that those tariffs meet the same minimum standard term so that all customers have a straightforward offer available to them, as a safety net, in what can be a fast-moving and complex market.  At the same time, policymakers should recognise that many customers will continue to get good or similar value from other low-priced commercial products: a mass migration of customers away from these products is not necessary.

4.     Policymakers should re-examine how to provide greater direct support to those who lack the skills and confidence to participate in the digital world, not all of whom are in low-income groups.

In the 21st Century this is a systemic challenge. The case for well-funded and well-designed policy interventions lies not just in the potential to transform lives but also in enabling the digital transition of public service like healthcare, and private services like banking. And so driving greater digital inclusion should be at the heart of the next Government’s agenda, both to empower citizens and support improved productivity and growth in the UK economy.

You can download the report in full  - Digital inclusion: New insights and finding a sustainable way forward 

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