Broadband “Switchers”: Better Alternative, Impact of COVID-19, and Poor Speeds Driving Changes

by Elizabeth Parks | Oct. 21, 2021

Throughout 2020 and 2021, broadband service providers have been continually put to task to deliver an optimal-performing service at an affordable cost. Providers who could not produce results risked customers seeking out other services in their area to meet their needs and expectations.

Mobile service providers continue to experience similar challenges, though not as the levels seen by their home internet counterparts. On the video service side, consumption across a variety of sources continued at near all-time highs. TeleGeography has found that global internet bandwidth increased by 29% in 2021, bringing it back to "normal" levels compared to 2020's COVID-driven levels of 34%.  Many video consumers continue to migrate from higher-priced, restrictive traditional options to OTT services, forcing players to consider integrating online solutions to meet the audience where they most want to consume video content.

The demand for an enhanced in-home experience also drives acquisitions of fundamental computing, networking, and entertainment CE products.  NPS scores notably have increased across all services during the Pandemic, including mobile and pay-TV.

For consumers, compelling offerings from competitors, the impact of COVID-19, and performance issues are top drivers for “Switchers” to change providers, followed by unreliable service quality and service outages.  Upgrading to a higher-speed tier, either more expensive or for the same price, is the most common service change followed by replacing a provider-based modem/router with a third-party device.

Many households are resorting to upgrading their service to a higher-speed tier to meet the unprecedented internet consumption in the home.  Service providers need to continue to deliver a higher-performing tier that justifies the increased investment from those willing to upgrade. 

In addition, as economic concerns continue, some consumers may be forced to reduce their investment in broadband service either by migrating to a lower tier or seeking a better offer from another service provider. Overall, 66% of service “Switchers” and 70% of “Downgraders” are concerned about paying their monthly bills.

Attractive promotional and bundling offers for customers experiencing financial hardships is essential; otherwise, broadband risk losing internet subscribers and losing service revenue if customers choose to downgrade to a lower-cost tier.

For more information on Parks Associates broadband research, visit www.parksassociates.com


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