With the end of the Affordable Connectivity Program, subscribers are increasingly price-sensitive

The end of the ACP has caused internet households to look for lower-cost plans, including unbundled standalone home internet. Adoption of value-added services is dropping as a growing percentage of subscribers look for the best possible deal.

• Leading internet service including Comcast providers launched lower-cost internet plans to target low-income households, offering pared-down service packages with lower speed tiers. Mobile fixed-wireless providers are similarly offering low-cost internet packages bundled with their mobile services. These plans have been largely successful in mitigating subscriber loss.
• The Universal Service Fund is currently at-risk, and its loss may cause further pricing pressure in the market. The Supreme Court is set to examine its constitutionality in 2025, and the incoming administration has shared plans to revisit the fund – either repealing it entirely or changing the funding mechanism. This would impact not just low-income households, but also schools and libraries which rely on the USF to offset broadband costs.
• Guaranteed pricing and service quality offers – such as Spectrum’s recent ‘Customer Commitment’ initiative, are increasingly seen as desirable by customers, in particular recent searchers.

Changing customer expectations are impacting interest in service bundles, with more price-sensitive consumers willing to go without in the search for the best deal. It is likely that 2025 will see an intensification of these trends, especially if the Universal Service Fund is impacted.

According to Parks Associates research, nearly a quarter of US internet households reported looking for an ISP in the past year.

Roughly half of these searchers reported experiencing difficulties with at least one aspect of searching for a new internet service provider. Searchers reported the most difficulties in comparing the service tiers against different providers in their area, and especially in evaluating customer service and reliability.

Notably, no tested aspect was seen as ‘very easy’ for a majority of searchers, with only two aspects – finding which ISPs service their home and finding an ISP with suitable speeds – breaking the 40% mark.

Internet service providers can do more to streamline the searching process for prospective customers. Comparative tables showing plans vs. those of competitors can prospective customers more easily evaluate the pros and cons.

This is an excerpt from Parks Associates research report New Competition in Broadband: 5G Home Internet & Fiber.

The market dynamics for residential broadband in the US market are changing. As competition ramps up across the country, internet service providers face new questions around how to best attract and retain subscribers and grow additional revenue streams.

This report examines the impact of 5G home internet and fiber rollouts on the competitive landscape, as well as quantifies the impact of the end of the Affordable Connectivity Program on consumer decision-making. It investigates changing consumer attitudes and perceptions of service quality, willingness to pay for tested packages, and the consumer shopping journey.

Key questions addressed:

1. To what degree has the end of the ACP impacted consumer broadband adoption?
2. What consumer demand exists for low-cost broadband solutions?
3. How has consumer perception of 5G, fiber, and satellite evolved?
4. What new value-added service concepts are consumers interested in?
5. How do consumers find and evaluate prospective internet service providers?

Interested in how research can help your company advance to its goals? Contact me or visit www.parksassociates.com for more info