We caught up with Plusnet’s Chief Executive Officer to discuss the merits and demerits of fibre broadband, the 4G spectrum auctions and the importance of honesty. Here’s what he said…
Why should consumers choose Plusnet’s fibre optic service over your rivals?
I think there are a few reasons. Firstly, our price. As with all your broadband products, we’re very challenging on price. It’s only £16.49 – that’s an aggressive price point and people should see value from it.
If I look at customer experience, there’s a couple of key points. We’ve been trialling fibre to the cabinet for the best part of a year and we’ve had nearly a thousand trialists across that time whose feedback has been really excellent. 96 per cent of them would recommend it. Lots of people have also seen their online behaviours and usage change in a very positive way. They’ve been making a lot more of the internet. And, although this isn’t strictly a differentiation necessarily versus others with a similar product, we’ve see 74 per cent of customers who were on the trial experience a real step change in their speed. Customers who were in the 2Mb to 12Mb space have been getting close to 30Mb.
The third point for me is that we work really hard on customer experience. We won the ISPA customer service award for the industry in the summer and we’re top again for customer service in uSwitch.com’s latest study too. JD Power have also announced this week that we’ve won for service.
So if you look, the combination of factors that I would suggest makes our product stand out are good value and good quality. And picking fibre out specifically, why fibre? It just makes much more of the internet: catch-up TV, multiple usage and experience overall has been really positive with our base.
Your fibre product undercuts BT’s of which you’re a part. How are you able offer that service for cheaper?
Well, with BT we’re a wholly owned subsidiary, but we trade independently. Therefore, we’re set up differently. Plusnet is an online-only company and that gives us a number of advantages.
One of the major benefits is that we can be more challenging and more efficient on our service. And when it comes to headline price we are cheaper. They’re offering a discount at the moment on the first three months, but overall we are still cheaper over the course of the contract. But it’s close, let’s put it that way.
What kind of changes in usage patterns have you seen among Plusnet Fibre trialists?
We’ve seen a big increase in the use of the internet for catch-up TV. Chat has increased, too. We’ve seen nearly double figures for both compared with standard broadband. And the really interesting one for us, and for consumers in general, has been the increase in people who have felt that their broadband is good enough for them to work from home. 13 per cent of the trialists were able to work much, much more from home.
So in terms of a lifestyle change, in bigger households there’s the fact that you can do multiple things at once. One of you could be watching iPlayer or Sky Player while someone else is downloading music and the person who’s watching the catch-up content doesn’t get jitter. That makes for a much better overall experience. It’s been really interesting to see how that’s taken hold.
The big broadband talking point right now is Ofcom’s call to reduce BT pricing for wholesale broadband prices. Do you think Ofcom is playing fair?
I think the broadband industry is competitive and very challenging. And I think if you look at regulation I would say that for the broadband and telephony markets, it’s driven better choice and competition for the consumer. So I think overall the consumer is the winner in these situations.
How much do you expect prices to fall by?
It’s not something I’m aware of in terms of what the wholesale pricing structure will be. In the broadband market particularly across this last quarter, if you include offers in pricing, you’ve got some pretty challenging price points for consumers. I can’t comment on the wholesale pricing, but I think what consumers can look forward to is a competitive marketplace with lots of interesting and challenging and compelling propositions. Anything from our fibre proposition to our price match policy on standalone broadband are perfect examples of that. We’ve gone beyond that actually just now we’re running a special whereby if you take a phone line with us for a year you can get broadband free for a year.
Do you think the 4G spectrum auction regulations go far enough in terms of fostering healthy competition?
4G isn’t something I’m so well versed on. We’re very much in the fixed space, although WiFi is an important attribute that we’re interested in looking at for the future. It’s difficult for me to have a position on it. But if it’s anything like 3G, the auction around it is likely to be very competitive if not quite as beneficial to the government’s coffers.
Plusnet and TalkTalk got entwined in a legal imbroglio over advertising claims they made comparing their offer to your product. Would you like to see an end to comparative advertising in broadband altogether?
I think what’s really interesting in the market in which we operate is that it is highly competitive and fast-moving and that makes it exciting and frustrating depending on which day of the week it is and what your competition is or isn’t doing. There is a lot of regulation in the space that I think goes a long way towards driving good controls on what people are able to advertise, so I think that on the whole it is clear for consumers.
What we like to do on a lot of the key topics is go a little bit further. So if I take broadband speed for example, which is certainly something that’s been in the press a lot recently, what we have chosen to do is be very transparent. If you sign up for broadband with us you get a speed estimate - at that point we’re not dissimilar to any of the competition. What we then do is follow up and confirm that speed estimate post-sale. And ten days later, by which time they should have a stable connection, we confirm their actual speed.
In terms of transparency, I’ve been working with Plusnet since August of last year [and in that time] we haven’t traded above the line in the up to 20Mb ADSL space. Instead what we’ve preferred to do is give our customers more of a personalised view, if that makes sense. That’s one of the ways that we’re looking to differentiate ourselves from the competition and from what I understand from our customers there’s a positive around the relative certainty they get.
Your advertising makes much of your commitment to good honest broadband. By extension, do you think broadband advertising isn’t honest?
The honesty point is very much integral to our values and the way we interact. For example, a customer who comes to our website can understand their usage in the month so that they manage their costs and see their phone charges that they’ve run up. We’re very transparent in what we do. If you need to ring the call centre but you don’t want to ring up and stand in a queue in case there is one, you can see that at a glance. Honesty for us is about our honesty with customers.
In terms of the marketplace, it’s probably easier for me to comment on things that we’re looking to do. There is a misunderstanding or different levels of understanding of what broadband is and what you can do with it and also what usage is and what you can do with it. What we’re trying to do with our customers, and you can see this with what we’re trying to do with our fibre on pre-registration, is explain the benefits of speed, explain the benefits of fibre being multi-usage but also how fast you can download something.
What we’re trying to do around usage is…we have a competitive really competitively priced product but you could say low-ish peak time usage but free and unlimited overnight. We actually see 30 per cent of our customers downloading overnight to take advantage of the unlimited offer and then use their usage allowance on their if you like peak-time, priority activities. For us, it’s about helping customers understand what they can do and how our products sit with them.
Are there any plans for a Plusnet mobile broadband offering?
That is an interesting area to look at. It’s clearly where most of the competition are at, but a lot of them will offer a different premium for that additional service. We’re focussed on a very challenging price point, but with benefits.
What was the rationale behind moving your customer support wholly to the UK?
Last year we won the ISPA award for customer service and that was based on half of our service centre in the UK and half within an outsourcer in South Africa. We were giving at least reasonable service to win that award. There’s always more to do, but [our service] was obviously considered very good.
Moving it back in November has offered us a couple of great opportunities which we’re working hard to seize on. We now have all of our business in one building, which means it’s so much easier to see what customers see and understand the processes we’re using and how they’re good or bad for customers in real time.
What we’ve also spent a lot of time on is looking at what is considered to be industry best service and using the opportunity to improve it. Has it improved it overall? Our customer service has improved. Is it a result of being totally in the UK? It’s hard to say. But certainly it has improved and the latest awards we’ve been lucky enough to win would suggest that the move has further helped us.