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Cheap trumps fast or bundled as reason to pick ISP

Source: Roy Morgan Single Source (Australia), Australians 14+ with home internet connection who joined current ISP within last 12 months. March 2012 – August 2012 n = 1438, March 2013 – August 2013 n =1190

Among consumers that chose their current Internet Service Provider (ISP) within the last 12 months, by far the most common reason for the choice was to get a cheaper or better deal (46%)—a lure to almost 2.5 times as many consumers as faster connection speed (19%), the latest research from Roy Morgan in the six months to August 2013 shows.  

Some of the other deciding factors are to bundle with other services (14%), recommendation from family or friends (14%), dissatisfaction with previous ISP (10%), the unavailability of former provider in current area (8%) and the offer of unlimited hours or downloads (7%).

Compared with the six months to August last year, deal-hunting has remained as predominant a factor but faster connection speed and bundling have declined 3% points each. Recommendations and unlimited plans are more often important now than last year, but the biggest proportional gain is a 3% point rise in new subscribers who chose their current ISP because the previous provider was unavailable at a new location. 

 Reasons to Choose Internet Service Provider: August 12 vs August 13

Source: Roy Morgan Single Source (Australia), Australians 14+ with home internet connection who joined current ISP within last 12 months. March 2012 – August 2012 n = 1438, March 2013 – August 2013 n =1190

Detailed data on Australian internet users’ preferences, priorities and choices show real differences between customers of the different providers. TPG has the highest proportion of new customers that chose it for a cheaper or better deal (74%), followed by Dodo (70%). Only 27% of Telstra’s recent internet customers picked it for cheaper rates—half the proportion that chose Optus for that reason.

The Reason is Price - by Provider 

Source: Roy Morgan Single Source (Australia), Australians 14+ with home internet connection who joined current ISP within last 12 months. March 2013 – August 2013, n = 1190.

George Pesutto, General Manager Media & Communications, Roy Morgan Research, says:

“With the recent review of the NBN and TPG announcing plans for its own urban fibre networks, there is a lot going on behind the scenes that will, in the months and years ahead, both reflect and affect what consumers expect from their internet service.

“With mass-market home internet adoption, it is up to the ISPs to differentiate themselves in order to attract new customers. TPG has clearly demarcated itself as a provider offering cheaper deals and high or unlimited data allowances—a growing market. TPG’s offering has increased its customer base and improving financial results.

“But it’s not all, or always, about price. While Dodo is also associated with cheaper deals, our research shows that consumers choose other ISPs for other reasons: Telstra for bundling other products and connection speed, iiNet for dissatisfaction with previous ISP and availability in area, and Optus for bundling and other incentives.”

Click here to view our extensive range of Internet Customer Profiles, including TPG, Dodo, iiNet and more, or our range of Media Profiles including internet, social media, television, pay TV, radio and more.  These profiles provide a broad understanding of the target audience, in terms of demographics, attitudes, activities and media usage in Australia.

For comments or more information please contact:

George Pesutto

Industry Director — Media

Office:   +61 (3) 9224 5206

Mobile: +61 414 686 987

george.pesutto@roymorgan.com

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About Roy Morgan Research

Roy Morgan Research is the largest independent Australian research company, with offices in each state of Australia, as well as in New Zealand, the United States and the United Kingdom. A full service research organisation specialising in omnibus and syndicated data, Roy Morgan Research has over 70 years’ experience in collecting objective, independent information on consumers.

In Australia, Roy Morgan Research is considered to be the authoritative source of information on financial behaviour, readership, voting intentions and consumer confidence. Roy Morgan Research is a specialist in recontact customised surveys which provide invaluable and effective qualitative and quantitative information regarding customers and target markets.

Margin of Error

The margin of error to be allowed for in any estimate depends mainly on the number of interviews on which it is based. Margin of error gives indications of the likely range within which estimates would be 95% likely to fall, expressed as the number of percentage points above or below the actual estimate. Allowance for design effects (such as stratification and weighting) should be made as appropriate.

Sample Size

Percentage Estimate

40%-60%

25% or 75%

10% or 90%

5% or 95%

5,000

±1.4

±1.2

±0.8

±0.6

7,500

±1.1

±1.0

±0.7

±0.5

10,000

±1.0

±0.9

±0.6

±0.4

20,000

±0.7

±0.6

±0.4

±0.3

50,000

±0.4

±0.4

±0.3

±0.2