Increased competition flows into the water market

21st Sep 2016

Water regulator Ofwat has announced proposals to enable customers to choose their water supplier. The restructuring of the current system would encourage new suppliers to enter the market, who will be able to buy water in bulk from existing suppliers and sell it on to customers, possibly as part of a package deal that includes other services such as gas and electricity.

Ofwat acknowledges that reductions in customer bills are possible but likely to be small, particularly in the short term. The largest benefit to customers as a result of the proposed restructuring would be that it could lead to innovation and improved customer service through new offers. Its research also revealed that 56% of customers think being able to choose their water supplier would be a good thing.

This complements the findings of the Institute’s latest UK Customer Satisfaction Index, which found that in the utilities sector there has been both an increase in customers seeking premium service and a decline in the number of those who prioritise a basic service at a lower price. The Institute’s findings suggest that competition, regulation and a focus on customer experience in many organisations are influencing the way customers choose and consume utilities services.

“The Government is focused on improving switching and ensuring that this is made easier in sectors where there is a need for greater choice, competition and consumer empowerment,” says Jo Causon, the Institute’s chief executive. “But when it comes to helping consumers switch providers, price is not the only factor, and it is increasingly customer service that drives consumer behaviour.” 

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