Customers Are Ready For Water Competition

Domestic and business customers are waiting for the water industry to catch up

New research shows strong support amongst customers in England and Wales for the introduction of competition in water services, with many thinking it should be introduced within the next year.

Surveys of domestic and business customers conducted by MORI on behalf of British Gas reveal that nearly half of domestic customers (47%) support the introduction of competition, compared with two in ten opposed (21%). In the business market, three-quarters want competition compared with one sixth against (75% versus 17%).

The research shows that satisfaction with the value for money of water services is lower than for other utility services.

The domestic customer view: "It's worked for other utilities: why not for water?"

MORI qualitative research finds that domestic customers realise that it is not only those that have switched energy supplier that have benefited from competition. Non-switchers have seen their bills drop, and would expect the same effects in the water industry.

Most are satisfied with the value for money of their gas and electricity supplies (net satisfaction ratings of +74 and +75), but water services rate significantly lower (+58).

A third say they would be likely to switch if competition were introduced (32%), but more would expect to see the benefits: nearly six in ten expect that it will lead to lower prices (57%). Other benefits are expected to include better quality water (17%) and improved customer service (9%).

The business customer view: "I can choose my other suppliers: why not water services?"

The non-domestic market shows the greatest demand for competition, with more than nine in ten larger companies supporting its introduction as soon as possible (92%).

As with domestic customers, satisfaction with the value for money of water services (+50) is lower than gas (+63) or electricity (+69). There is significant potential for companies to switch, with fewer than one in ten large companies certain to stay with their current water supplier. As in the domestic market, most of those likely to switch expect to pay lower prices (81%).

The Government has indicated that it will be consulting on the next steps towards competition in the water industry early in the new year.

These MORI surveys show that, despite relatively high levels of satisfaction with operational and customer service standards, they do not see this as a reason to delay the introduction of competition. Customers equate competition with lower prices; and they are waiting for the water industry to catch up with them.

• MORI interviewed 1,002 domestic water services customers, in-home, between 16th and 27th September 2000. Data have been weighted to the profile of the population of England and Wales as a whole
• MORI interviewed 605 non-domestic water services customers, by telephone, between 3rd and 17th October 2001. Data have been weighted to the known profile of sampled businesses in England and Wales
• Net satisfaction is the % satisfied minus the % dissatisfied