Despite Which? calling for telecoms firms to halt plans for these price rises, and regulator Ofcom proposing a ban on inflation-linked mid-contract price rises, many providers are still planning to shamelessly cash in on the hikes before the ban takes effect, adding between 2% and 3.9% on top of the Consumer Price Index (CPI) rate of inflation.
The combined impact of both bills going up at the same time could see customers facing an annual price increase of £60 per year - or exit fees that could cost a total exceeding £500. Our research shows that, across the board, these CPI-linked hikes mean affected customers essentially end up paying approximately the cost of a thirteenth month on top of their existing annual contract, despite not benefitting from any additional services for the extra cost.
Given many of these providers also increased customers' bills by around 14% in 2023, this is another blow for consumers trying to keep spiralling costs under control.
We're demanding big broadband and mobile phone providers drop hikes buried in the terms and conditions. Agree?How much could broadband and mobile prices increase?
To understand the impact of this year's price rises on broadband and Sim-only mobile customers, we analysed mobile industry market data and responses to a survey of over 3,000 broadband customers to to calculate the annual cost of these price rises for the average customer of each provider.
Of the major broadband providers using CPI as a basis for their price increases, our research found that the average BT customer will see the largest impact as a result of the price hikes - its 7.9% price increase could cost them an additional £35.92 per year.
TalkTalk has confirmed customers on its variable plans will face a slightly lower (7.7%) hike in percentage terms. Our research found this would result in a predicted £29.53 yearly hike for its average customer. This figure is disputed by TalkTalk.
Shell Energy Broadband has confirmed it will go ahead with a 6% increase - lower than its contracts allow for. This could result in an annual increase of £18.46 for its average customer.
The average Vodafone Sim-only mobile customer faces the biggest annual price hike of the major mobile providers. Its expected 7.9% increase means the average customer could face a £27.36 annual price hike from April 2024.
Meanwhile, the average EE Sim-only mobile customer faces a potential £24.84 hike, while the average Three Sim-only customer could see their annual bill increase by £19.20.
Use our price rise calculator to find out how your broadband or mobile bill might be affected this spring.
The other option? An exorbitant exit fee
Because these annual price rises are part of consumer contracts, customers have no choice but to pay the new, higher amount or to cough up for an eye-watering exit fee to terminate their contract - even though the price rises are based around inflation figures customers usually have no way of predicting when they first sign up.
Given the cost of living crisis, we don't think it's fair if the only way for people facing price rises to switch to a better deal is for them to have to pay exit fees that can cost hundreds of pounds. We calculated the exit fee the average customer of each provider with 12 months remaining on their contract would face so the annual price increases can easily be compared against the potential termination fees.
Broadband providers
BT: EE: Plusnet: Shell Energy Broadband: TalkTalk: Vodafone:Sim-only mobile providers
EE: Three: Vodafone:
Ofcom is planning to ban mid-contract price rises
Ofcom’s review of the pricing practice concluded that inflation-linked mid-contract price rise terms can cause substantial consumer harm by making it more complicated to choose a broadband or mobile deal, limiting consumer engagement in the market and reducing competition in the industry.
We think it is unconscionable that broadband and mobile providers are still planning to go ahead with this year's inflation-linked price rises, which will impact millions of people, even after the regulator declared this practice causes substantial consumer harm and proposed a ban.
We're calling for all providers to scrap this year's above-inflation hikes and implement Ofcom's proposals as soon as possible so new customers are not trapped in these unfair contracts.
Rocio Concha, Which? Director of Policy and Advocacy, said:'Telecoms providers must do the right thing by halting unfair price hikes immediately, rather than piling more misery on their customers.'
Read our and to end unpredictable mid-contract price rises.How the providers responded
BT EE Plusnet'Starting in early summer 2024 and ahead of the implementation of Ofcom’s final ruling, we’re introducing a pricing model aligned with Ofcom’s approach, moving away from a price rise calculation based on percentage figures and CPI, and instead offering our customers a predictable long-term view of their contract terms. Annually we expect this price increase to be £1.50 for mobile customers and £3 for broadband customers.'
Shell Energy Broadband TalkTalk Three Vodafone News, deals and stuff the manuals don't tell you.source https://www.which.co.uk/news/article/outrageous-price-rises-could-trap-telecoms-customers-between-60-price-hikes-and-500-exit-fees-afZC89v5MGpN