06 October 2023 , 10:05
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Millions of broadband customers have been warned they could pay £150 more than they expected over two years due to “unpredictable” price rises.
Many of the biggest telecom firms raise prices every April in line with the Consumer Price Index (CPI) or the Retail Price Index (RPI) inflation plus 3%, 3.7% or 3.9% on top. Which? has now predicted how much BT, EE, Plusnet, Shell Energy, TalkTalk, Virgin Media and Vodafone customers could see their bills increase in 2024 and over the course of their contract, as it calls for broadband firms to end inflation-linked price rises.
Its findings are based on average contract prices from the Which? 2023 broadband survey, plus predicted inflation data. The consumer champion claims Virgin Media, BT and EE customers could see the biggest annual increases of £50.52, £43.68 and £43.68 respectively in the year from April 2024. Shell Energy Broadband customers could see the smallest annual price hike of £27.16 on average.
These hikes would come on top of the eye-watering price hikes of more than 14% many customers faced in 2023. Which? also calculated how much extra these two rounds of price hikes could cost a customer who took out a deal in January 2023 over the course of their 18 or 24 month contract.
TalkTalk currently mostly advertises 18 month contracts on their website while BT, EE, Plusnet and Vodafone all primarily advertise 24 month contracts. BT and EE customers who took out a contract in January 2023 could see some of the highest average price hikes of £147.43 and £147.31 across the course of their contract. Vodafone and Plusnet customers could see rises of £122.38 and £117.87 respectively.
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TalkTalk customers could see a smaller hike of £76.09 on average over the course of shorter 18 month contracts. Shell Energy Broadband did not apply its 2023 inflation-linked price hikes of 12.5% to customers who joined from January to March 2023. However, if a Shell Energy customer joined before January 2023, then Which? calculates they would pay an extra £45.27 a year.
Virgin Media did not use inflation-linked price hikes in 2023 but some customers’ prices did increase by an average of 13.8%. According to Virgin Media, customers who signed up after November 2022 would not have faced the ad hoc price rise in spring 2023.
Those on a fixed-price promotional deal - like those offered to new customers - would also not have seen the price hikes take effect until after their deal promotional ended. Which? claims a Virgin Media customer paying the average contract amount was subject to the ad hoc price hikes of 13.8%, they would pay an extra £67.07 a year from spring 2023 to spring 2024.
Which? is today launching its "The Right to Connect" campaign calling on all providers to not subject customers to "unpredictable" price rises next April. Rocio Concha, Which? Director of Policy and Advocacy, said: “From working and school to online banking and social media, a good broadband and mobile connection is essential to everyday modern life.
“That’s why it’s outrageous that unpredictable mid-contract price hikes have been allowed to continue in the telecoms industry for so long - especially when so many have been struggling to make ends meet during the cost of living crisis. Consumers must have certainty about the total cost of their contract.
“Which? is calling on all providers to do the right thing and cancel 2024’s above inflation price hikes. Ofcom should also use their review to finally ban these unpredictable mid-contract price hikes that harm consumers and undermine competition. Consumers need to know exactly how much their contract will cost when they sign up.”
A spokesperson for BT said: “We understand that price rises are never wanted nor welcomed but recognise them as a necessary thing to do given the rising costs our business faces.
“Our price rises are annual, contracted and transparent and we make this clear when customers sign up or renew their contract. With the average price increase just above £1 per week in 2023, and some of our customers exempt from the rise– we’re also doing all we can to ensure our services are accessible to the widest group of customers possible through our market leading social tariffs.”
A TalkTalk spokesperson said: “The regulated CPI-linked price rise in April 2023 was preventable. In order to prevent the same thing happening next April, we are again calling on Ofcom to act and reduce the wholesale increases that lead to these price rises. These are exceptional circumstances, and families and businesses across the UK need the regulator to act.”
A Virgin Media spokesperson said: “We are always clear and transparent with customers about any price increases. We wrote directly to all customers who received a price rise this year to notify them of their exact increase, and gave them the right to cancel without penalty within 30 days if they wished.
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“While we know that price changes are never welcome, against a backdrop of rising costs, increased usage and continued investment, we have openly and directly set out to customers that we are introducing inflation-linked price changes from April next year. This widely used format will provide more certainty on when and how any future increases will occur while fuelling the investment required to ensure we keep providing the fast and reliable connectivity our customers rely on.”
How to cut the cost of your broadband bill
If you're out of contract, you're free to leave and go elsewhere - or maybe you want to haggle down your current provider. There is also no harm in trying to haggle if you’re still in contract, but close to the end of your current deal.
The first thing you should do, is compare prices elsewhere to see what other deals are available. You can compare prices by using comparison websites such as MoneySupermarket and Uswitch.
If you find a cheaper deal, make a note of the price and then call up your existing provider. Ask your current broadband company if they can match of better the price.
It is also worth looking at your current broadband deal, and asking yourself if you really need the speed you’re on. If you can get by with a slower speed, you’ll likely save cash elsewhere.