Warning broadband and mobile customers face £500 exit fees or monthly bill hikes
Broadband and mobile customers face being trapped between £60 price hikes and £500 exit fees, consumer group Which? has warned.
Most major telecom giants are expected to go ahead with “unfair and unpredictable” price hikes linked to inflation this spring. Under current rules, broadband and mobile companies are allowed to increase prices mid-contract in line with inflation, plus up to 3.9% extra on top of this.
Most use Consumer Prices Index (CPI) inflation data for December, or Retail Prices Index (RPI) for January to decide their increases. The CPI figure for December was 4% - meaning some companies will increase bills by up to 7.9%. We won’t know the RPI figure for January until next month.
Which? has calculated how much an in-contract BT, EE, Plusnet, Shell Energy Broadband, TalkTalk, Three or Vodafone customer could see their payments rise by from this spring. BT, EE and Plusnet have already confirmed they will be raising prices by 7.9%.
The research from Which? shows BT broadband customers face an £35.92 annual increase, based on the average customer already paying £37.89 a month. It would cost them an exit fee of £218.64, assuming they had 12 months remaining on their contract, to switch to another provider.
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Meanwhile, the average Vodafone SIM-only mobile customer faces paying £27.36 more annually from April 2024, based on someone paying £28.89 a month and an increase of 7.9%. This person would have to pay £339.75 fee to exit the contract early.
If you have BT broadband and a SIM-only deal with Vodafone, then Which? says you would face a combined £63.28 price hike or £558.39 in exit fees. Which? research found the average EE broadband customer faces price hikes this April of £32.28 or an exit fee of £132.38. This is based on someone already paying £34.05 a month.
Vodafone broadband customers pay £31.16 a month on average, however they face annual price hikes of £29.54 this April and exit fees of £121.42. TalkTalk has confirmed it will hike prices by 7.7% which would result in a £29.53 yearly hike for the average customer. The exit fees would be £122.40 to leave the contract. These figures are disputed by TalkTalk.
EE mobile customers face a £24.84 hike or a £289.64 exit fee, while Three mobile customers face a £19.20 hike or a £235.24 exit fee. Plusnet broadband customers face an annual hike of £28.31 or an exit fee of £141.81, while Shell Energy broadband has confirmed it will be going ahead with a 6% annual price hike for customers.
This would result in an £18.46 increase or an exit fee of £222. O2 and Virgin Media use RPI as the measure for their price hikes. RPI is announced in February and is often higher than the CPI+3.9% figure.
Rocio Concha, Which? Director of Policy and Advocacy, said: “It’s outrageous that telecoms firms could yet again trap their customers between inflation-busting price hikes and punitive exit fees this April, despite Ofcom declaring this practice causes substantial consumer harm. Telecoms providers must do the right thing by halting unfair price hikes immediately, rather than piling more misery on their customers.”
A BT Consumer spokesperson (covering BT , EE and Plusnet ) said: “For most customers, this increase will be around £3 per month. This rise reflects the considerable investments we're making into our network, while also protecting customers in financial hardship and digital exclusion, through our market-leading social tariffs.”
“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.”
A Shell Energy Broadband spokesperson said: “We work hard to keep our costs down, but unfortunately we experience the same inflationary cost pressures as everyone else. We have kept our 2024 price increase lower than our terms and conditions allow for, and much lower than the current price rise commitments of other providers.”
TalkTalk disputed the research and said it calculated the average annual increases for affected customers as £26.64. It did not provide further comment. Three and Vodafone also did not provide comments.
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