Broadband prices set to rise - will you have to pay ‘unfair’ higher bills?

Millions of Brits are set to face big mid-contract price hikes from their broadband and mobile providers, with no easy way to avoid the extra cost or leave the lengthy contracts. Every year, broadband and mobile companies can raise the prices of contracts for existing customers as long as it was previously disclosed that annual inflation plus a fixed percentage rise could apply - this is usually stated in a customer’s initial contract.

Internet service providers (ISPs) and mobile operators are by law allowed to the annual Retail Price Index (RPI) and Consumer Price Index (CPI) to increase costs in line with inflation.

The only way UK subscribers can leave their contracts to avoid a price increase is if they can prove they were never contractually warned of the hikes in the first place - otherwise leaving a contract entails a hefty cancellation fee.

Price rises are expected from many of Britain’s big broadband providers such as BT, Virgin Media, and Sky, while mobile providers O2, Three, Vodafone, and EE could all charge customers more too.

According to research from Uswitch, 85 percent of consumers say mid-contract price rises are ‘unfair’, while six in then would leave their provider at the next available opportunity if their contract price went up. 87 percent said they should be allowed to leave mid-contract if the cost rose.

The price bumps are set to hit in April 2024. Uswitch found that in April this year broadband bills increased by £18.50 per month on average, while mobile bills shot up on average by £9.50 per month.

“We’re calling for an end to the practice of inflation-linked annual price rises in broadband and mobile contracts,” Ernest Doku, telecoms expert at Uswitch.com said. “With inflation still historically high, it’s never been more urgent for this industry norm to be reformed.

“For consumers, we know even an increase of £5 can make a difference, so it’s worth looking ahead and understanding when your contract is coming to an end.”

With inflation and a percentage rise that is usually about 3.9 percent, consumer watchdog Which? estimates mobile customers could be paying up to £120 more than they thought over the course of a contract.

Doku says UK regulator Ofcom can stop this trend.

“The inflation-linked mechanic is especially unfair for bill payers as consumers cannot be expected to know exactly how much the rise will be. It’s time for Ofcom to intervene.

“Time is running out to address 2024 price rises. The Retail Price Index (RPI) and Consumer Price Index (CPI) figures are confirmed in January, which is when the scale of the increases will become clear - with provider notifications arriving from March.”

He says that mobile virtual network operators (MVNOs) are a good option for customers who want to avoid price rises. Sky Mobile, Giffgaff, Smarty, Voxi, LycaMobile and Lebara never raise prices mid-contract, and also offer flexible monthly rolling rates so you can leave at any time - though those plans are subject to price changes.

These MVNOs are more common for people who just want to pay for a SIM card for a phone they already have or have bought outright. Mid-contract price increases usually apply to people who are mid-way through a two or three year mobile contract that also includes the subsidised cost of an expensive smartphone handset. Broadband providers Community Fibre, Zen and Hyperoptic are among the few suppliers that commit to not raising customer prices during a contract.