Half a billion reasons to ban unjust broadband and mobile price increases
Rocio Concha, Director of Policy and Advocacy at Which?
| Which?
This Easter, chocolate eggs might not be the only thing consumers are waking up to. For those with a broadband connection or a mobile phone contract - which is of course the majority - many will find that the price of their bill will have increased, to significantly more than they signed up to paying.
Mid-contract price rises that increase by unpredictable amounts - usually linked to inflation, plus a mark-up - have existed in their current form since 2020. But with inflation recently at the highest level in living memory, the absurdity and unfairness of these unpredictable increases has been brought into much sharper focus.
Which? estimates that around a third of UK households with a broadband contract will begin to see their bills increase from the start of April. We project that the cost for many customers is set to go up by over eight per cent - hardly a trivial amount for consumers still battling a cost of living crisis that continues, despite the recent fall in inflation. The alternative to stumping up the extra cash? Punitive exit fees which could be hundreds of pounds - a terrible Catch-22 for those struggling to make ends meet.
Our latest research has found half a billion reasons why telecoms providers are set to stubbornly impose these hikes yet again next year - despite being very well aware of the misery they are causing during a cost of living crisis. Which? research has found major firms are set to cash in to the tune of £480 million by exploiting this practice.
This matters because being connected on the internet or a mobile phone aren’t metropolitan luxuries. They are essentials for modern life. They allow us to work from anywhere with a router or signal, children to do their homework, navigate our way to new places, shop, bank and access government services. Yet we are increasingly reliant on connectivity at a time when its cost is increasing at dizzying speed due to sneaky price hikes big providers introduce during contracts.
Their behaviour is unjustifiable. Indeed, they barely seek to justify it themselves, vaguely referencing infrastructure upgrades but providing little evidence of money being spent in this way. BT recently boasted about its billion-pound profits – which were thanks, in part, to imposing inflation-linked hikes on customers.
For too long, providers have placed the burden of managing inflation risk onto their customers. The consequence is that customers find it much harder to know how much they’re actually likely to pay over the course of the contract and budget accordingly because the hikes are so unpredictable. We found only one in 20 could accurately predict how much their bills will increase by.
Over the last year, Which? has worked tirelessly to plead with telecoms providers to call off these above inflation price increases, pointing out the real-world impacts they’ll have on already hard up consumers.
However, all indications suggest they intend to plough on regardless. That’s why we’ve launched a new campaign, The Right to Connect, calling on telecoms providers to do the right thing and ban this underhand practice once and for all.
The media regulator Ofcom is currently conducting a review into mid-contract price hikes, but it’s not set to return its findings until December, by which point it’ll already be too late to halt them before next April.
While we believe Ofcom’s review should lead to a ban on unpredictable price increases in contracts, we are calling on providers to not wait for the regulator’s decision and voluntarily cancel the hikes themselves.
Because when it comes to basic necessities like a reliable mobile or internet connection, consumers deserve clarity. That means knowing how much money you’ll be expected to pay over the course of the contract. No unpredictable hikes, just certainty.
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