As if household budgets weren’t already under enough pressure, millions of mobile phone and broadband customers will face increases of more than 14% in their monthly bills starting in April.
BT, TalkTalk, Three and Vodafone are among the big telecom providers contractually allowed to raise their bills in line with the previous year’s rate of inflation, as measured by the December Consumer Price Index (CPI). , plus an additional 3%-3.9. % on.
If the increases are passed through in full, as many experts expect, home broadband customers would typically pay around £50 more a year, while mobile customers on expensive contracts could face increases of more than £100. sterling pounds.
On Wednesday, the Office for National Statistics said the CPI rate eased slightly to 10.5%. It means there is nothing stopping telecom providers from increasing bills by 13-14.4%.
Ernest Doku, a telecoms expert with Uswitch.com, said millions of mobile and broadband customers will now learn the scale of the bill increases they are likely to face this spring. Only those with social rates appear to be safe from increases.
He said broadband contracts from BT, EE, Plusnet and Vodafone allowed prices to rise by CPI plus 3.9%. On TalkTalk, it was CPI plus 3.7%, while Shell Energy can add CPI plus 3%. Sky and Virgin Media’s contracts allow mid-contract price increases, but do not stipulate a pricing formula in the same way as rivals.
Although providers could surprise customers and retain some of the increase, consumers can start to expect a series of announcements before April.
Companies have to give customers 30 days’ notice of price increases, but so far they have said nothing about whether bills will be maxed out.
Consumer groups are asking non-contract households to use this as a catalyst to move to a new deal.
Uswitch said broadband customers could save £162 a year on average by switching to a new provider, while hagglers typically save more than £85 a year, according to consumer group Which?.
A recent MoneySavingExpert survey revealed a success rate of over 75% when haggling with TalkTalk, Virgin and Sky, as well as “high success rates” with other broadband providers.
UK communications regulator Ofcom is already facing calls to reduce the amount Openreach can charge providers for wholesale broadband lines that are, in turn, passed on to customers.
“There is still time for Ofcom to act and reduce the wholesale price increases that lead to these price increases. These are exceptional circumstances, and families and businesses across the UK need the regulator to act,” a TalkTalk spokesperson said. They added that the formula was agreed in 2021 when inflation was at 1.5%.
An Ofcom spokesperson said: “Our rules are clear: everyone must be informed in advance of any future price increases before signing up, and we are investigating whether phone and broadband companies stick to this.
“We are also concerned about the transparency of inflation-linked price increases in contracts and how well they are understood. We are looking into this issue to ensure that customers’ interests are protected.”
