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Broadband and telephone customers could be spared inflation-linked price increases if Ofcom intervenes
- Many households are facing increases in internet and telephone bills of up to 14.4 percent this year
- Now regulator Ofcom is intervening because of the confusing annual price increases
- However, Ofcom is not commenting on the high bills, just consumer understanding
Broadband and telephone customers could be spared the annual inflation-linked price increases, which will see many face a £95 bill increase in 2023 alone.
Regulator Ofcom said consumers do not understand how these price increases work and they may need to take action.
However, Ofcom has no plans to make these deals any cheaper – just to make sure consumers understand how the prices work.
Many communication agencies increase their prices every year, but this comes as a surprise to many consumers
One quirk of how many broadband and phone deals have worked since 2021 is that prices can be increased mid-contract.
The big annual increase occurs in March or April. Most providers base their price increases on the inflation figures from December of the previous year and add 3 to 4 percent.
With the consumer price index (CPI) inflation level reaching 10.5 percent in December 2022, broadband and telephone customers are bracing for price increases of up to 14.4 percent from late March and early April this year.
Ofcom said today it will review inflation-related mid-contract price increases for both phone and broadband customers.
The regulator said it wants customers to have “sufficient certainty and clarity about what they can expect to pay.”
Because inflation is unpredictable, this means that households have no idea how their bills will rise.
According to Ofcom’s research, around a third of broadband and telephone customers have no idea that their bills could rise in this way.
Ofcom is now looking into the matter and will make a decision later this year.
Cristina Luna-Esteban, Ofcom’s director of consumer protection, said: ‘We take a close look at these types of contract terms to fully understand the extent to which customers really know what they are signing up for, and whether they are any stricter. protections are needed.’
In the meantime, however, customers may not have to pay interim price increases.
Not all internet and phone deals are going up
Not all broadband and phone companies will increase prices this year, and not all rates will increase significantly. Companies, including O2, are still setting their rates for 2023/24, while many other providers are not raising prices for certain rates.
Also, many little-known “social fare” deals will be frozen in price. These deals are not open to everyone and are usually limited to welfare recipients, those on lower incomes, and the elderly.
A social tariff is a cheap broadband deal only available to struggling households. These cheap deals exist because since 2020 industry regulator Ofcom has required providers to offer cheap options to the most difficult customers.
It’s worth checking your eligibility, as Ofcom says only 3 per cent of eligible households have a cheaper social rate.
Another advantage of social rates is that there are no exit fees if you leave them before your term ends.