Four in five Brits say mid-contract price increases are unfair (81%)[1] and want their monthly bills to stay the same for the duration of their deals (80%)[2]
25 million mobile and 10 million broadband consumers are set for rises of up to 14% in April, based on recent inflation rates[3][4]
Despite this Three, the UK’s fourth-biggest mobile provider, has also confirmed new inflation-linked rises at the same high rates as other major networks[5]
Amid the cost-of-living crisis, more than a quarter of consumers (27%) say an increase of £5 to their mobile or broadband bill would cause them stress[6]
To make matters worse, it has been reported that broadband providers are set to miss next spring’s deadline for a scheme to make it easier for consumers to move between different networks[7]
A quarter of Brits (25%) say they will take choose their next broadband deal based on a provider that does not apply inescapable mid-contract price rises, such as Sky, Virgin Media or Hyperoptic[8]
Uswitch.com is calling on providers to scrap mid-contract price rises for all new customers, and let existing users leave penalty-free if prices rise.
Four in five consumers say mid-contract mobile and broadband price rises are unfair[1], as 25 million mobile users and 10 million households on broadband deals face hikes next spring, according to new research[3][4] from Uswitch.com, the comparison and switching service.
The majority of mobile and broadband providers link their annual price rises to inflation rates, measured by the Consumer Price Index (CPI) or Retail Price Index (RPI), with some including an additional price increase of 3-4% on top. With inflation at its highest level in decades, customers could be hit by price rises of around 14% at the end of March.
Three, the UK’s fourth-largest mobile network, is the latest to introduce inflation-linked mid-contract rises[5]. The provider will now introduce an annual increase based on December’s CPI rate plus 3.9% - the same rate as EE and Vodafone - for all new and upgrading customers from 1 November 2022. This is a sharp increase from the 4.5% fixed rise they applied this spring. For those affected, it will start from April 2023, meaning they too will almost certainly face a double-digit percentage increase.
With more than than a quarter (27%) of consumers saying that an increase of £5 to their monthly broadband or mobile bill would cause them stress,[6] two-fifths (41%) believe that mid-contract price rises should be stopped[9].
While many mobile and broadband providers are expected to press ahead with price rises next year, it was households supplied by broadband company Plusnet who were most likely to view them negatively.
Nine in ten (89%) of the Plusnet customers surveyed, many who received a rise of 9.3% earlier this year, viewed such charges as either “not very fair” or “completely unfair”[10]. The provider had the highest proportion of broadband customers surveyed speaking out against the fees.
By contrast the research shows 80% of Brits want providers to offer fixed-price deals for their broadband and mobile, with no mid-contract rises built in[2].
Not all companies are planning mid-term price increases. Sky has frozen its pricing for new broadband customers signing up, while full fibre provider Hyperoptic has never enforced mid-contract bill rises. Their stance may gain them more subscribers, as a quarter of customers (25%) say they will take out their next broadband deal with a provider that does not apply annual price hikes[8].
To make matters worse for consumers - it has been reported that providers are set to miss Ofcom’s April 23 deadline for introducing the One Touch Switch scheme, which is intended to make switching between broadband networks outside of the Openreach network more seamless[7].
Ahead of mid-contract price rises being finalised for April 2023,Uswitch.com is calling for telecoms providers to cancel them next spring, or let customers walk away penalty-free if their price increases.
Uswitch is also calling on Ofcom to do more to prevent telecoms providers from raising prices halfway through a contract - and to ensure the One Touch Switch deadline is met so consumers can move easily, regardless of network.
Richard Neudegg, director of regulation at Uswitch.com, comments: “There seems to be no other industry that sees companies increasing their prices halfway through a fixed-term contract with no right to leave. It’s time Ofcom took action to help protect customers from these rises, so they know what they’re dealing with when signing a new contract.
“If providers cannot commit to a price for the duration of the contract - they should offer shorter contracts or the chance for consumers to leave penalty-free when prices jump.
“News that broadband service providers don’t expect to meet Ofcom’s deadline for One Touch Switch is a further blow to consumers - especially as the impact may be felt just as inflation rises will hit consumer bills.
“Ofcom cannot allow implementation to be delayed. Consumers shouldn’t face undue complications when switching from a provider that doesn’t meet their needs - especially when facing inflation-linked price hikes.
“While annual price rises are not new, the recent unprecedented levels of inflation mean that these hikes are more painful than ever, especially during the cost-of-living crisis.
“If you are taking out a new broadband or mobile package, check for wording around annual mid-contract rises, which should be prominently shown at the point of signing up. If the annual rise is linked to inflation it is impossible to predict exactly how much this will make bills rise by.
“If you’re out of contract - not only could you be paying over the odds - but, depending on your provider, you could still be faced with an annual price rise. If you’re nearing the time to switch, it’s important to compare what deals are available.”
To find out more about why broadband and mobile prices increase mid-contract visit Uswitch’s guide here
Uswitch is one of the UK’s top comparison websites for home services switching, including broadband, mobiles, SIM Only and insurance. We’ve saved consumers over £2.5 billion off their bills since we launched in September 2000.
In 2022, Uswitch launched its free mobile app, Utrack, to help consumers manage their home energy costs. By connecting to their smart meter, users can track their energy usage hourly, get dynamic insights and calculate potential savings with handy tips.
Uswitch is part of RVU, a global group of online brands with a mission to empower consumers to make more confident home services, insurance and financial decisions.