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Four in five consumers say mid-contract mobile and broadband price rises are unfair as millions face hikes next April

  • 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].

Notes on table 
1. NOW: Prices can be changed during a contract, subject to 30 days’ notice. Customers are able to leave if they let the provider know within 30 days of the change.  
2. Sky: Prices can be changed during a contract, subject to 30 days’ notice. Customers are able to leave if they let the provider know within 30 days of the change. Prize freeze until 2024 for new customers
Notes on table
1. Only for customers on 24-month handset plans; RPI rate from February 2023.
2. Increase just affects airtime element of contract and customers who signed up before 25 March 2021 with O2 have increase of RPI only
3. This includes during the minimum term but you may be entitled to end your contract without paying early termination charges.
4. Three will apply an annual increase of December’s CPI rate +3.9% for all new and upgrading customers who take out a contract from 1 November 2022. This will be applied in customers’ April 2023 bill.
5.  Virgin Mobile only applies RPI +3.9% to the airtime portion of the mobile contract for the significant majority of its customers.

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

 

FOR MORE INFORMATION

Sarika Patel
Phone: 07815 635259
Email: sarika.patel@rvu.co.uk
Twitter: @UswitchPR

Mid-contract rises: responses from some of the UK’s major mobile and broadband networks
  • BT says: “Instead of being inconsistent and unexpected, our price rises are annual, contracted and transparent and we make this clear when customers sign up or renew their contract. We’re dedicated to keeping our customers connected and committed to helping those who need it most. We offer a penalty-free move to Home Essentials for all eligible customers who are struggling financially, including EE and Plusnet customers.”
  • Community Fibre says: “Community Fibre may (at its discretion), on or after April 1st  every year from April 2023 increase its monthly price of the following, but not limited to broadband, call plans, call charges and Community Fibre TV by the Consumer Price Index (CPI) plus 2.9% as a maximum, however the actual amount has not been confirmed yet as Community Fibre may choose to have a lower increase than the maximum possible from the contract. Where a customer buys more than one service from Community Fibre and is subject to the price increase, the increased amount is calculated on each service separately. If a customer receives a discount on their price, the increase will be applied to this amount. *Any service taken from Community Fibre on and after December 29th  2021 may be subject on or after April 1st every year from April 2023 by the CPI rate of inflation published in January of that year, plus 2.9%.” 
  • EE says: “Instead of being inconsistent and unexpected, our price rises are annual, contracted and transparent and we make this clear when customers sign up or renew their contract. We’re dedicated to keeping our customers connected and committed to helping those who need it most. We offer a penalty-free move to Home Essentials for all eligible customers who are struggling financially, including EE and Plusnet customers.”
  • iD Mobile says:“We appreciate that price adjustments are of concern to consumers and are never welcome. However, inflationary pressure is hitting us all – both as consumers and as businesses – meaning that some iD Mobile customers will be subject to mid-contract price rises. Existing customers who are on 24-month handset plans will be subject to RPI adjustments in April 2023, and they’ll be notified of any price changes in March 2023. However, our SIMO only customers will not be affected by RPI price adjustments at this time. The need for RPI adjustment across the 24-month handset category is due to the associated costs of the category, with plans often coming bundled with a heavily subsidised handset, and a difference in the cost model versus our SIM only cost model. Add-ons, out of bundle and additional charges, will not be affected by RPI price adjustments.”
  • O2 says: “The percentage increase is dependent on when a customer joined O2. If they signed up to their contract before 25th March 2021, we apply an increase of RPI only to the airtime element of their contract. For customers who signed their contract on or after 25 March 2021, their airtime will increase by RPI +3.9%. At multiple points during the sales journey we make clear to customers that their tariff will increase annually. This is also provided to customers in their terms and conditions. Price increases, while never welcome, enable us to improve and expand our services. This is essential to cope with rising demand, with demand for mobile data continuing to grow at around 35% every year.” 
  • Plusnet says: “Our price rises are annual and transparent and we make this clear when customers sign up or renew their contract. Our customers enjoy simple, reliable products including full fibre broadband with no hidden fees, supported by our award-winning UK based customer service, always at the best value.”
  • Shell Energy Broadband says: “We continue to invest heavily in our propositions and in new ways to provide customers with the best possible experience. In addition we are not spared from the rising costs that all broadband providers are experiencing, which are passed onto us by our suppliers and the network provider. We adopted a CPI + model because we feel it’s important that any price change is clear, upfront and predictable. The CPI + model provides an annual cap on any increase and it allows customers to compare the potential increases from different providers. We always strive to keep prices as low as possible, and our allowance for up to CPI + 3% is a lower percentage allowance than many other providers in the market.”
  • Three says: “Like other mobile providers, our monthly plans are subject to an annual price change. We will apply an annual increase of December’s CPI rate +3.9% for all new and upgrading customers who take out a contract with us from 1 November 2022. The change will be applied in their April 2023 bill. “Our prices remain some of the most competitive in the market and this increase will allow us to continue to invest to ensure we have a strong network, capable of delivering better connectivity, every day, for every customer.”
  • Virgin Mobile says: “Virgin Mobile customers will see a price increase of RPI+3.9%. At multiple points during the sales journey we make clear to customers that their tariff will increase annually. This is also provided to customers in their terms and conditions. Price increases, while never welcome, enable us to improve and expand our services. This is essential to cope with rising demand, with demand for mobile data continuing to grow at around 35% every year. To meet this constant increase, Virgin Media O2 is continuously working to upgrade its network and in 2021 committed to investing at least £10 billion over the next 5 years.”
  • Vodafone says: “We know that no-one likes to see prices rise, and it is too soon to comment on next year’s figures. But we also face rising operational costs, including energy, staffing, logistics and transport, as well as the ongoing need to invest in our network and services, particularly with the roll-out of 5G and our customers’ ever-growing data usage. Nevertheless, we are aware things are difficult for many of our customers right now and we have made a number of commitments to support them. For example, we freeze prices for customers registered as financially vulnerable, and we are the only telecoms provider to offer a social tariff for both mobile (VOXI For Now) and broadband (Vodafone Essentials), offering full converged unlimited connectivity for just 72p a day.”

Notes to editors:
Opinium surveyed a sample of 2,000 UK adults from the 14th to 18th October 2022. Results were weighted to reflect a nationally representative criteria.
1. Respondents were asked ‘Do you understand the following to be fair or unfair -  Mobile or broadband providers raising prices mid-contract?’ and 81% said answered either ‘Not very fair’ or “Completely unfair’; 
2. Respondents were asked ‘Do you understand the following to be fair or unfair - Mobile or broadband providers committing to a fixed price for the duration of the contract?’ and 80% answered either ‘Very fair’ or “Fair’. 
3. To find the number of likely affected mobile customers the proportion of in-contract customers 1,227/2,000 ( 61.35%) was multiplied by the proportion of respondents in contract with a provider that has either confirmed it will implement mid-contract rises next spring, or has implemented them this year and not responded to a written question about future rises. The resulting figure was then multiplied by the adult population of the UK (52,890,000). For mobile customers 61.35% (in contract) x 62.1% (in contract with a provider implementing mid-contract rises) x 52,890,000 = 20.2 million. This was added to the number of those out of contract on a rolling deal with a provider that will implement mid-contract rises next spring, or has implemented them this year and not responded to a written question about future rises = 4.86 million. Total = 25 million
4. To find the number of likely affected homes with broadband, the proportion of in-contract customers  1,391/2,000 (69.55%) was multiplied by the proportion of respondents in contract with a provider that has either confirmed it will implement mid-contract rises next spring, or has implemented them this year and not responded to a written question about future rises. The resulting figure was then multiplied by the total of 27,700,000 broadband-connected UK households. For broadband households 69.55% (in contract) x 41.8% (in contract with a provider implementing mid-contract rises) x 27,700,000 = 8.06 million households. This was added to the number of those out of contract on a rolling deal with a provider that will implement mid-contract rises next spring, or has implemented them this year and not responded to a written question about future rises = 1.99 million. Total = 10 million
5. This change in mid-contract rises is due to the increasing costs that Three is facing in rolling out its network and so is essential for it to continue to provide the UK’s fastest 5G service for its customers. Three: “Our prices remain some of the most competitive in the market and this increase will allow us to continue to invest to ensure we have a strong network, capable of delivering better connectivity, every day, for every customer.” Please see full provider responses above.
6. Respondents were asked ‘How much of an increase in your monthly broadband or mobile bill would cause you stress?  Please think about each bill individually.’ A total of 27% said £5 (14%) or less than £5 (13%). 
7. Source: ISPreview
8. Respondents were asked ‘Which, if any, of the following statements do you agree with’ 25% said they agreed with the statement ‘The next broadband contract I take out will be with a provider that does not have annual price rises’.
9. Respondents were asked ‘Which, if any, of the following statements do you agree with’ 41% said they agreed with the statement ‘Mid-contract price rises on broadband and mobile services should be banned’.
10. Respondents were asked ‘Do you understand the following to be fair or unfair -  Mobile or broadband providers raising prices mid-contract?’ and 89% of Plusnet customers answered either ‘Not very fair’ or 'Completely unfair’.

About Uswitch 

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.