Don’t let big broadband and mobile price hikes make an April fool of you
My recent column on sorting out your utility bills in time for April elicited quite the response! In particular, I’ve had loads of questions from readers about mobile and broadband contracts and price rises this year.
The good news is the April price hikes will be dramatically reduced thanks to new rules from regulator Ofcom. But not till next year. Here’s my guide to what’s happening and what you can do in the meantime.
Why does my contract increase each year?
Most telecommunications firms reserve the right to raise the price of your contract in April each year, usually with inflation-busting hikes.
In recent years the problem has become more pronounced as inflation has rocketed. Most phone and broadband companies take the rate of inflation and stick an extra 4% on the top of it. That meant prices rose by between 14% to 17% last year – and that means an average of just under 9% more this year too.
What do the new rules say?
Ofcom has proposed banning inflation-linked mid-contract price rises (ofcom.org.uk/newscentre/2023/ban-on-inflationlinked-mid-contract-price-rise) from next year. That doesn’t mean all price rises are banned. However, businesses will no longer be able to charge inflation-busting rates. The regulator is proposing that we will all be told ‘in pounds and pence’ about future price rises. That means your new contract will have to spell out what any mid-contract price rise will be if one applies.
In many cases you can’t get out of your contract without a hefty exit fee. However, a few broadband providers have contracts that give you the option of bailing before the rise is applied without exit fees.
What if the contract I’m on does charge exit fees?
You could still potentially get out of a contract if the business isn’t meeting its side of the deal.
If the business has changed key contract terms and conditions, withdrawn services you regularly use or introduced any other changes to your existing deal, you can ask to leave and have the exit fees dropped. If they say no (and some telecoms departments have notoriously poor customer service, so don’t be disheartened), make a complaint asking why the contract has changed for the worse.
If your broadband speed or mobile phone reception is poor, then tell the firm, take regular signal tests using free apps online. That way you can demonstrate that there’s a problem and the firm should let you go without charges.
What else has been announced?
The regulator also revealed that the number of people on ‘social tariffs’ increased to 380,000 in September 2023, up from 147,000 a year earlier. However, that means just 8.3% of all eligible households are benefiting from these deals.
Social tariffs are designed to provide cheaper broadband services for people on certain benefits. These deals can dramatically reduce your broadband costs. Prices range from around £10 to £20 a month if you need faster broadband speeds.
To get started, contact your broadband provider and ask them about the social tariff deals they offer. You should be able to leave your existing deal mid-contract without having to pay an exit fee. In addition, set up costs should be minimal, there will be no midcontract price rise and you should be able to leave without a fee too.
Communications Ombudsman
Don’t forget that you can make a complaint about most mobile phone or broadband problems to the Ombudsman. The largest of the services is the Communications Ombudsman and you can contact them at commsombudsman.org
Alternatively you can find CISAS at cedr.com/consumer/cisas/ make-a-complaint/