BT to raise broadband bills by up to £53

Telecom company’s steep increase in charges comes amid urgent review into small print by regulators

BT is to hit millions of households with an above-inflation increase in their broadband bills next spring, despite an review by regulators into whether telecom companies are mistreating their customers. Philip Jansen, BT chief executive, said a price rise forecast to be 13 per cent – adding £53 to the average bill – will go ahead in April because of the economic environment. It puts BT at risk of a clash with Ofcom, which plans to take action on misleading small print.

BT is to hit millions of households with an above-inflation increase in their broadband bills next spring despite an urgent review by regulators into whether telecoms companies are mistreating their customers.

Philip Jansen, BT’S chief executive, said a price rise forecast to be 13pc – adding £53 to the average bill – will “absolutely” go ahead in April because the challenging economic environment and rising costs had left the company with no choice.

It puts BT at risk of a clash with the industry watchdog Ofcom, which is preparing to take action on misleading small print. The business is also facing a revolt from its workers over pay, with union members to go on strike today and Monday.

Mr Jansen’s decision to press ahead with price rises is likely to raise fears that the cost of living squeeze will persist into next year.

BT’S customer contracts state that it will put up prices every year by inflation plus 3.9pc. Analysts expect inflation to stand at around 9pc in early 2023, meaning customers face a rise in their bills of 13pc.

This would add about £53 per year to the cost of a typical BT Fibre Essential package, its cheapest standard broadband and phone tariff which costs £33.99 per month.

The price increases apply across the company’s broadband, EE mobile and BT Sport packages.

With other broadband operators likely to introduce similar price rises next year, sources said that Ofcom is speeding up a review into the small print of annual rate increases, in particular whether consumers were made fully aware that their monthly fee could soar when they signed up. There is no suggestion BT has broken any rules.

Mr Jansen said he was hopeful that inflation “would be on the low side”.

Nadine Dorries, Secretary of State for Digital, Culture, Media and Sport, hauled telecoms companies to Downing Street last month to discuss the cost of living crisis, meeting executives from Talktalk, Bt-owned Openreach and Vodafone.

Ministers are concerned that not enough people are taking advantage of discounted tariffs for those on the lowest incomes. Above-inflation price rises were also criticised by officials.

Mr Jansen defended the price increase, which is written into customer contracts, saying the company still offered “absolute value for money”.

He added: “People realise inflation is very high and it is keeping going and we have economic uncertainty and the prospect of recession.”

In April this year, the company pushed up prices on most of its packages by 9.3pc. Consumer advice groups branded the increase a “tax on working from home”.

Multiple mobile phone and broadband operators include above-inflation price rises as part of their deals. Vodafone and O2 also have clauses that threaten to push bills up by more than inflation next April.

Rivals have lobbied Ofcom to investigate these annual price rises. A spokesman for fellow provider Hyperoptic said: “Ultimately these clauses mean a customer is not able to know how much they will be paying for the length of their contract. We don’t think that should be allowed.”

The planned price increases next year will pile further pressure on household budgets after a gruelling winter, with mean energy bills likely to hit £500 in January alone according to research by the consultancy BFY.

An Ofcom spokesman said: “Companies must set out price rises clearly before customers sign up; they can’t just include them in the small print. We are monitoring this area closely.”

Mr Jansen said the company would continue to offer a basic “Home Essentials” package, which costs £15 per month, for those on Universal Credit. The company has not decided whether to increase the price of this package.

A BT spokesman said: “Our annual price rises are contracted and we make this clear when customers sign up.”