Several major broadband and mobile providers are readying inflation-related price increases that will take effect this April.
Most telcos include provisions that allow them to increase the prices of monthly tariffs mid-contract in line with a certain range and in line with a universally accepted measure of inflation, such as the consumer price index (CPI) or retail price index (RPI).
With inflation now at a 30-year high of 5.4%, many customers are likely to see significant increases to their monthly tariff – some by as much as 9% as operators include other costs as consumers use their home connection more frequently.
BT Vodafone SoHo
BT has confirmed that customer bills will rise by 9.3% at the end of March, adding an average of £3.50 a month to bills, with certain social and basic tariffs excluded. The company altered its policy two years ago to state that an annual increase of 3.9% in addition to the cost of inflation would be added annually to each tariff.
In a post to customers, BT explained that the increases would help the firm cope with an explosion in data consumption caused by people working from home and using their connection for online gaming and high-quality streaming services.
“Price rises are never popular, but are sometimes a necessary part of business, if we’re to keep up with the rising costs we face and ensure we can continue to deliver a brilliant network experience as customers usage of data grows month on month”, said Nick Lane, managing director for consumer customer services.
“We’ve thought long and hard about how we make sure that any pricing changes are predictable, clear, and not unfairly focussed on our existing customers, but reflected in our new prices too.”
“With CPI being announced today at 5.4%, most of our customers will see an increase of 9.3%, which means for the average customer a monthly increase of £3.50.These changes won’t be for all our customers, however. For our financially vulnerable customers on BT Home Essentials, BT Home Phone Saver and BT Basic, we will be leaving their prices as they are.”
Rival Virgin Media has already confirmed that it will increase its fixed line prices by an average of £4.70 a month while other broadband mobile operators are also planning increases in line with inflation and other costs.
“These inflation figures reveal the full impact of mobile and broadband price rises on consumers, with increases more than double what they were last year,” commented Ru Bhikha, telecoms expert at Uswitch.
“Customers of BT, EE, Vodafone and Plusnet will see their bills increase by a staggering 9.3%, meaning someone on an average £37.50-a-month mobile handset contract will now pay £40.98, an extra £41.85 over the year.
“Most providers increase their customers’ bills by adding a surcharge – usually 3.9% – on top of January’s inflation figures. Providers say this pays for improving network infrastructure, but with inflation already so high, these monthly increases will only add to the pain.
“Unfortunately, these rises are usually in your contract, and you will not be able to walk away without a penalty fee.”