Consumers are facing soaring rises in the price of their broadband and mobile contracts this spring due to the anticipated increase in inflation.
Telecoms providers will contact customers once the Office for National Statistics (ONS) confirms January’s rate of inflation on Wednesday, the majority of which base their calculations on the Consumer Prices Index (CPI), plus an additional percentage.
The change will come alongside steeper energy and food bills already hitting pockets. The current CPI rate of 5.1 per cent is the highest for a decade, meaning consumers are likely to be lumped with significantly higher phone, TV and broadband bills if the rate climbs even higher.
BT, EE Broadband, John Lewis Broadband, Plusnet and Vodafone all charge CPI plus 3.9 per cent, while TalkTalk will charge CPI and an additional 3.7 per cent from April – the first time it has done so.
These price rises are built into the terms and conditions of customers’ contracts, meaning they can’t be cancelled without incurring an exit fee.
Vodafone broadband customers who signed a contract before 2 February 2021 will expect to pay CPI plus a 1.4 per cent rise, while those joining afterwards can expect to pay CPI plus 3.9 per cent.
Sky broadband notified its customers of a price increase that came into effect from 1 April 2021 for its broadband and TV customers and from 1 May for its home phone customers, capping increases at a maximum of £72 a year. Unlike its rivals, the amount is a set amount of pounds depending on the service, rather than a percentage rise.
Similarly, millions of Virgin Media broadband customers are facing an increase of around £56 per year (an average of £4.70 a month). Virgin customers have until 15 February to cancel their contract or switch to a different service.
However, providers Zen Internet, Hyperoptic and SSE do not charge their users annual price hikes. Zen Internet have promised not to charge increased fees to customers who stick to the same plan, while Hyperoptic and SSE have committed to not increasing bills during a minimum contract period.
BT Mobile, EE, Plusnet Mobile and Vodafone will be hiking prices at the CPI rate plus 3.9 per cent, while ID Mobile, O2 and Virgin Mobile link their prices to the retail prices index (RPI), which is 7.1 per cent.
Tesco Mobile and Sky Mobile currently do not raise their prices in line with inflation, while flexible rolling contract providers GiffGaff, Smarty, Utility Warehouse, Voxi and Lebara do not factor automatic price rises into their plans.
Neither Now (formerly Now TV) or parent company Sky have automatic price rises in their terms and conditions. However, while Now allows customers to cancel within 30 days of a price change, Sky reserves the right to increase bills by up to 10 per cent each year without penalty-free cancellation.
Netflix has been contacted for comment over whether it plans to increase UK costs after raising its US fees by between $1 and $2 a month last week, alongside Disney+ and Amazon Prime Video.
“While Ofcom doesn’t set retail prices, we strongly urge telecoms providers to take account of the growing financial pressures on their customers when considering increases,” an Ofcom spokesperson said.
“We also expect companies to promote cheaper social tariffs for eligible customers and ensure sign-up is swift and simple to encourage take-up.”
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