Broadband bills could surge by as much as £113 next year if a number of the UK’s biggest telecoms firms push ahead with inflation-busting price increases next spring, says consumer watchdog Which?
Many of the country’s main internet providers – including the largest player BT, along with TalkTalk, EE, Plusnet and Vodafone – use a mechanism to increase the cost of bills annually by the rate of inflation as measured by the consumer prices index (CPI) in January, plus 3.9%.
The Bank of England forecasts inflation at just below 10% for January, meaning millions of broadband customers will face a 14% mid-contract increase in their bills.
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Which?’s latest broadband survey found that a typical BT customer is facing the largest potential increase of £113 compared with what they were paying in January this year.
Customers of Plusnet, also owned by BT, will face the smallest hike of £87.15 among the five telecoms companies that use the mechanism surveyed by Which?
Given the telecoms companies pushed through inflation-busting rises of around 10% in April, next spring their customers will have seen their bills increase by between £120 and £156 in just two years.
“It is unacceptable that many broadband customers are facing price hikes during an unrelenting cost of living crisis,” said Rocio Concha, director of policy and advocacy at Which? “Customers should be allowed to leave their contract without penalty if prices are hiked mid-contract, regardless of whether or not these increases can be said to be ‘transparent’.”
BT, which attributed the majority of sales growth between April and June to this year’s almost 10% bill increase, has already said it would “stick the course” next year as its own costs also rise. Telecoms companies are estimated to be in line for an almost £2bn windfall next year using the so-called “inflation-plus” mechanism.
Telecoms regulator Ofcom, which has said a record 8m households have already experienced difficulty paying their telecoms bills, has told internet companies to “think hard” about continuing to make major hikes “when the finances of their customers are under such pressure”.
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Earlier this week, Labour said it would scrap the use of the mechanism and mid-contract price hikes if the party came to power.
Providers including Hyperoptic, Utility Warehouse and Zen Internet keep customers prices fixed for the term of their contract, while KCOM moved to cancel mid-contract rises this year.
Sky and Virgin Media do not employ the inflation-linked mechanism but they do institute price rises, but allow customers to switch providers without penalty if they choose to leave.