Almost half of all broadband customers stung by mid-contract price hikes

More than two in five (43%) broadband customers have been hit with a price rise since the beginning of their current contract, according to a YouGov survey commissioned by Expert Reviews.

Almost half (49%) of the broadband customers we surveyed had been hit with a price increase within the first year, with over one fifth (22%) seeing their price go up within the first six months. One quarter (25%) were surprised by the price hike, saying they weren’t made aware of potential price rises when signing up, or had been reassured that no price rise would occur for the duration of their contract.

Adding to the ongoing cost-of-living crisis, 44% of those surveyed said their broadband price had increased by up to 24%. Just under one in ten (9%) had seen a price increase of between 25% and 49%, while around one in twenty (5%) broadband customers had seen their price shoot up by more than 50%.

The findings come as some of Britain’s biggest broadband providers are about to impose a fresh wave of price hikes on millions of customers.

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A fair price?

The research will add extra fuel to the ongoing debate about the fairness of mid-contract price hikes. Under the current regulations set out by telecoms regulator Ofcom, broadband companies are permitted to increase prices mid-contract provided they inform customers of potential price hikes when they first sign their contract.

However, there’s strong evidence that many broadband providers are failing to tell customers of potential price rises when they first sign up. According to our survey, 16% of customers claimed they had not been made aware of the potential for future price rises when signing up, and 9% said they were assured there would be no price hikes for the duration of their contract.

In December, Ofcom launched an investigation into the transparency of mid-contract price rises, arguing that “complaints suggest phone and broadband firms may not have been upfront enough about in-contract price hikes”.

Earlier this month, the regulator said it was also launching a separate review of inflation-linked price rises, adding that it was “concerned about the degree of uncertainty consumers face about future price rises specified in contracts on the basis of inflation”.

Soaring inflation

Many broadband providers set their price increases based upon the current rate of inflation. For example, BT Broadband’s annual increase is “based on the Consumer Price Index Rate of inflation which is published in January each year, plus 3.9%”.

With inflation surging over the past year, that situation has left many customers facing unexpectedly large price increases in the middle of a two-year contract, which they either have to accept or pay a hefty cancellation fee to leave their contract early.

“At a time when household finances are already under significant strain, it is vital for customers to have sufficient certainty about the prices they will pay over the course of their contract,” Ofcom said in a statement announcing its latest review. “Even for those who do understand inflation and are aware of its current level, it is not possible for them to know what it will be in the future.”

The forthcoming wave of price rises will see many customers facing hefty increases. The three broadband providers in the BT group – BT Broadband, EE and Plusnet – are set to increase prices by 14.4%, as is Vodafone. TalkTalk will put up its monthly fees by 14.2%.

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Methodology

All figures, unless otherwise stated, are from YouGov Plc. Total sample size was 4,664 adults. Fieldwork was undertaken between 17 – 19 January 2023 and the survey was carried out online. The figures have been weighted and are representative of all UK adults (aged 18+).