Mid-contract broadband and mobile price increases: What you need to know

In principle, one of the benefits of a contract is that it locks you into a stable relationship with a service provider; but as some customers have discovered, the terms of their contracts allow providers to increase prices significantly long before the contract has run its course. Even the best broadband providers are guilty of upping prices mid-contract.

Why mid-contract price increases happen

The main explanation for contract prices increasing before the term is up is inflation, with increases pegged to indicators such as the Consumer Price Index (CPI). In addition, the increases are often above inflation, adding a few per cent on top of the increase in the references index.

While it might have been believed that the changes in inflation over the course of a two-year contract wouldn’t be significant enough to impact the contract price, recent world economic conditions have proved otherwise; the Covid pandemic and war in Ukraine has seen inflation become a global problem. Luckily, inflation in the UK has eased in 2024; but numerous providers already have terms in their contracts that allow for increases, with others planning to add them to new contracts.

We reported in March of 2023 that nearly half of broadband customers had been hit with mid-contract price increases, and there’s no clear sign of that changing any time soon.

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Which providers are increasing prices mid-contract?

The only way to determine if your prospective provider will be increasing prices is to read its terms and conditions carefully. For example, EE states an annual price increase at the end of March in line with the CPI plus 3.9%.

Three, on the other hand, increases its prices according to when your contract was first signed:

“If you joined or upgraded your phone, SIM only, mobile broadband or home broadband plan after 1st November 2022, your Monthly Charge will increase each April by the preceding December CPI rate +3.9%.” – Three CPI page.

Every provider, should they implement mid-contract increases, has similar terms and conditions set out in documentation or on their websites, so you can prepare yourself by reading the T&Cs before you sign.

What does Ofcom say?

Ofcom, the UK’s telecoms regulator, has voiced concerns about mid-contract inflation-linked price increases, with the organisation even proposing a ban of the practice.

At the very least, Ofcom has plans in the works to make these increases more transparent, and reduce incidents where consumers are confused or misunderstand the terms of their contract. According to the organisation, the onus should be on providers to foreground these price increases and ensure their customers know what they’re signing.

At the time of writing, the proposal for new rules prohibiting inflation-linked price rises is still in the consultation phase.

Ofcom isn’t the only regulator to weigh in on this issue; the Advertising Standards Authority has issued a clarification on how the UK Code of Advertising should be interpreted when it comes to clearly disclosing mid-contract price increases in advertisements in print, broadcast media and anywhere else it has jurisdiction.

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What you can do

The most important thing to note is that if a contract does not make clear if, or when, a price increase will happen, Ofcom’s rules state that consumers must be given 30 days’ notice and have the option to cancel the contract without penalty:

“Our rules do not prohibit prices may vary terms, but providers are required to give customers at least one month’s notice of the price increase and the right to exit their contract without penalty, as they constitute contractual modifications.” Page 7, Footnote 5 of Prohibiting inflation-linked price rises.

If you’re not happy with the increase, you can exercise your right to cancel, and Ofcom’s rules make it relatively simple to change broadband providers. Your new provider should handle much of the transition with your previous provider.

However, before you exercise your right to cancel, you can try to negotiate a lesser increase with your provider. Your provider might offer a better deal to retain you as a customer rather than see you go, and you have nothing to lose by asking for a better deal before cancelling your contract.

If you’re looking for a new provider, be sure to head over to our roundups of the best mobile providers and best home broadband providers.