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Broadband billpayers braced for up to 10.4% price hikes in 2024

Broadband billpayers braced for up to 10.4% price hikes in 2024
Rebecca Goodman
Written By:
Rebecca Goodman
Posted:
06/10/2023
Updated:
06/10/2023

Unpredictable and "outrageous" mid-contract broadband price hikes add a surprise £150 to bills, with latest forecasts suggesting households face an up to 10.4% rise next year.

Broadband customers with the telecoms giants are braced to see their bills hiked between 7.5% and 10.4% in 2024, according to forecasts compiled by a consumer champion.

The majority of telecoms providers use mid-contract price rises which allows them to raise prices every year. Most link these to the January level of inflation plus a fixed amount, usually 3%, 3.7%, or 3.9%.

Based on the average customer broadband bill and latest Bank of England quarterly inflation forecasts, Which? suggests customers could face the following annual increase due to mid-contract price hikes next year:

  • BT: CPI + 3.9% = 8.4%, adding annual £43.68 to bills
  • EE: CPI + 3.9% = 8.4%, adding annual £43.68 to bills
  • Plusnet: CPI + 3.9% = 8.4%, adding annual £34.92 to bills
  • Shell Energy: CPI + up to 3% = 7.5%, adding annual £27.16 to bills
  • TalkTalk: CPI + 3.7% = 8.3%, adding annual £35.52 to bills
  • Virgin Media: RPI + 3.9% = 10.4%, adding annual £50.52 to bills
  • Vodafone: CPI + 3.9% = 8.4%, adding annual £36.24 to bills.

While customers will only know for certain in the New Year, as these price hikes are written into customer contracts which they agree to when signing up, it means they can’t end the deal early when a subsequent price rise is announced. Instead customers have little choice but to pay the higher price if they’re still within their minimum contract term.

Surprise £150 added to bills over a two-year contract

After last year’s soaring inflation figures, some customers saw hikes of up to 17.3% as a result of these price rises.

And taken together, Which? said the cost of a contract including a 2023 and 2024 price rise mean broadband customers could be charged up to £150 more than they expected over a two-year term.

For BT customers who took out a contract in January 2023, they could be paying an extra £147.43 over a two-year contract while those with EE the extra amount was £147.31. For Vodafone and Plusnet users, there could be rises of £122.38 and £117.87 respectively.

TalkTalk customers could see an extra £76.09 added to an 18-month contract taken out at the start of 2023. A Shell Energy customer who joined before January 2023 could see £45.27 added to their annual bills, as it did not apply inflation-linked price hikes to those joining in January to March this year.

While Virgin Media did not use inflation-linked price hikes in 2023, it did hike prices by 13.8%. But customers were free to leave if they didn’t want to pay the higher price. The consumer group predicted that a Virgin Media customer paying the average contract price would pay an extra £67.07 between spring 2023 and 2024.

If you’re a Sky customer, then this provider is unique in that it raises prices in an ad hoc manner. Here, customers are given 30 days to exit for free when a price rise is announced. However, this does mean Sky customers face price uncertainty when considering deals.

Mid-contract price hike investigation and call for ban

Many groups have criticised these mid-contract price hikes and they are currently being investigated by regulator Ofcom. Which? and other groups have said these hikes make it impossible for customers to budget as they don’t know how much their bills will go up by as it’s linked to the inflation figure.

As such, it is calling on Ofcom to ban the practice which could see some customers paying £150 more for broadband services than the price they first signed up to.

It is also asking providers to stop these price hikes which it said are unfair and potentially illegal.

‘Consumers must have certainty about the total contract cost’

Rocio Concha, Which? director of policy and advocacy, said: “From working and school to online banking and social media, a good broadband and mobile connection is essential to everyday modern life.

“That’s why it’s outrageous that unpredictable mid-contract price hikes have been allowed to continue in the telecoms industry for so long – especially when so many have been struggling to make ends meet during the cost-of-living crisis. Consumers must have certainty about the total cost of their contract.

“Which? is calling on all providers to do the right thing and cancel 2024’s above inflation price hikes. Ofcom should also use their review to finally ban these unpredictable mid-contract price hikes that harm consumers and undermine competition. Consumers need to know exactly how much their contract will cost when they sign up.”