Millions of mobile and broadband customers will face extremely high price hikes from next week.
Providers such as EE, BT, O2, Plusnet, Sky, TalkTalk, Three, Virgin Media, and Vodafone will subject their customers to bill increases of up to 17.3 per cent. Many firms are justifying the skyrocketing prices by pointing to increasing operating costs, higher energy prices, and rising network costs.
Almost all of the UK's biggest mobile and broadband suppliers link their price rises to either January's consumer price index (CPI) or the retail price index (RPI) which were recorded at 10.5 per cent and 13.4 per cent respectively. It comes after industry regulator Ofcom announced it would look into the common practice of mid-contract price increases after growing concerns that customers aren't properly informed about what they could pay throughout their contract.
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However, many customers who are not roped into a contract may not be subjected to the price hikes. Consumer informer Which? warned telecoms companies to "urgently" cancel the hikes for their most vulnerable customers.
Which? director of policy and advocacy Rocio Concha said: “With less than two weeks to go until April price increases take effect, it’s hugely concerning that some providers have not taken action to protect financially vulnerable consumers from these hard to justify above-inflation price hikes. Telecoms providers must urgently cancel the 2023 price hikes for financially vulnerable customers.
"They should work to proactively identify these customers and ensure they’re not financially penalised, even if they don’t take up a social tariff.”
How much will my phone bill rise in April?
BT, EE, Plusnet, and Vodafone contracts allow prices to go up by CPI plus 3.9 per cent. At TalkTalk, they can rise it by CPI plus 3.7 per cent.
Meanwhile, Shell Energy can raise prices by CPI plus 3 per cent. However, Sky and Virgin contracts do not use the same pricing formula as their rivals but it has been announced that Virgin Mobile customers could see rises of up to 17.3 per cent.
BT confirmed this year it will rise prices by 14.4 per cent (CPI of 10.5 per cent plus 3.9 per cent). According to calculations from Which?, low-income customers at BT, EE, Plusnet, TalkTalk, or Vodafone who earn £21,000 or less a year could see their bills rise by up to £777 a year on average.
TalkTalk recently announced that it will exempt its most financially vulnerable customers, however, it is not yet clear who this covers. A TalkTalk spokesman said: “This regulated CPI-linked price rise is preventable. There is still time for Ofcom to act and reduce the wholesale price increases that lead to these price rises.
“These are exceptional circumstances, and families and businesses across the UK need the regulator to act.”
An Ofcom spokesman said: “Providers – like all businesses – face a range of cost rises. Wholesale costs are just one of these. Ofcom limits some of Openreach’s wholesale price rises to inflation. It’s entirely up to providers whether they choose to increase their prices, and not all of them do.
“While Ofcom doesn’t set retail prices, inflation-linked price rises can be unclear and unpredictable, and we’re concerned that providers are making it difficult for customers to know what to expect. So we’re taking a thorough look at these types of contract terms to see whether tougher protections are needed.”
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