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UK ISP TalkTalk Follows BT to Hike Broadband and Phone Prices

Thursday, August 27th, 2015 (1:07 pm) - Score 1,459

It’s not been long since TalkTalk announced their last batch of price rises in April 2015 (here) and the bad news is that they’ve today hit customers with a second hike, which will take the standard price of their entry-level broadband package from £5 to £7.50 a month and push line rental from £16.70 to £17.70.

At this point we should remind readers that the ISPs popular unlimited SimplyBroadband service started out in 2013 as a £2.50 per month package with no free UK calls (note: you still have to add TalkTalk’s line rental on top) and has thus risen at a startling pace since then.

The mid-contract price rises are typically above any impact from inflation, which means that under Ofcom’s guidelines customers who don’t like the change should be able to exit their contract penalty free within 30 days of receiving their price notification letter.

No doubt the other ISPs will follow suit with similar price hikes, just as they always do around this time of year (always after BT has lead the way), in due course.

Broadband and Line rental changes – from 27th Aug

 Package  New Price
SimplyBroadband £7.50
Line Rental £17.70
Talk Eve&Wknd with Broadband £10
Value Line rental £191.16 (from 30th Sep 2015)

Call rate changes – From 1st Dec

 Package  New Price
Call connection charge 17p
Standard and discounted international rates Various (click here for more detail)
TalkTalk landline access charge 7.5p per min
TalkTalk mobile access charge 25p per min

NOTE: The International Prefix – 18418 – Service will no longer be offered from 1st Dec 2015.

Leave a Comment
7 Responses
  1. Avatar Graeme says:

    YES!!! signed up went live on the 11th of this month I will be canceling when I get this email

  2. Avatar Steve Jones says:

    It’s a very simple pricing model for the likes of TalkTalk. Ofcom’s margin squeeze tests all but guarantees a profit margin (the clue is in the name), so BT Retail can never compete on price. They have to choose other routes (like BT Sport – but then even that gets looked at). Those ISPs targeted at the mass price-sensitive market just have to undercut BT Retail’s pricing by a modest amount.

    Existing as an LLU ISP is a volume game, so there’s not much chance for a really cheap new entrant to appear. Also, many of the costs are identical to all, so you end up with a market like this. A lead player who couldn’t compete on price, even if they wanted to, due to a deliberate regulatory policy (a margin squeeze test is a lot more of an intervention than the application of predatory pricing rules under competition law). High cost of entry (it’s a volume market and requires significant investment) and not many ways to differentiate products.

    I think the ISPs will only be able to push this so far. If retail line rentals keep going up, somebody will notice the competition model is broken.

    1. Avatar DTMark says:

      As I’ve argued for a long time, the vertical monopoly model cannot work.

  3. Avatar Jazmin says:

    I wish people would realise that they can re-negotiate their contracts each year with tececoms and isp’s like they do with their mobile phones but most don’t bother.

    This year I was out of contract with sky for tv phone and fibre. I found an excellent deal with plusnet but had no intentions of leaving sky so phoned them and told them what offer I could get elsewhere. The plusnet deal was £8.99 a month for 6 months then £20 a month for their premium 76mb package. Fibre pro from Sky was already given to me at a discounted £20. To beat plusnet they lowered my phoneline to 9.99 a month and halved my multiroom subscription.

    The previous year to beat a deal I got fibre at £20 which I kept this time around plus 1/3rd off the entertainment package for 5 years with free HD.

    You just have to get the right person at your provider who is willing to do a deal, otherwise just leave and get a better deal.

    1. Avatar Steve Jones says:

      They can, but I don’t think many people want the hassle of negotiating annually with their ISP. They’d rather have a decent value deal without all the hassle. One of the problems is that the churn rate and the massive early discounts to new customers have to be paid for one way or another, and it’s by hiking up the rates to “normal” long term customers who have other things to spend their time on than spend time waiting on a call queue to talk to a customer rep and then negotiate with uncertain outcomes.

      Unfortunately, it seems to be the modern way. Encouraging customer churn (as regulators like to do to prove the market is working) is all very well and good, but if it causes large acquisition costs and attempts to claw that back over time, then this is what you get. I think it’s called the “loyalty penalty”…

    2. Avatar DTMark says:

      ..or short-termism. The way in which the major providers sell broadband is not unlike the way in which DFS sell furniture – there’s always a sale on.

  4. Avatar N H says:

    The problem with renegotiating is if you have an 18 month contract and pay for line rental 12 months in advance. You therefore have 6 months of line rental at the higher rate until you have the leverage to renegotiate the price.

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