Stealth Price Rise – Sneaky TalkTalk Scraps Speedy Payment Discount

It’s become increasingly difficult this year to describe TalkTalk as a “low cost” broadband provider, what with so many sharp price rises stealing our headlines. But now customers are about to lose yet another benefit with the ISP quietly moving to scrap their 10% Speedy Payment Discount.

The Speedy Payment Discount can be applied to most of TalkTalk’s services, although it’s not available on their Mobile bills and doesn’t apply to their pre-paid Value Line Rental because that is paid separately. The discount actually use to be worth 15%, but it was already reduced once at the end of last year (here).

In fairness the discount system hasn’t always worked that well, with some customers failing to even notice the relevant offer and email delivery delays sometimes making it difficult to claim, although the ISPs customer support teams were sometimes willing to rectify this.

Never the less TalkTalk has quietly decided to scrap the 10% reduction from 1st December 2015. The date might be familiar because that’s when some of their latest price increases are due to be introduced, which were first announced in August (here). Mind you a quick look at the relevant page on TalkTalk’s website shows that the ISP neglected to mention the loss of their Speedy Payment Discount (here).

The move is also controversial because TalkTalk has already radically increased its entry-level SimplyBroadband package prices over the past couple of years. The service started life in 2013 at a cost of just £2.50 per month, which came after they removed their free calls bundle from the package, but since then the price has reached a new high of £7.50. Meanwhile line rental has also continued its inflation busting rises.

Mind you TalkTalk are not alone in this, with most of the major ISPs all hiking both their standard broadband + phone prices this year and often going well beyond what we’ve seen in prior years. The situation is such that this week even Ofcom expressed concern (here).

Sharon White, Ofcom’s CEO, said:

“There are signs in recent months of rising prices for landline and broadband customers, without the apparent justification of higher costs or improved service. BT, Sky, TalkTalk and Virgin Media have all raised line rental prices this year.

This might be a temporary blip in the market, and there are still good offers out there for people who shop around. But customers who worry about the hassle of leaving their current provider, especially older people, can face higher bills. We are concerned about this, and we are watching these developments in the market closely.”

No doubt Ofcom’s claim to be “watching” these developments will have the big providers quaking in their boots (that’s sarcasm by the way). On the other hand there are those who may rightly argue that the price of broadband in the UK has been too low and needs to rise in order to fuel investment in future upgrades, such as TalkTalk’s joint deployment of ultrafast 1Gbps FTTH broadband in the city of York.

As a budget ISP TalkTalk doesn’t bring in a huge profit and so re-adjusting their prices to change that balance is one way to help build reserves and boost investment, but the downside is that their customers will also be expecting service and support quality to improve. Otherwise you’re just treating customers like a squeezable money bag and lest we not forget that TalkTalk appeals more to those with lower incomes.