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Study Slams UK Broadband ISPs for Post Contract Price Hikes of 62%

Wednesday, August 29th, 2018 (12:01 am) - Score 2,086

A new study of home broadband packages offered by some of the UK’s largest ISPs – including BT, Sky Broadband, TalkTalk, EE, Plusnet and Virgin Media – has claimed that subscribers can face “steep price rises” of up to 62.5% (an extra £152 annually) if they stay loyal to their provider and don’t switch away.

The culture of offering big discounts to new broadband ISP subscribers, which typically only last for the first minimum contract term after you sign-up (12 or 18 months tends to be the most common term length), is nothing new. Indeed many other industries offer similar promotions and energy providers will often drop you back to their standard variable rate tariff after the first term ends.

The obvious downside of this is that you’re likely to face a sharp post-contract price hike and in our experience not all ISPs make this information particularly clear, even during the order process. In fact often the post contract pricing will merely be consigned to the small print, which can be difficult to both find and understand (credits to BT and Sky Broadband for showing these clearly).

In an ideal world all ISPs should be stating their post-contract prices clearly on the packages and directly alongside each product (i.e. without needing to start the order process or tackle tedious small print), but sadly this often doesn’t happen. Publishing such key information would enable consumers to make an easier and more informed comparison.

Now a new study by uSwitch.com has re-examined the pricing of packages from the biggest ISPs and discovered that standard broadband contracts jump by an average of £152 a year (almost £13 a month) the day after their contracts end, while those on faster “fibre” based services (includes hybrid fibre) are said to face a 53% hike in their monthly payments (i.e. leaves them paying £158 more a year).

Table 1: Difference between in-contract and out-of-contract prices (standard ADSL packages)

Provider Package Monthly in-contract price Out-of-contract price Difference (month) % Difference
BT Broadband £24.99 £45.49 £20.50 82%
Sky Unlimited Broadband £18 £30 £12 66.7%
TalkTalk Unlimited Fast Broadband £17 £27 £10 58.8%
EE Unlimited Broadband £20 £31 £11 55%
Plusnet Unlimited Broadband & Phone Line £19.99 £29.98 £9.99 50%
Virgin Media n/a (no ADSL service) n/a n/a n/a n/a
AVERAGE £20 £32.69 £12.70 62.5%

Table 2: Difference between in-contract and out-of-contract prices (entry-level “fibre” packages)

Provider Package Monthly in-contract price
Out-of-contract price Difference (month) % Difference
Virgin Media VIVID 50 Fibre Broadband & Phone £27 £42 £15 55.6%
Sky Sky Fibre Unlimited £25 £38.99 £13.99 56%
BT Superfast Fibre Essential £28.99 £44.49 £15.50 53.5%
Plusnet Unlimited Fibre Broadband & Phone £23.99 £34.98 £10.99 45.8%
EE Unlimited Superfast Fibre Broadband £26 £36 £10 38.5%
TalkTalk Unlimited Faster Fibre £19.95 £33.50 £13.55 36.7%
AVERAGE £25.16 £38.33 £13.17 52.9%

Admittedly there are some caveats with this data, which the comparison site overlooks. For example, it should be noted that TalkTalk claims to allow existing customers to re-contract via “the same great deals as new customers” once they end their first contract term. Meanwhile others, such as First Utility, have pledged “not to increase your monthly charge” post-contract (we’re unsure how that one will hold up long-term).

Lest we forget that smaller ISPs also exist and these, despite tending to cost a bit more (you may get better service quality), are less likely to tie you into a long contract or hit you with a hefty price rise post-contract. Likewise when it comes to switching, choosing to pay rock bottom prices can sometimes mean a sacrifice in service or support quality (this is often location as well as ISP and technology choice [ADSL vs Cable etc.] dependent).

The study does at least remind us that Ofcom recently proposed new rules that will require broadband, phone, Pay TV and mobile providers to inform customers when they’re approaching the end of their minimum contract term (here). This is a useful change but there’s still room for encouraging ISPs to publish their post-contract pricing in a clearer and more transparent way.

On the flip side such discounting shouldn’t be feared and is a normal reflection of our aggressively competitive market. Nevertheless some providers do need to improve how they display their prices so as to avoid misleading consumers into joining a service that could turn out to be dramatically more expensive further down the road, but this seems unlikely to happen unless Ofcom or the Advertising Standards Authority (ASA) step in.

We note that only a small portion of people actually switch ISP in any given year (around 10-15%), which means that many are likely to stay loyal. We should point out that our own ISP Listings tend to put the post contract pricing in brackets alongside the main discounted contract prices (where that information is available to us and not hidden by the provider).

Consumers could also try calling an ISP directly and trying to haggle for a lower price at the end of their term: Retentions – Tips for Cutting Your Broadband Bill Without Switching ISP.

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By Mark Jackson
Mark is a professional technology writer, IT consultant and computer engineer from Dorset (England), he also founded ISPreview in 1999 and enjoys analysing the latest telecoms and broadband developments. Find me on Twitter, , Facebook and Linkedin.
Leave a Comment
12 Responses
  1. wirelesspacman says:

    Maybe there should be an enforced wealth warning prominently displayed and/or spoken at the point of sale? Something along the lines of…

    “Please note that we fully intend to rip you off with massive post contract price rises should you choose to remain loyal to us.”

    Yeah, I know – pigs might fly!! 🙂

  2. Kits says:

    Crazy considering smaller ISPs continue to supply the broadband at the same price as they paid in contract on a rolling monthly contract.

  3. Dean keithley says:

    When your contract is up, its important to ring up your ISP and negotiate a better price. I did this recently with BT, was paying £29.99 in-contract (Fibre). Contract was about to end, where price was to increase to £45.99. So I started to switch to another provider. BT sent the usual retention email, for which I called up and negotiated a better deal, even cheaper than current contract (£23.99!). I think when your ISP knows that you will leave, you are in a much better position to secure a better deal…..otherwise then vote with your feet and leave.

  4. andyroochoo says:

    not sure why virgin media isnt included.

    After offering me a 3 play deal for £37 a month for 12 months, they wanted £53.50 a month whilst offering me broadband with a 50% speed reduction.

    Just werent interested in keeping me around so its goodbye

  5. Stephen Wakeman says:

    I’ve read stories where FTTC customers on a “full” cabinet, who then change their ISP for a better deal have ended up losing their place and then being stuck without FTTC as the incumbent provider has viewed it as an end of service.

    Is there any truth to this being a possibility in the general scheme of things? Only if I was on a cabinet where there was a waiting list I’d think twice about going to another ISP if I thought there was ANY risk of me losing service.

    1. Mark Jackson says:

      Yes in the 3-4% of VDSL2 cabs where port capacity is currently constrained (i.e. a “waiting list” applies to new orders) then switching ISP can create the problem you describe, leaving the switching customer stuck with ADSL2+ as the only option. But there are so few cabinets in this position that very few consumers suffer from such issues.

      Many capacity problems can be solved within a few weeks, although those that require civil engineering may take months or possibly even longer to resolve.

    2. Martin Pitt - Aquiss says:

      This will not happen (ie: lose your cabinet port) if the gaining provider is correctly using the Sim Provide process.

  6. Bob Jones says:

    Something is wrong with the arithmetic re the TalkTalk fibre per cent increase…

    100% * 13.55/19.95 = 67.9%

  7. EndlessWaves says:

    Why is nobody offering the middle road for FTTC?

    For ADSL I can get a good service for £20-22 a month without no expectation of that rising faster than costs as the ISP tries to claw back large up front discounts.

    For FTTC the choice seems to be between big up front discounts or services that are as expensive as the discount ISP’s out of contract pricing.

  8. BT - Big Thief says:

    Who would have thought BT were top of the list at shafting people over ADSL, and up there with the worst of the worst on Fibre ‘something’?
    TheFact’s (BT/Openreach Marketing department) and CarlT will hopefully arrive to defend them with warms words like ‘not commercially viable’, ‘rural scroungers’, and ‘your claims are unfounded’.

    1. graycoll says:

      What a cultured addition to the debate. Very erudite. Well done.

  9. Brian says:

    I’ve always looked around towards the end of contract term, rung retentions, and if they can’t offer a good price change providers, after all there is a limit to what a 3.0down/0.3up service is worth.

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