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ISP BT Match UK Broadband and Mobile Price Rises to CPI Inflation

Friday, January 11th, 2019 (7:37 am) - Score 2,405
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Customers of BT’s broadband, mobile and phone services may be interested to learn that the ISP is making a major change to how it handles price rises. From today any new or re-contracting customers to those services will see new terms (T&Cs), which state that future prices will increase by the Consumer Price Index (CPI) each year.

Previously BT had developed a rather controversial tendency of announcing a major new price hike every 9 months or so, which was often followed a few months later by rivals making a similar move (most of their rivals tend to stick to a fairly predictable annual rise). Overall such announcements have tended to increase core monthly pricing by around 4-6% each year, which is often well above the current level of inflation.

By comparison the Consumer Prices Index (CPI) 12-month rate was 2.3% in November 2018, down from 2.4% in October 2018 and some are even forecasting that it could go negative toward the end of 2019 (depending upon the outcome of Brexit and other factors). Nevertheless BT has decided that customers’ prices will now increase by CPI each year.

The T&Cs will change from today, although the first annual increase under this new model will not impact customers until March 2020 (based on the January rate each year). In other words, if the January (published) rate is 2% then from March 2020 your prices would increase by 2% (e.g. a monthly price of £40 would go up to £40.80 in March 2020).

BT Statement

Your broadband, mobile and landline monthly plan prices will go up in line with any change in the rate of CPI. Lots of our extra charges, like out-of-allowance calling rates and your optional add-ons will go up in line with CPI too.

The price of our pay monthly plans increases in line with CPI so we can keep pace with inflation. This reflects the increase in the costs to run and invest in our network and service we provide you, and allows us to invest in new technology and make sure we give you the best possible service.

Under this model customers can expect to see much less aggressive and more predictable price increases. Interestingly this is very different from how most Mobile Network Operators (MNO) conduct their annual price rises, which tend to adopt the Retail Price Index (RPI) instead of CPI. RPI is usually much higher than CPI (in November 2018 it was 3.2%). Mind you mobile operators do sometimes raise prices above inflation too, so this may not strictly stop BT from doing that as well.

As BT states above, prices tend to rise because operators are adding all sorts of new services, developing new systems and consumers are also gobbling significantly more data every year. Suffice to say that service improvements cost money and ultimately the customer will always end up paying. Providers are also under pressure to adopt all sorts of new rules, such as having to cater for the forthcoming automatic compensation system (here).

However one potential benefit to BT of this new approach is that they’re known to have been bleeding customers over previous quarters (they stopped reporting their customer figures around the same time), although by adopting the CPI rule then Ofcom’s mid-contract price hikes rule may become much harder to argue (i.e. this gives you the ability to exit your contract penalty free if you’re hit by a major hike but some inflation linked rises are allowable).

NOTE: In relation to this BT are also removing the price freeze guarantee from their premium Plus packages (i.e. Plus benefit: Broadband Price Freeze for 18 months).

UPDATE 10:25am

We’ve added BT’s main statement below.

A Spokesperson for BT told ISPreview.co.uk:

“We‘re committed to providing our customers with the best experience, service and value in the UK and that is why we are leading the way in the industry. From 2020 we will link any future price changes to the Consumer Price Index (CPI) inflation rate. We will not be increasing prices for BT broadband, home phone and mobile plans in 2019.

While prices changes are sometimes necessary to keep up with increasing costs and to provide the best possible products and services, we know that customers want greater clarity and predictability about any price changes. We’ve listened to our customers and from 2020 we will be moving to once yearly price changes for BT broadband, home phone and mobile customers.”

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Mark Jackson
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.
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20 Responses
  1. Avatar Phil

    More Greedy from BT, same as greedy MPs. That’s UK biggest rip off in the world.

    • In fairness this seems to be promising significantly smaller and more predictable price rises going forward, so at present it looks to be an improvement on the model we usually see from the big ISPs. But we’ll have to wait and see how they handle it going forward to know for sure.

  2. Avatar wirelesspacman

    Hmm, I wonder if this is a g’teed maximum price rise, or in effect a g’teed minimum one? In the sense of will it actually stop them making further increases if and when they choose?

    Also, of course, they could just as easily remove this from the Ts n Cs a year or two down the line.

  3. Avatar dave

    As far as I can tell this is a sneaky way to allow them to raise prices without having to let you out of contract.

    Previously, they raised by whatever arbitrary amount they chose and had to let you out of contract if it was detrimental. Now however since the rise is inflation linked and in the T&C’s, they won’t have to let you out of contract. So it’s a way to increase prices without losing customers, IMO.

    • Avatar davidj

      Spot on, they as the news piece indicates have probably been bleeding customers due to price rises, this way means they wont have to let you go 9 months in to your 18 Month contract or similar. Avoid BT at all costs IMO.

  4. Avatar mrpops2ko

    Damn. This looks like the end of free 80/20 broadband for me. For the past year BT and EE have effectively provided me free internet via the cashback + reward card system.

    Real shame to see them not raising prices this year either. It means i’m locked into my BT contract until 2020 =(

    all this when virgin media might be doing 500/35

    • Avatar dave

      If you’re doing what I think you’re doing, then I believe you will be fine one more time as your current contract will have been made under the old T&C’s.

    • Avatar Phil

      No chance of virgin media 500/35 not for a very long time! They only select a few pilot trial for business only.

    • Avatar davidj

      200Mb and 350Mb was trialled for just under or over a year if i remember right, so i would not be shocked to see 500Mb as a product for all from VM before the end of the year.

    • Avatar CarlT

      @phil

      Don’t write nonsense you don’t have a clue about. I am aware of the target timeline for both business and residential 500Mb. It’s not a really long time. Remember my posting a 600/40 speed test with 2 connections? It’s not that massive an upgrade.

      They also aren’t trialing to select businesses. We don’t get used for trials for obvious reasons. They are exclusively using residential customers.

      They aren’t just trialing 500/35 by the way. 😉

  5. Avatar jason

    Just glad I ditched BT and Virgin Broadband paying £10 unlimited data on 3uk sim installed 4g router speeds around 80mb about time 5G take off next couple years and sink BT and virgin

  6. Avatar Spurple

    Bandwidth is getting cheaper but ISPs continue to find ways to raise prices.

    • Avatar CarlT

      We use 30-50% more of it each year. Equipment has gotten more expensive over the past couple of years, too.

  7. Avatar Mark

    Their shouldn’t be any price rises during a contract period. But they are allowed to do what they like. I agree that this will most likely allow them to increase your contract price but they will not be obliged to let you leave without penalty.
    It’s what EE do and why I won’t go with them, plus they increase their pricing at the highest percentage over other operators.
    And as for MVNO’s Tesco Mobile does NOT increase contract prices during your term, they still have a strict policy against it.

    • Avatar Jason

      Mark, I agree with you EE,BT mobile,O2 are the most greediest company in the UK.

      Beyond me how could EE charge someone £100 a month for 18 months for mobile broadband with only 500gb data usage allowance.

      I even questioned EE over at live chat they kept on saying we are the fastest speed in the UK so on.

      The only two mobile providers that offer great value for money is 3UK and Virgin mobile the rest are robbing people blind.

    • Avatar CarlT

      People will pay it, Jason. There is a lot more to value for money than just price. Cheap is one thing, value another.

  8. Avatar Arthur

    Hi I was looking at my BT account have bt increased the price of line rental to £19.99
    Per month

  9. Avatar Meadmodj

    The move to CPI should be welcomed in principle as it at least means that those on fixed incomes such as pensions, benefits and minimum wage will at least not lose out cumulatively year on year in real terms if they remain on a defined package. Hopefully not only Broadband/Telephony but other industries such as Rail etc will do the same (although unlikely).

    However in-contract price rises raises the issue of misrepresentation. Typically an advert will state the contract length, the monthly charge and the regular monthly charge at the end of the contract. My view is that a price rise is a significant event and on a longer contract you could actually experience two annual rises. BT and other providers should be able forecast inflationary factors and their costs for the period of 12 or 18 month contracts and therefore it is unacceptable that it is not clearly indicated in the headline offers shown on their web sites and comparison sites not buried in T&Cs.

    As far as BT goes I don’t understand why they continue to undermine their own product offerings (Plus) as once bitten twice shy. Same goes with VM with their connect fee.

    It really should be be for the average consumer to have to calculate the projected annual cost including all rental, one offs and forecast inflation for each provider.

  10. Avatar Van win

    Just last night BT updated my line and modem to high speed Broadband.
    Today my top speed is 10 MBps, and this having done many speed tests including Which? consumer Assoc.
    Have put modem in best possible position, no other user in house online.

    Wow, how fantastic is that?

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