Customers of UK Broadband ISP BT See Small 1.3% Price Rise

As expected UK ISP BT has now begun reminding customers of their various consumer fixed line broadband, phone and mobile services that they should expect a small 1.3% increase in the price they pay from March 2020, which has been matched to the CPI level of inflation (Consumer Prices Index).

The change to match future price rises to inflation, which mirrors what primary mobile network operators have been doing for years, was officially announced a year ago (here) and is now being implemented. Some reports have expressed this as a price “hike“, but that’s perhaps unfair since the annual rise is significantly below the c.9 monthly hikes of around 5-6% that we previously saw from BT.

The adoption of a predictable inflationary increase also means that Ofcom’s rule for tackling mid-contract price hikes cannot be used to escape your contract early. Indeed the 1.3% increase is actually pretty good since that just so happens to represent one of the lowest points for CPI in the whole year (e.g. 1.3% in January 2020 vs 2.1% in July 2019).

However there are some exceptions or delays to this increase, which BT explains below. Likewise other products, such as pay TV and BT Sport, will receive their annual price rises later in the year (not announced today).

BT’s Price Rise Statement

Each year we have an annual price rise. If you’re a new customer or re-contracting mobile, broadband or landline, you’ll see new terms and conditions that tell you that your prices will increase by the Consumer Price Index (CPI) rate of inflation each year.

Mobile and broadband customers who signed up or re-contracted on or after 17 January 2020 will receive their first CPI price rise in March 2021. Mobile and broadband customers who signed up or re-contracted between 11 January 2019 and 16 January 2020, will receive their first CPI price rise in March 2020.

Landline customers, if you have a phone or call plan or calling features, these will increase by CPI from March 2020 in line with your current terms.

Each year we will adjust the amount you pay per month for your plan(s) according to the Consumer Price Index (CPI) rate of inflation. This rate is announced in January each year and we will adjust your bill by this amount in March of the same year. The CPI rate announced in January 2020 is 1.3 per cent, so your monthly payments from March 2020 will increase by 1.3 per cent.

This reflects the increase in the costs to run and invest in the network and service that we provide.

As BT hints above, prices also 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 the customer will always end up paying. ISPs are also under pressure to adopt lots of new rules, such as having to cater for the new automatic compensation and end-of-contract notification systems.

The fact that customers affected by this won’t be able to leave their existing contract penalty free, since Ofcom’s mid-contract rule won’t apply to inflationary increases like this, doesn’t prevent people from contacting BT to moan and haggled for a better price (Retentions – Tips for Cutting Your Broadband Bill). Likewise if you’re out of contract then you could always consider switching to a different provider. Long story short, this is actually a big improvement on BT’s old approach.