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Sneaky UK Broadband ISP BT Inserts New 3.9% Price Hike Clause

Tuesday, September 8th, 2020 (10:12 am) - Score 21,035
UK character holding money bag isolated on white background

Customers of BT and EE’s broadband, TV, phone and mobile services are starting to discover that the ISP has made a major tweak to their annual pricing policy, which means that new and re-contracting customers will now be hit by price increases that align to both the CPI rate of inflation “plus an additional 3.9%.”

Last year’s decision by BT to link their future price rises to the Consumer Price Index (CPI) rate of inflation each year was heralded as a welcome step (here), which would reduce the impact from annual increases. Indeed, in February 2020 the operator confirmed that there would be a small 1.3% increase in the price customers pay from March 2020, which aligned to CPI just as expected (here).

All of this represented a major change for BT, which over the years has earned itself somewhat of a bad reputation for price hikes (often averaging c.4-6% per year) and often reducing the window between each price rise (i.e. effectively doing more than one increase in any given 12-month period).

Since then the UK’s economy has been hit by a sledgehammer blow from COVID-19 and millions of jobs could be lost when the Government’s furlough scheme finishes at the end of October 2020. Suffice to say that now probably isn’t the time for BT to return to the naughty step by reversing their policy and inserting a nasty new clause that will see prices hiked by CPI + 3.9% for new or re-contracting customers, but they’ve done it anyway.

The new clause was quietly inserted into their terms on 1st September 2020 and you can see how the related “annual price changes” page on their website has changed below.

SEPTEMBER 2020 (NEW) – Annual price changes and CPI

Each year we will adjust the amount customers pay per month for their plans according to the Consumer Price Index (CPI) rate of inflation plus an additional 3.9%.

The CPI rate is announced in January each year and we will adjust a customer’s bill by this amount plus an additional 3.9% from 31 March of the same year. For example, if the CPI rate announced in January 2021 is 2%, then their monthly plan prices from 31 March 2021 will increase by 5.9%.

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

This will impact the following services:

Landline
Broadband
TV
Sport
Mobile
Extra charges, like out out-of-allowance calling rates and your optional add-ons.

Have a look at the Terms and Conditions for each of your services for the full list of charges.

JUNE 2020 (ORIGINAL) – Annual price changes and CPI

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.

Both announcements make the same generalisation about the need for annual price increases to “reflect.. the costs to run and invest in the network and service that we provide,” which is true (we’re all using more data with every passing year) but it doesn’t clearly explain why BT have suddenly tacked on an extra 3.9% and in the process effectively reversed all of the goodwill they built last year.

Admittedly BT has its own financial challenges, not least with respect to managing the impact from COVID-19 and their planned investment of £12bn to roll-out Fibre-to-the-Premises (FTTP) broadband to 20 million premises by around the mid to late 2020s (2025 – 2030). The money for all that has to come from somewhere. Nevertheless, this latest change is unlikely to be well received by customers and may damage trust in the brand.

Existing customers who get hit by this next year could try haggling for a better price (Retentions – Tips for Cutting Your Broadband Bill). Credits to Sam for pointing this change out to us. We have asked BT to comment and will update when they reply.

UPDATE 10:46am

We’ve had a response from BT.

A BT Spokesperson told ISPreview.co.uk:

“While we recognise that no one likes to see their prices go up, with the major growth in data usage seen recently, both at home and on the move, we want to continue to invest heavily in our networks, products and services, simplify our packages and policies, and offer greater support and flexibility to those who need it the most.

That’s why we’re making some changes to our contract terms, and better reflect the Fairness commitments laid out by Ofcom last year, by bringing all our products and brands in line with a single annual increase, of a known and predictable amount. This is far clearer for our customers and moves away from the unpredictable changes that customers can face today across the industry.”

Leave a Comment
36 Responses
  1. Matthew says:

    Looks like EE are also doing it

    “*Annual price increase
    The monthly price shown, add-ons and all out of bundle charges will increase on or after 31st March every year by the Consumer Price Index rate of inflation published in January that year, plus 3.9%. See ee.co.uk/increase for details.”

    1. Mark Jackson says:

      Yep, updated to list EE alongside.

    2. Steve says:

      Are you going to look into sky tv’s hidden increase? The fact that they increased my bill to 8% this year should be looked into or don’t you guys look into hidden terms??

  2. Jack says:

    You also now have EE (as of this month for new and upgrading) deciding that “unlimited” data is now 600gb and anything more is considered “non personal use”

    Ofcom should state a figure they consider to be fair and then the same figure for all networks doing “unlimited”

    1. Mark Jackson says:

      I would raise a complaint with the ASA about that, they’ve been pretty strict on such clauses in the past.

    2. NE555 says:

      This is a good development IMO. I’d rather that providers give an explicit limit, rather than a nebulous “fair usage” which basically lets them set whatever limit they feel like at the time, with no recourse for the customer.

      I agree that neither approach should be called “unlimited”, but the ASA doesn’t seem to care about unlimited + fair usage cap.

    3. TheMansStan says:

      The 600GB cap is for mobile data plans (*1), which is a reduction from the 1000GB they had previously this time last year (*2).

      *1
      https://ee.co.uk/content/dam/ee-help/help-pdfs/EE-Price-Guides/ee-monthly-price-plans-02092020.pdf

      *2 info from ISPreview:
      https://www.ispreview.co.uk/index.php/2019/08/ee-uk-launches-unlimited-4g-and-5g-mobile-
      data-plans.html

      EE broadband remains totally unlimited.

    4. Mark Jackson says:

      An EE spokesperson issued this comment to me just now: “Our updated unlimited data fair usage policy means customers can use 600GB of data a month which is the equivalent of streaming 600 hours of video content. The small number of customers who do go over 600GB a month will only notice a slowing in speed if their local network is busy. EE is the UK’s Number 1 network and we want to ensure our network delivers the best service for all customers.

      Apparently fewer than 3000 of their customers consistently use over 600GB a month.

    5. Lexxr says:

      Ok so they only traffic shape after 600gb (I consider my self a high data user and and 200gb is a lot to me)

      But price increases mid contract should not be allowed (they get enough off us when we forget to renew the contract and the discount is removed

    6. Lexxr says:

      So I think 600gb is far really (if they are not cutting you off just traffic shaping after 600gb)

      Sure Vodafone and O2 would

  3. dave says:

    Does this affect BT business?

  4. JitteryPinger says:

    Such a change should surely not apply to those already under contract right?

    My contract with EE doesn’t finish until 2022 so are EE going to be forcing this additional price increase on me in addition to the agreed RPI increase?

    1. New_Londoner says:

      I’m pretty sure that both parties have to agree to any changes of terms to existing contracts.

    2. Mike says:

      Existing customers will stay on RPI increases until you upgrade and accept the new T&Cs. New smart plan benefits will be for new and upgrading customers only. Those on old plans will not be able to get the same benefits.

    3. Sunil Sood says:

      @mike

      What are the smart plans you are referring to?

  5. Iain says:

    This is sneaky as hell. When people are on fixed term contracts, the actual effective number should be headlined.

    We have been through this dance before, with line rental vs broadband charges, and hiding “plus CPI/RPI” in the small print. This is however worse because the effective increase percentage is mostly—albeit approximately—known in advance.

  6. Techman says:

    Best thing is to vote with your feet and dump these rip off merchants and go with another provider, hopefully one that doesn’t use openreach infrastructure

    1. Matt says:

      Of course, Openreach infra is irrelevant here.

      These price increases are for BT/EE Retail customers, not Openreach.

    2. Paul says:

      Not used BT since 2009 rip off company each month my paper bills came with extra charges like service charge,paper charge,VAT charge whatever they call.
      I signed up and agreed for £28 2meg broadband with weekend calls back in 2008.
      Always ended up with £35 didn’t even have the telephone line plugged in.

      Now using smarty £18 unlimited sim no more silly price increase or extra bs charges.

  7. Nathan says:

    No wonder EE appear to be so keen in offering me a new upgrade deal before the date I’m due an upgrade. I’m satisfied with my current mobile package as it’s more than enough considering the additional perks for data usage and also having an existing unlimited fibre FTTC package. Bringing the fair usage for ‘unlimited data’ packages down to 600gb, for one considering 5g, it doesn’t seem too enticing as with that speed, it will not take it long for the usage to run out? Just call packages for what they are instead of labelling them unlimited

    1. steve says:

      no private company should be allowed the word british in their name. a lot of older people are comforted by that word by thinking the company is somehow affiliated to the Uk people.

      btw will never use Bt. nearly always more expensive than competitors for a similar product.

    2. Jane says:

      Haha 600gb on 5G EE are really the king of mugs hiding behind BT cannot believe people stay loyal.

    3. Paul says:

      600GB that is sad charging this amount monthly fees even o2 and tesco unlimited data sim has 650GB this is BT/EE becoming to greedy people need to vote with your feet. Ditch anything with BT and move to other networks hit them hard.

  8. Ray Woodward says:

    The more things change the more they stay the same …

  9. Liam says:

    I don’t really see any improvements in the network infrastructure with BT. So increasing prices is so irrelevant surely existing customers can leave contract early with the price hike?

  10. Rod says:

    Three are doing this too:

    Your monthly charge will be subject to RPI increases from May each year, based on the Retail Price Index reported in February of the same year. We’ll always let you know before we make any change to your monthly charge. See three.co.uk/terms for full T&Cs.

    1. Mark says:

      Three is doing RPI increases, but BT doing RPI+3.9% ie much higher

  11. Jane says:

    Haha Mugs on EE and BT happy loving my 8 pounds unlimited sim from 3 network with EE new FUP policy of 600gb haha.

    Even three currently have RPI my bills still cheaper with my data usage is around 3TB.

  12. John says:

    You think you’ve got problems. I was sold a plan of 10GB for £70/ month by EE. When I questioned it, they wouldn’t reconsider! Been with them for over 10 years, but won’t be after this contract has expired. Even the guys in the sister store said, it was a ‘stitch up’ Shame, EE used to be a top, reputable company.

    1. Jane says:

      Avoid BT and Virgin both are the biggest scamming companies in britain they both operate like sharkloans.
      I have 4 sim card deals with 3 network all unlimited data less than £35 a month imagine 4 sim deals with EE unlimited looking around £150.

    2. Jane says:

      10GB for £70 wow defo got fleeced.

    3. Mark Wiens says:

      What’s your opinion on Vodafone, Jane?

    4. Jane says:

      Im using vodafone 5G home broadband £30 great speeds in my area well over 300meg download 90meg upload.

      Used to have Bt fibre and virgin media installed my prices kept on going up and up eachyear.

      Always test out the network on payandgo before joining a long term contract.
      Voxi payandgo runs on vodafone give them a try in your area.

      For three try smarty or superdrug both runs on 3 network paynadgo no contract.

      I rather my hardearn money goes to o2,3uk or vodafone sick of the BT group.

  13. Walkerx says:

    I’m glad I switched my broadband to Zen last year as guaranteed no price increase during or after contract period.
    Yes they might be slightly more expensive than BT or Sky but at time I took deal I was on Sky Pro and switching to Zen was cheaper with better service and speeds.
    If not happy about increases just vote with feet and switch providers.
    But why do consumers have to pay increases during contract period when businesses don’t.

  14. lucy says:

    EE not again price rises each year
    back in 2018
    I ask them for max speed on 4g they said pay extra MAX PLAN I was like wtf next question is I need 5G PLAN yes pay extra for 5G Plan wtf again all they do is rip you off and off till you have no money left in the bank.

  15. Kevin says:

    … but BT / EE / Plusnet RETAIL CPs / ISPs do not “invest heavily in our networks, products and services” – that is the role of BT OPENREACH and BT WHOLESALE, who provide the networks, products and services sold by the retail divisions.

    If these prices are being ‘passed on to’ BT Retail users to pay for the supplier investment in the network infrastructure used by all CPs / ISPs (who do not have their own cable network) why are we not seeing similar price rise clauses from them as well? Are BT retail customer bearing the whole cost of improving the wholesale network development?

    If “planned investment of £12bn to roll-out Fibre-to-the-Premises (FTTP) broadband to 20 million premises by around the mid to late 2020s (2025 – 2030)” is to be borne by the retailer user, then all retail users through whatever CP/ISP retailer should be seeing the same price increases, not just the BT retail divisions’ customers.

    This just re-enforces the merits of the BT group being split up so that wholesale supply and retail to the market divisions are not under the same operating group. BT is not good for Britain.

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