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

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.”