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Big UK Broadband ISPs Can Now Confirm Huge 2022 Price Hikes

Wednesday, January 19th, 2022 (9:52 am) - Score 14,712
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The Office of National Statistics has today published the latest UK inflation figures, which sees the Consumer Price Index (CPI) hit 5.4% and the Retail Price Index (RPI) reach 7.5%! Many of the country’s biggest broadband ISPs base their annual price rises off the figure published in January, thus we now know how huge the hit will be.

Annual price hikes are of course nothing new in this and other markets. Often there are legitimate reasons for prices to go up, not least because ISPs are frequently adding all sorts of new services (e.g. FTTP), developing new systems, facing higher charges from suppliers, implementing costly new Ofcom rules and consumers are gobbling significantly more data every year. But 2021 was more unusual than most, which is partly due to the rapid return to normal economic activity post-COVID-19 and various other factors.

At the end of last year we warned (here) that the recent surge in inflation, which largely reflects the rising cost of living (i.e. high gas prices, more expensive products etc.), would hit customers of BT, EE, Plusnet, Vodafone, O2, TalkTalk, Shell Energy and others the hardest because of how closely they’ve linked their annual increases to inflation. Lest we forget that such providers have also been affected by rising costs.

Nearly all the aforementioned ISPs typically inform customers that they will increase prices by a set rate of 3.9% (3.7% on Talk Talk and ‘up to’ 3% on ShellEnergy) + the CPI rate of inflation as published in January each year (February for O2, who also happen to use the steeper RPI figure instead of CPI).

Back in December 2021 we predicted that consumers could be facing annual price hikes of around 9%, which are often formally introduced to customer bills from around the March-April period. So where did we end up? This is what customers of the aforementioned providers, and others that link to CPI or RPI, can expect:

Summary of 2022 Price Hikes by CPI Linked UK Telecoms Operators

BT 5.4% CPI + 3.9% = 9.3% Price rise (up from 4.5% last year)

EE 5.4% CPI + 3.9% = 9.3% Price rise

Plusnet 5.4% CPI + 3.9% = 9.3% Price rise

Vodafone 5.4% CPI + 3.9% = 9.3% Price rise

O2 [February RPI rate TBA]

TalkTalk 5.4% CPI + 3.7% = 9.1% Price rise

Shell Energy 5.4% CPI + 3% = 8.4% Price rise

Virgin Mobile (New Customers) [February RPI rate TBA]

We should point out that Virgin Media recently opted to continue with a more modest annual price increase (here) and Sky (Sky Broadband) usually do the same – these aren’t directly linked to inflation. Meanwhile, KCOM chose to take the high ground by scrapping price rises for 2022, due to a concern about the potentially huge impact of CPI on customer bills (here).

No doubt customers of Virgin Mobile and O2 will be particularly worried about next month, given the massive increase in RPI, although the total for that is not too dissimilar to the wider CPI + X% rates being planned by other providers above.

Customers of the aforementioned ISPs, once formally notified of the increase by their provider, could try haggling for a lower price when the hike hits (Retentions – Tips for Cutting Your Broadband Bill), although your mileage may vary. Likewise, there are still some ISPs around, often smaller players, that don’t play the annual price hikes game, but you’ll often pay a little more for those.

We should point out that the % price rises predicted above should be seen more as an average, with the increases for particular packages and services tending to vary.

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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.
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38 Responses
  1. PM says:

    This country are WORSE OFF now as Boris is lying to us all in Brexit.

    1. Jake4 says:

      It’s nothing to do with brexit, US’s CPI increase for 2021 is 7%.

    2. Looney Lefty says:

      yawn. go back to reddit/twitter.

    3. Gareth says:

      LOL, how do you explain the same inflation spikes in the US and all over the world if Brexit is the issue? You people are demented.

      We would still be facing the same rises if Labour had won and Brexit had not happened, because the pandemic doesn’t just stop due to which political party is in power…..

    4. anonymous says:

      You both voted leave and for the Conservatives in 2019.

    5. Gareth says:

      What’s your point? Like I just stated, who and what you voted for will make no difference to the current state of the economy during this pandemic and the fact that the world is experiencing a surge in inflation.

    6. MattP says:

      @Jake4 It’s a straw man argument to compare the UK and US economies. A fairer comparison would be France or Germany whose economies are closer in size, are subject to similar pressures and most importantly continue to be in the EU. Their consumer inflation is higher than their average, but lower than ours.

    7. Gareth says:

      Germany was at 5.2% in November…..Bloody Brexit! Causing German inflation LOL

    8. anonymous says:

      I wasn’t responding to you, Gareth.

    9. I says:

      It’s not ‘just’ the lies over Brexit, it’s also his wife’s green agenda being forced onto everyone and the rise in taxes and other increases, and it’s down to the banks and building societies behaving disgustingly with the way they are making their profits through questionable means and refusing to pass interest rate rises into savers.
      So inflation has sky rocketed as a result and everyone has to pay the price.

    10. Mike says:

      He did lie over Brexit, he left North Ireland to rot in order to placate the EU.

    11. james says:

      It’s the result of QE following the 2008 crash. In short the chickens have come home to roost. If anything Brexit will, to some degree, insulate us from shocks within the EU.

  2. Mike80 says:

    “The Office of National Statistics has today published the latest UK inflation figures, which sees the Consumer Price Index (CPI) hit 5.4% and the Retail Price Index (RPI) reach 8.4%! ”

    But https://www.ons.gov.uk/economy/inflationandpriceindices states the RPI figure announced today [covering Dec 2021 & published 19 Jan] is 7.5% not 8.1%.

    1. Mark Jackson says:

      Odd, I checked the chart earlier and the figure for Dec 2021 (published today) changed. Anyway, you’re correct, it is now 7.5%.

  3. NE555 says:

    Plusnet is different: “From June 2021, our broadband and line rental prices will increase each June by the CPI rate published in April of that year.”

    https://www.plus.net/help/legal/our-guide-to-price-increase-for-home-broadband/

    1. NE555 says:

      Hmm… but MSE says it’s changing to March from 2022 onwards. I guess we’ll see, but really consumers ought to be able to trust what Plusnet publish on their own website.

    2. NE555 says:

      OK, I found the newer information (which conflicts with the other page):
      https://www.plus.net/help/legal/cpi-plus-guide/

    3. Mark Jackson says:

      Curious..

      https://www.plus.net/help/legal/plusnet-price-guide-for-residential-products/

      “For any customers who signed up to a contract from 30th June 2021:- A percentage price increase will be applied to the price of broadband, line rental, call plans and call charges. This price increase will be applied on or after 1st March each year from March 2022 and will be equal to a percentage comprising of i) the Consumer Price Index (CPI) rate figure published by the Office for National Statistics in January of that year plus ii) 3.9%; and”

      https://www.plus.net/help/legal/cpi-plus-guide/

      “On or after 1st March every year from March 2022, we’ll take the CPI percentage rate published by the Office for National Statistics in January of that year and add an extra 3.9% to the rate”

      So they still seem to be using the January published rate.

    4. NE555 says:

      It looks like they have indeed changed to March update using Jan CPI.

      However the page I first linked to is the one which is the top hit if you google “plusnet annual price rise”. It would make sense for Plusnet to remove misleading and obsolete information from their own website.

  4. Meadmodj says:

    The real issue whether the general index’s reflect the increased costs a corporate would experience and in the case of comms that new technology (say 10Gbps to 100Gbps upgrades on core fibre and energy efficiency of equipment) should be offsetting cost rises.

    I don’t see any yearly increases in my Energy contract and the Financial Conduct Authority has on deemed existing car insurance customers should not pay a loyalty penalty compared with new customer offers.

    So what is Ofcom’s agenda?, looks like Equity Fund Investors.

    1. Mark Jackson says:

      ISPs do have a problem with energy costs too, just like everybody else, but it often depends on when their contract renewals fall:

      https://www.ispreview.co.uk/index.php/2021/10/high-energy-costs-risk-impact-on-uk-broadband-and-mobile-prices.html

    2. Meadmodj says:

      The decision to apply CPI + was before the current Energy issue hit us. Yes I will pay more for my Energy eventually if current rises do not reverse and I will also pay more on Car insurance if there are more accidents. The major ISPs will have hedged their energy supply.

      My issue is that companies are allowed automatically link their costs to an index + increases for investment without any test that they are applicable and appear to be waved through by regulators, where as pay and private pensions are running below increases with the state pension likely to be held back in future.

      Yes major ISPs offer products if you are on UC/Pension Credit but those not on these but on a fixed income for the foreseeable future will be progressively worse off.

    3. anonymous says:

      The drop in price per Mbps of core capacity has slowed and now I believe stalled.

      Much as prices of other technology are now higher for the same equipment than they were 2-3 years ago.

      400G LR optics are quite a bit more than 10 times the price of 40G. 40G quite a bit more than quadruple the price of 10.

    4. Bob says:

      But ISPs are seeing significant cost increases.
      – Increased staff costs
      – Increased wholesale costs
      – Increased energy prices
      – Increased fuel costs
      – Increased rental fees
      – Increased costs for electronics like CPE to name but a few.

      Many of those increases are well above the rate of CPI. I think its fair to argue that “CPI + 3.9%” is too much but not fair to imply ISPs are not seeing yearly cost increases.

      The advantage to linking an increases to an index like CPI is that at least consumers have clarity. You know what price increases you’re likely to see. As apposed to something less transparent, like amount linked to an ISPs direct cost increases. And having those announced with just a couple of months notice each year giving little or no time to budget.

      If I know I’m going to have a price increase from my ISP I’d rather have a sign of what that increase might be.

      The big issue this year is the rate at which the cost of living has increased.

    5. Meadmodj says:

      I accept that however the entry level of broadband is increasing in real terms and the differentials between speed products is small.

      So someone with a very moderate internet usage on a fixed income, who may not benefit from any of the FTTP initiatives for the next 4 years, is seeing their ADSL or poor performing FTTC increasing in cost by possibly 20% over the next four years. I’m not saying that there should be no cost increase but that it is proportionate.

      My view is there should be an affordable entry level product even if it is data capped.

  5. At says:

    Some of these companies CEOs seem to be greedy see you next Tuesdays.

  6. Crotchety says:

    Bet your bottom dollar the companies will not take a hit to their profits, if we ,as Boris says “are all in this together” then that should also apply to companies and their profits. There has always been a them and us attitude in the UK which has been fostered by the unfairness of price increases. It’s a catch up situation always with the lowest paid unable to catch up through lack of leverage.

  7. Johnny says:

    Just switched providers because BT was too expensive at 30mbps (couldn’t get full fibre or the 80 mbps openreachsays is availablein my area bc the cabinet is full and theyre not increasing capacity). honestly if ISPs couldn’t raise prices for anything less than 30mbps that would be great. It would also make them roll out fttp quicker

  8. Mark Jackson says:

    Like Virgin Media, they usually do standard price hikes and not CPI linked ones.

  9. Starman says:

    Glad I’ve been with ZEN for a few years now no worries about annual price rises!

  10. Andrew says:

    A number of us AltNet & ISPs guarantee no price increases while in contract, and while we might adjust prices on an annual basis that only takes effect for new/renewing customers rather than automatically. I agree this is an attempt by Openreach (they started it and hence all their ISPs follow suit) to slip price increases through to all customers irrespective of contracts.

  11. hmm says:

    Interesting thing with Three mobile as they announced that “customers who joined the operator after 29th October will find that they have abandoned this approach and are instead adopting a flat annual increase of 4.5%, which is to be applied each April” https://www.ispreview.co.uk/index.php/2020/11/three-uk-and-vodafone-adopt-inflation-busting-price-hikes.html

    However those on older contracts will be hit with an amount “up to” the RPI. Wonder if we will get a larger increase than those on newer contracts.

  12. Richard Walton says:

    and Tories are supposed to look after the economy. We all know they look after themselves and like to party

    1. GaryH says:

      Yummy, I just cant resist troll bait 🙂

  13. plunet says:

    I wonder what proportion of operating costs are represented by electricity bills for an ISP. Considering those on commercial contracts are seeing prices double assuming they are not in a fixed rate deal, this must be a real cost increase to an ISPs bottom line.

    1. inflation is bad says:

      if they deploy fibre then they should mostly have passive equipment. if they are on copper then yes increased electricity can hit them hard

    2. Laurence 'GreenReaper' Parry says:

      I guess this is how fibre will finally become cheaper than DSL – it costs too much energy to run the latter!

  14. Michael says:

    When is a fixed price contract NOT a fixed price contract? Answer:When its in the UK.

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