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Broadband ISP BT Defends 9.3 Percent UK Price Hike for 2022

Thursday, January 20th, 2022 (3:41 pm) - Score 8,976
BT Tower 2021 in London

The MD Consumer Customer Services at UK ISP BT (EE), Nick Lane, has today confirmed yesterday’s report (here) that they would hit customers with an annual price increase of 9.3% (up from 4.5% last year) from 31st March 2022 and said it was as a “necessary part of business … [to] keep up with the rising costs we face.”

Many of the market’s largest and most established broadband and phone providers have, over the past couple of years, adopted a model that links their annual price increases to UK inflation, specifically the Consumer Price Index (CPI) rate as published in January each year (5.4%). Often these providers will also add a flat % increase on top of that, which in BT’s case reflects an extra 3.9% (hence a total of 9.3%).

The move is somewhat of a double-edged sword. On the one hand, it provides customers with more transparency and predictability over future price rises, but on the other hand, it makes it harder to exit your contract when the increase hits (Ofcom’s rule against mid-contract hikes doesn’t apply). All of this also leaves consumers vulnerable when inflation goes through the roof.

So far only KCOM, which was due to adopt a similar increase, has taken the moral high ground and opted to suspend their planned increase for 2022 (here). Meanwhile other providers, such as Virgin Media and Sky Broadband, appear to be sticking to the old model of fixed price increases that aren’t linked to inflation. But BT, EE, Plusnet, Vodafone, O2, TalkTalk, Shell Energy and Virgin Mobile have so far retained the inflation model.

Nick Lane, BT’s MD of Consumer Customer Services, said:

“Price rises are never popular, but are sometimes a necessary part of business, if we’re to keep up with the rising costs we face and ensure we can continue to deliver a brilliant network experience as customers usage of data grows month on month. We’ve thought long and hard about how we make sure that any pricing changes are predictable, clear, and not unfairly focussed on our existing customers, but reflected in our new prices too.

Two years ago, we decided to change the way we implemented price changes. Instead of unexpected, and inconsistent price changes throughout the year, we introduced a single contracted price rise, that would happen annually from 31 March, and would reflect the rising costs to the business, and inflation – measured at CPI, and for those who’ve joined since July last year, CPI+ 3.9%.

With CPI being announced today at 5.4%, most of our customers will see an increase of 9.3%, which means for the average customer a monthly increase of £3.50.

These changes won’t be for all our customers, however. For our financially vulnerable customers on BT Home Essentials, BT Home Phone Saver and BT Basic, we will be leaving their prices as they are.

We’ll soon start writing to our customers, letting them know clearly what this year’s changes will mean for them. We’ll also be explaining why this year’s increase is necessary, allowing us to continue to offer our customers the best and most reliable connection on our networks, with the latest technologies and brilliant UK based service – and all in the most sustainable way.”

Nick goes on to highlight some of the other cost impacts on their service delivery, such as a 90% increase in broadband data usage since 2018 (79% increase on mobile since 2019), as well as the move to adopt 100% renewable electricity, ongoing network upgrades (5G and FTTP), the launch of their new Home Essentials social tariff and the recent completion of efforts to bring their customer support back to the UK etc.

We continue to work hard for our customers. We hope that by investing for the future; in our brilliant networks to meet the continuing increase in demand; in delivering the best experience for our customers through innovative products and brilliant service; and in sustainable ways of working, we will all benefit,” added Nick.

Nevertheless, cash strapped consumers, many of whom are already feeling the pinch (or perhaps it’s more of a punch) from the sudden, and quite steep, rise in the cost of living, may not be quite so forgiving when their ISP joins the price hikes club this year. People affected by this could try haggling for a lower price when the notification drops (Retentions – Tips for Cutting Your Broadband Bill), although your mileage may vary.

Naturally, if you’re out of contract, then this year’s round of hikes may just be the nudge that causes you to jump ship. 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 suspect that the new generation of Alternative Network (AltNet) providers may stand to benefit the most from all this, as many of them are currently quite competitively priced, with the aim being to peel customers away from the established players. If you’re lucky enough to live in an area where such networks exist, then this might be a good option to keep your costs down.

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60 Responses
  1. Yan says:

    I do blame Russia President for all the gas price increase worldwide. Putin are the most EVIL president ever.

    1. WibbledOff says:

      How can he control the price of North Sea Gas? It’s upto the suppliers in the UK who they buy the gas from, so if they decided to buy from Russia instead of using gas from this country you can’t extractly blame him can you?

    2. Me says:

      Why? It’s not him, he already said and it was backed up he was pumping the gas the EU asked him to through his pipe. And we hardly get any gas from Russia. The big companies are getting a very nice profit from these increased prices.
      Government could have done much much more, but instead they place a green tax in your fuel bills, that’s got nothing to do with Putin.
      Don’t read the narrow hype, read more then one source for your information.
      You need to look much closer to home with regards to fuel bill increases.

    3. Sam B says:

      Think the two commenters above me need a lesson in Supply and Demand.

      Putin chokes Europe’s gas supply, so they have to buy elsewhere.

      Some of those elsewheres is Norway and the Middle-East where we get our gas.

      That pushes up prices since there’s not enough to go round.

      The energy crisis in EU/UK is directly caused by Putin.

    4. WibbledOff says:

      Sorry Sam, but I’m sure you are like those that think it’s a crisis just because you ran out of chewing gum.

      There is no crisis lol.

    5. Regorimabitbackward says:

      I read recently we import only 1% of our gas from Russia, it appears most comes from Norway and Sweden

    6. Me says:

      I think you Sam need a lesson in how the market works, you may understand why it’s not Putin who is causing the energy price rise in the U.K.
      But by all means you trust the British government and the big gas suppliers more if you want to.

    7. John H says:

      Me is talking tosh, I am with Sam on this one.

    8. Aled says:

      From recollection, the Russians played their part, but the bigger challenges were that China basically said it wanted all the natural gas it could buy. So the Qatari’s sold huge amounts of natural gas to the Chinese instead of us.

      Then we had fairly mild winds, a fire at the French power grid interconnector and a series of other faffs and covid inefficiencies to deal with.

    9. Sam B says:

      Aled, yes. Exactly. Supply and demand.

      WibbledOff, I don’t know what rock you’ve been living under to somehow miss wholesale gas prices rising by 250%, forcing inflation to the highest level in 30 years and potentially rising further with war a very real possibility in Ukraine.

      If that’s not a crisis I dont know what is.

      As for ‘Me’, I half suspect you’re some sort of Russian CyberNat, but here;

      https://www.bbc.co.uk/news/business-60060478

      “Well, while the UK actually sources very little of its gas from Russia, that is not the case for the EU, which gets about half of its gas from the country. Most of the rest comes from Norway and Algeria.

      But that gives Russia control of the market, which means it can effectively set the price that the rest of us have to pay.”

      So yes, it is Putin’s fault.

      How some people can be so blind as to what’s going on in the world is beyond me.

    10. SillyCommentSillyReply says:

      So, Putin dictates our financial policies which result in CPI % does he?? Dont be so naive. If anybody is to blame, point fingers at past governments for causing this cost of living crisis. Putin doesnt control the global spot markets/Futures market prices. Nor, does he control the North Sea fields, OPEC and their Cartel has a much bigger role to play in increases in global prices as they set the floor and price range of the majority of the worlds Oil prices, the US havent come running to our aid with their LPG tankers to help ease our burden either,using your rationale why not blame Biden instead. Putin has installed a new pipe line bypassing Ukraine and increased production/export of NatGas through NS-2. Anyway, why am i replying about geo political issues on a post covering UK Telco/ISP price hikes. I think these hikes are just a reflection of the true costs which markets have up until now been able to absorb/offset, now we get to feel the Sting from all the ineptitude in poor desicion making by OUR GOV. Nobody else.
      Oh, and those greedy Private interests involved throughout every step of the system taking their fees, inflating true costs. The biggest take away, currency debasement/stagflation.
      What makes me laugh is they blame the increase of data usagage… Wasnt this planned for/modelled prior to 24mo prior?

    11. NatGasToISPHikes says:

      LOL @Sam B quotes the BBC. Totally impartial when it comes to ALL THINGS RUSSIA. Aled is closest to actual series of events in lead up to natgas spikes. But to add, we had to buy our quota off global spot markets, we decided 10yr fixed contract is not a good idea and was better to buy on global markets and compete with China etc. (its not working out so well and was a stupid move made just to satisfy the USA)

    12. Sam B says:

      Who knew an ISP news site would be where the conspiracy and anti-BBC people would congregate?

      SillyCommentSillyReply, the UK Government is certainly culpable also, dont get me wrong. Especially for deciding to close down Rough storage. A massively shortsighted move that leaves us incredibly vulnerable to wholesale market fluctuations.

      Also for allowing cowboy Energy companies to bet on market prices like they’re in a Las Vegas casino…

      But its a fact Putin is choking has supplies. And he’s doing it for two reasons. One, he wants NS2 approved. This allows him to transport gas to Europe bypassing for former eastern block states like Ukraine denying them the transit fees they charge to allow gas through pipelines on their territory, a valuable source of income for them, making them more susceptible to his influence.

      Two, by reducing gas to Europe he also reminds Governments how much their economies rely on Russia for energy making them hesitant to commit a response if he invades Ukraine.

      Based on Germany’s actions and statements lately, it seems to be working in both counts.

      “So, Putin dictates our financial policies which result in CPI % does he?”

      Well, considering most of inflation is being driven by the ridiculous cost of energy. Yes, he does.

    13. John H says:

      With an inelastic supply the swing producer holds the key to prices. So Putin holds the key when he turns the tap one way or the other. The Chinese shot themselves in the foot when they banned Aussie coal and switched to gas and Putin took advantage.

  2. Anthony Goodman says:

    This is why never showing loyalty to an ISP is paramount. As soon as your contract is up go elsewhere for an introductory deal. Then rinse repeat.

    1. WibbledOff says:

      Actually that’s why loyal customers end up paying more as the are constantly subsiding introductory deals for new customers.

  3. Pezza says:

    Well I’m with IDNET and haven’t had a single increase and doubt I will, but I pay more in the first place. However you can budget for that easier.
    I think this increase is shocking but so is inflation and our governments total lack of action over it. Indeed their policies are causing it to a large extent.
    We can expect every price and bill to increase over the next year. Because the companies in turn have to pay increased bills.

  4. NE555 says:

    Are they increasing their package prices for new customers by 9.3% as well? If not, then this negates all their arguments about needing the money for “network improvements” or whatever.

    All it’s doing is keeping the initial advertised prices artificially low, by hiding the true cost over the contract period.

    1. WellSaid says:

      Exactly!!!

    2. TMG says:

      Shut up man. RPI and CPI are nothing new so why do people act the same at this time of year. Like they never knew it existed or would affect them. You’re told at the point of sale. Whilst it’s a brutal increase this year round, plan ahead.

  5. Paul says:

    Lot of households will be “having the conversation” whether to downgrade their Internet speeds and reduce Sky/Cable subscription channels to basics due to all these inflationary hikes taking their toll (not just telecoms but everything)

    Makes me slightly worried about whats going to happen actually. Considering 25 UK Energy firms have gone bust etc…

  6. William Wilkinson says:

    No price increase with Starlink!

    1. Laurence 'GreenReaper' Parry says:

      Probably ’cause their prices are already sky-high!

  7. Cheshire Pete says:

    I joined BT in March 2020, so my 2 years is up come March 2nd. I’ve been on Fibre 300 Halo for £44.99. That was discounted by £5. I am the older CPI with no escalator. Because I lose the discount plus get a CPI rise there’s no way I’m paying £10 more for 300Mbps @ £54.99. If I move to a new package I then move to CPI+3.9 for the future!

    Talk Talk will be getting my business, £40 for Fibre 500 and fixed for 18 months. No brainer!

    1. WibbledOff says:

      What will you do after 18 months?

    2. Cheshire Pete says:

      Talk Talk state you stay on the same price at contract end. Both their Fibre contracts currently have no mandatory price rises. Anyhow, in 18 months I’ll obviously see who is doing the best deal!

    3. WibbledOff says:

      That means after 18 months you would still be subject to price rises and therefore you would continue to be a deal hunter. The funny thing is if people stopped doing this then everyone would have cheaper bills. Ironic really lol

    4. Anthony Goodman says:

      “The funny thing is if people stopped doing this then everyone would have cheaper bills. Ironic really lol”….The insurance companies showed that they wouldn’t. They’d just keep raking in the extra money. This day and age you need to just accept you switch after 12 or 18 months to a new provider no matter what, insurance, mobile phone, broadband etc.

    5. Cheshire Pete says:

      You have an interesting angle on this.

    6. NE555 says:

      > The insurance companies showed that they wouldn’t.

      Funny you should mention that, but the rules have just changed so that insurance companies are now forced to offer the same deals on renewal that they would offer to a new customer (with the same risk profile).

      https://www.moneysavingexpert.com/news/2021/10/martin-lewis–the-big-insurance-rule-change-on-1-jan-2022/

      It’s not quite the same issue being discussed here, which is companies raising their prices mid-contract. That would be like the insurance company phoning you up and asking for some extra premiums mid-way through the year.

  8. Zaida says:

    And yet they gave employees no pay rise last year and I bet, if any, this years pay rise won’t match their price increase. Big business for you I guess.

    1. Fastman says:

      think they agreed pay deals over a number of years period for non management grades – management grades did not get get payrises last year or year before

  9. DougM says:

    If enough companies automatically increases prices by CPI + n%, surely that will itself drive CPI to higher levels and lead to ever greater increases?!

    1. Laurence 'GreenReaper' Parry says:

      In theory, yes, though I suspect the impact over the whole basket of goods would be minor – the big issue is that all prices are rising.

  10. James says:

    Moan moan British public stop moaning work harder in life just taken 10hrs extra work every Saturdays and even stop going out on Saturday night and limit myself to 1 takeaway meal once a month…

    1. sam says:

      Sad life!, no life at all for you.

    2. sam says:

      @Damien – you ended up paying more taxes with 83 hours that’s what the Tory want! Taxes off u and laughed at you.

    3. Claire smith says:

      James,Plenty lazy sods want everything cheap 9 percent bill increase they moan £3.50 extra hardly going make you go bankrupt BT staff need food on the table including the hardworking CEO upgrading the network cost money want cheap internet go to 3 mobile you will see how bad cheap internet is…..

  11. Scott says:

    This is coming along at just the right time – there are a lot of BT staff who have not seen a pay rise for +2yrs.

    Extra money will coming in will be handy when attempting to pacify the unions! 😀

    1. Bt emp says:

      Sadly, BT’s response to this extra cash re staff renumeration is to cut bank holiday rates and withdraw sick pay for new bt consumer (bt ee plusnet) employees to statutory sick pay only.

      That’s correct, more money, higher prices = feck our staff.

      Still, bosses will get a bonus, so… you know. Cough up.

    2. JmJohnson says:

      Considering a bank holiday is just a set day when most companies take a legally protected holiday you should be happy that you get any extra for working it, the actual holiday is added to your holiday entitlement to take when you like.
      Almost every company I know of operates on the standard SSP policy now.
      Seems like a case of entitlement here.

    3. Bt emp says:

      BT are certainly entitled. The point is they are cutting their operating costs and putting less money into local communities via employment – which is relevant as they often boast about their impact in their reports – however despite these levelling down cuts to their people, and having benefits of tax cuts and public subsidies – they feel it ok to rise prices to customers at breakneck speeds….

    4. anonymous says:

      BT Group have a bunch of very well funded competition investing billions in taking business away. This competition is working to do things better, cheaper and more efficiently than BT, and are subject to less regulation.

      If you want to work somewhere that’s more focused on putting money into local communities a non-profit is the way to go.

      Lots more job losses coming. Fibre doesn’t require anywhere near as much maintenance as copper and breaks far less often.

      I look forward to seeing the picket lines, as I’m sure do VMO2 and CityFibre.

  12. S.G says:

    I genuinely think mid-contract price rises should be prohibited in any shape or form. Signing the contract for say 24 months should guarantee price and other terms for that period. It should be down to tbe business to accurately forecast their costs and incorporate it in the price. Otherwise ISPs just shift the responsibility and most of business risks onto customers. That just sounds to me like a very dodgy and indolent way of managing business risks.

    1. Sunil Sood says:

      I would also like to see price rises during a contract stopped (with exceptions such as if the VAT rate changes).

      I dislike this trend of automatic price rises – at least before you could leave or renegotiate your contract.

  13. rich says:

    This is the reason I will avoid BT, EE, Plusnet ther big three’s will never be trusted with signing up contract with mid term price rise! Hate them three isps.

    1. Ben says:

      In fairness TalkTalk, Vodafone, and other providers also feature mid-contract price rises at inflation busting rates.

  14. Mj says:

    I don’t understand why anyone chooses BT as an isp. There is so much choice and they are always so expensive regardless of all this in contract price rise BS

    1. Mike says:

      @Damien

      There are many resellers of Opreanch FTTP, not just BT.

    2. sam says:

      @Damien – that’s totally rubbish. Many isp’s do have FTTP.

    3. Fastman says:

      there is a number of ISP choices for openreach FTTP, its up to the commercial decisions of each individual ISP whether they choose to consume FTTP or not , There are a number of things that i wont bore you with that could factor into a decision of whether to consume FTTP or not –

    4. tech3475 says:

      When I signed up they were the cheapest for FTTP where I live.

      It’s only since then that cheaper alternatives have appeared and yes I am switching.

      Currently looking at Talktalk or Cuckoo.

    5. Claire smith says:

      im on bt the best provider the best customer service happy to pay atleast £50+ a month better than having a poor man internet eg like Zen and those people using cheap 4g unlimited sim cards like cheapskate i really laugh at people using Aldi to do their weekly shopping M&S ftw

    6. anonymous says:

      No, you don’t, ‘Claire’. I’m not clear why people keep pretending to be wealthy on here and use it to look down others but it’s likely the one person doing it repeatedly.

      Those people shopping entirely at Aldi are keeping essential services running, doing jobs that many of us either couldn’t or wouldn’t, and are paid less than they should be.

      As part of wider shopping Aldi have some fantastic stuff that cannot be purchased pretty much anywhere else.

      This attempt at snobbery is weak. Most of those with the means to shop at M&S 1) aren’t going to make a big deal of it: it’s just where they shop and 2) aren’t going to write semi-literate messages about how awesome they are due to, err, shopping at M&S.

      Snobbery is one thing, and is normal, I’m guilty on occasion, this is just sad.

  15. GNewton says:

    Why are BTs cost 3.9% above CPI?

    And have Openreach wholesale prices risen too?

    1. anonymous says:

      Weirdly enough the costs of an individual business aren’t tied to CPI.

    2. anonymous says:

      On the matter of Openreach pricing BT Consumer don’t buy from Openreach, they buy from BT Wholesale, who charge per Mbps/month for capacity on the product BT Consumer consume.

      A little research, as in about 5 minutes on Google, goes a long way.

    3. NE555 says:

      https://www.ispreview.co.uk/index.php/2021/07/openreach-unveil-major-fttp-pricing-offer-for-uk-broadband-isps.html

      Openreach’s unregulated FTTP prices will rise by CPI-1.25% or 0%, whichever is higher.

  16. DaveO says:

    What is the justification of BT basing price rises the CPI? The CPI is based on the average price of a basket of goods and services a consumer buys which includes things like transportation, food and medicines. How exactly does an increase in price of any of those affect BT’s business? They aren’t as far as I am aware bulk buying bananas or aspirin.

    It seems to me to be a cynical mechanism of guaranteeing themselves a price increase year on year as inflation is rarely zero or negative.

    If their costs really do warrant a 9.3% price increase they (and other companies doing this) should justify it with specifics. Not try and con people that increasing prices is inevitable because the CPI has gone up when they as a company will not be affected by the increase in prices of many goods that make up the CPI basket.

  17. Eduard says:

    Does anyone know if for eg. BT Business line gets this increase?

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