Broadband ISP KCOM Scraps Inflation Linked UK Price Hike

UK ISP KCOM, which has so far built a Fibre-to-the-Premises (FTTP) broadband network to cover 250,000 premises across East Yorkshire and North Lincolnshire in England (here), has made the hugely positive decision to scrap their contractual CPI + 3.9% price rise for this year to help customers facing the cost of living crisis.

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.

Like a lot of other major ISPs, KCOM was preparing to implement a Consumer Price Index (CPI) plus 3.9% price rise in March 2022, which given the huge surge in inflation during 2021 (the latest figure hit 5.1% and the next one could be even higher) could have resulted in a massive price hike for existing customers – reaching around double the normal amount.

But unlike other providers, KCOM has decided not to pass on these rising costs to its customers and “cancelled the contractual price increase.”

John Rooney, KCOM Retail MD, said:

“We are all aware that the past few years have been challenging for many people. The uncertainly caused by the Coronavirus pandemic and the recent rises in the cost of living have made life difficult for many families as they’ve had to tighten their belts to make ends meet. Despite this, access to fast, reliable broadband has never been more important as we continue to work and stay connected to our friends and families more than ever before from home.

As a business that’s been at the heart of the local community for nearly 120 years, KCOM has always done whatever it can to help and support its customers wherever it can. As a local business with deep roots across the region, our customers aren’t just our customers, but they’re also often our friends, families and neighbours.

That’s why, this year, we’ve decided to keep our prices the same and to not add to the burden of rising costs that we are experiencing in everything from our utility bills to our shopping baskets.

While other providers are continuing to implement their contractual annual price rises of 3.9%, plus the rate of CPI inflation, in their customers’ bills, we have decided not to. This means our customers will not see any increase in their KCOM bill in the year ahead due to CPI.

Hopefully this will help our customers plan their household budgets with more confidence in the next 12 months and also leave a little more money in their pockets to help pay for life’s essentials.”

KCOM’s move should be welcomed, although it remains to be seen how they handle next year’s increase (i.e. in the past we’ve seen ISPs adopt a price freeze, only to hit customers with an even bigger increase the following year). Nevertheless, CPI is expected to expect to fall back a bit in time for 2023, which may help matters.