Community Fibre Adopt Simple £2 Policy on Out of Contract Price Rises

London focused UK broadband ISP CommunityFibre, which has so far covered 500,000 premises in the city with their new Fibre-to-the-Premises (FTTP) network, has today adopted a new policy that will “implement a £2 out of contract price increase on all its broadband packages for new customers“.

The move, which has already been implemented for existing customers, is being expressed by the provider as their “bid to set a new industry standard by openly challenging other broadband providers to do the same“. The change also includes the flexibility for customers to continue with their broadband package on a 30-day rolling contract at just £2 more, or cancel with just 30 days’ notice.

The change of policy helps to explain why CommunityFibre reduced the post-contract prices on almost all of their broadband packages by more than £2 per month last week (here). Prior to that their post-contract hikes were much steeper; thus the ISP’s change could effectively be seen as a price cut, at least for those who choose to stay loyal post-contract.

A lot of ISPs tend to offer big discounts to new customers, but these usually only last for the initial contract term and the post-contract hikes can then be extreme. In some cases, those who stay loyal at the end of their minimum term can find themselves paying as much as double what they were before. For example, Hyperoptic’s 900Mbps package jumps from the extremely cheap point of £35 per month to £60 post-contract, while Vodafone’s similar tier goes from £45 to £55.

Graeme Oxby, CEO of Community Fibre, said:

“Not only should consumers look at the savings they can make when they first select a broadband provider, consumers should also be aware of the savings they can make once the cost of their out of contract bill comes into effect. Therefore, we are introducing a standardised £2 out of contract increase across all our packages, to provide visibility and relief for new and existing customers who may be concerned about their bills rising.”

The idea certainly has merit, but by standardising a £2 out-of-contract hike, they may also be making it harder to offer bigger discounts to new customers. On the other hand, consumers are more likely to remain loyal if the service quality delivers and there isn’t a huge cost difference between the original and post-contract prices.