Hyperoptic Survey Finds Confusion Over Broadband Price Hikes
A new survey commissioned by full fibre ISP Hyperoptic, which was conducted by Attest during October 2022 and surveyed 1,000 UK broadband bill payers, has found that many consumers continue to be confused by the language that providers use when communicating mid-contract price hikes.
The survey found that more than 80% don’t know what CPI (Consumer Price Index) refers to, which is important because many of the market’s largest broadband providers have – over the past three years – gradually adopted a ‘CPI + 3.9%‘ policy of annual price hikes (BT was the first to introduce this approach).
The CPI is a general measure of inflation (i.e. the increase in the prices of goods and services), which reflects how much more we’re all having to pay for such things. As such if CPI inflation is 11.1% (as it is today) when a provider’s annual price hikes policy kicks-in, then an ISP adopting the CPI + 3.9% rule will – on average – increase its prices by 11.1% + 3.9% (total of 15%) to compensate.
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Apparently, half of the survey respondents said they felt “confident” about working out a percentage rise to their bill, but only 23% got the figure right when trying to calculate the actual sum (they were allowed to use phones and calculators) and 27% said they didn’t know or that it was “too complicated“. In fairness, the impact can actually vary between different packages and add-ons, thus simply applying 15% won’t always give the correct outcome.
In response, Hyperoptic, which has long campaigned against mid-contract hikes (admittedly it’s also a clever bit of self-promotion on their part), has written to the heads of Ofcom, DCMS, and the ASA and CAP (Committee for Advertising Practice), to encourage “emergency measures to protect consumers during the cost-of-living crisis“.
The letter calls for:
➤ an immediate requirement that advertised price claims must clearly set out any mid-contract price rises,
➤ that advertising includes a clear explanation of the calculation, and
➤ the real impact it will have on what customers are going to have to pay.
The Committees of Advertising Practice (CAP and BCAP) – sister bodies to the Advertising Standards Authority (ASA) – are currently running a consultation on new guidance that could require information about mid-contract prices hikes to be more prominently stated in ads (here). Hyperoptic’s latest lobbying effort is thus being timed to coincide with the closure of that consultation tomorrow.
Dana Tobak, CEO of Hyperoptic, said:
“The big broadband providers are taking advantage of inflation rates to boost their revenues, at the expense of people already struggling to cope with the cost-of-living crisis. This behaviour is eroding trust in the industry.
The practice of forcing mid-contract price rises on people is causing real consumer harm, and we want to see big changes so that broadband users are better informed and protected.
At the very least, the price you pay throughout the contract should be transparent in all advertising. We also want Government and Ofcom to go further, so that if a price increases mid-contract, you should be able to turn to a new provider without paying early termination charges.”
The outcome of the current consultation seems almost certain to require greater transparency from broadband and mobile providers, as opposed to the usual approach of merely mentioning the policy in a piece of small print. But it will take time for the advertising authority to review the consultation responses, so we suspect it may be early or mid-2023 before the final approach is known.
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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 X (Twitter), Mastodon, Facebook, BlueSky, Threads.net and Linkedin.
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The regulator should cap mid contract rises.
I have never understood CPI + X percent. If you need to cover inflation then maybe fair enough but if you always keep raising my more than inflation you will keep pushing inflation higher, never ending spiral.
Imagine if they banned mid-contract rises (so the price advertised is the price paid throughout the contract)
Then imagine if they banned “introductory” offers – like what happened to the Insurance industry.
We might actually have fair, consistent pricing. It’d also encourage shorter contracts as it moves the risk from the customer to the provider. They’d be able to drop the amount of marketing staff too!
I’ll keep dreaming.
If there is a price set in the contract then that price should be honored, not increased
If the price is allowed to rise then I should be able to exit the contract without any penalty
You are. You sign up to the CPI+ as part of the T&C’s, and it’s a regulatory obligation to point this out at point of sale – anything outside of this gives you the right to exit.
Not true, if I exit then I pay the full amount
Previously, any changes which were of ‘material impact’ to consumers meant you could leave your contract without penalty.
Since the EECC regulations came in to effect in the Summer, if there are any changes to your contract then you are free to leave without penalty.
If your contract stated the CPI+ clause, then yes, you’ll be bound by that clause – but you signed up to it, that’s on you.
Look it up.
John, you’re absolutely right. HullLad is completely glossing over the misleading way in which mid contract price rises are presented. That makes the mid contract price rises potentially unfair and unenforceable, regardless of the small print.
So again… I’m unable to leave my contract even if it goes up by 20%
I knew from the headline that Hyperoptic would be an ISP with no in contract price rises, they must be using the same PR/survey company as Zen!
It’ll soon change when the owners watch their margins eroding…
What confuses me is the right to cancel. I thought that everyone has the right to cancel if your ISP hikes the price mid-contract. Turns out that’s not the case and it very much depends on the contract you signed. Yes of course, but honestly who reads 100% of the contract they sign with an ISP?
I hope that I can leave virgin media through price hikes as I had little choice but to sign up again and they only offered 18 months, but cityfibre are doing the rounds here and I want to jump over to them.
CityFibre are good but can take a while, once the ducts are in the ground it can still be amny months till you can order. They should be done by the end of your VM contract.
In the olden days mid contract price hikes meant you could leave your contract without penalty. Now with them saying, we are going to increase your prices mid contract. Means you cannot do this. The olden days need to come back
Unless your contract explicitly says that you’re subject to the CPI+ price rises, then you can. The EECC came into effect in the summer which meant precisely this.
However, if the CPI+ clause is in your contract, then you agreed to it when you signed up.
Mid contract price rises are insignificant as far as I’m concerned, a 15% price hike on £21.99, (our current monthly price), per month broadband contract pushes the monthly bill up to £25.29, or an extra £39 over the year; What’s more significant is the end of contract price rises, which tend to be considerably higher than CPI+3.9%.
It makes no odds who you’re with, you can guarantee you’ll be heavily stung if you don’t switch at the end of the contract. We recently switched broadband providers, knocking £1.51 a month off the bill, but the price would have gone up from £23.50 a month to £35.50 a month if we’d stayed with our old provider, so we’re currently saving £13.51 a month just by switching, or £161.12 a year.
CPI/RPI is mentioned regularly on all the mainstream TV channels, so anyone who doesn’t understand CPI+3.9% needs to take a basic maths course at night school. As far as the end of contract significant price rises are concerned, that’s the reason I switched, nothing to do with CPI+3.9%. Anyone who doesn’t switch is guilty of apathy and probably can’t be bothered about their service cost, personally I wouldn’t have switched but for the end of contract price hike.
That takes into consideration you keep hopping contracts. Lets take a 18mo VM £60 gig1 contract. You’ll have 12x £60, then 6x £69. So an increase of £54 over the year (almost an extra month for VM..)
Now take an out of contract price, of £139/mo. If you don’t move after 12mo again, that’s now going to be £159.85/mo. an additional £20.85/mo or £250/year extra.
Comparing your pricing to new-introductory offers will always look good – because that’s the carrot to get people moving regularly. I wonder how many people don’t do this (they must be paying a fortune).
By being here you’re already in the low % of people who take an interest in this, let alone keep an eye on it and search for the best prices / happy to swap providers.
Have to remember things have come along way in the last 5/10 years in terms of migrating between providers. People will have had bad experiences which will put them off, especially if they’re WFH / Hybrid working.
I agree.
I think they should have “Standard” pricing only, and EVERYONE gets it. (Locked for first year/18m/term at standard price on signing up). Heck, VM can’t even tell me what my “Standard” price is, and when I recently went through retentions I had to go through 3 levels (all UK staff) to get a “deal”. Should have kept saying no I guess.
£62.25 for M200 (Now 250 Meg) + worst phone package (I receive perhaps a dozen calls a year on the line, make 0).
That’s what you get when children leave secondary school with the reading and maths similar to an average 7 year old from the past.
The constant experimentation of the education system, and then there’s the dumb parents trying to abolish private education so their thick kids can get in there and disrupt education for all the 30+ kids in that class…
We should have tests at different age and segregated the abled and disabled or mentally challenging kids into different schools, then those kids can be the order giver to the thick order takers when in the workplace.