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UK ISP BT and EE Set Out Approach to Annual Broadband Price Hikes

Wednesday, Jan 18th, 2023 (2:33 pm) - Score 8,832
bt smart hub 2 router front

BT’s consumer division (inc. EE and Plusnet) has today set out their approach to this year’s annual price hikes, which will see them increase their broadband, phone and other prices by the contracted CPI of 10.5% plus 3.9% – for a total of 14.4% – for the “majority” of their customers from 31st March. But there are exceptions.

As per this morning’s article (here), many of the market’s largest and most established broadband and phone providers have in recent years adopted a model that links their annual price increases to UK inflation, which in this case reflects the Consumer Price Index (CPI) rate as published in January each year, plus an additional 3.9% on top.

On the one hand, this method 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 itself hits (Ofcom’s rule against mid-contract hikes work here). All of this also leaves consumers vulnerable when inflation goes through the roof, much as it’s now doing.

However, BT points out that this year’s hike won’t impact all of their customers, with about 3 million being safe from it. The reason for that is because, firstly, they’re “freezing the price of line rental, call packages, call charges and call add-ons for our landline-only customers” (i.e. those who do not have fixed broadband with BT or another provider).

In addition, BT’s social broadband and phone tariff – ‘Home Essentials‘, as well as EE’s similar Mobile Basics, Pay-As-You-Go, BT Basic and Home Phone Saver customers will also see their prices frozen through 2023 as part of the operator’s commitment to support those who need it most.

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

“For those customers who will be affected by the price change it’s important to put our price change in context. Telecommunications as a sector provides incredible value for money when you think that our customers are using as much as 50 per cent more data every single year. In fact, customers in the UK are some of the highest data users in Europe. At the same time, the cost of their combined fixed and mobile services are among the lowest in the region.

We are also a small proportion of household spend every month – recent research says this is around 3.8%. And, with everything else on the rise, that small proportion is in fact decreasing: the average household spend on telecoms services has fallen by 19% compared with what it was five years ago.

With the CPI rates now published, we expect our price change will mean an average increase of just over £1 a week for most people on broadband or mobile. Meanwhile, costs are going up by considerably more for everything else – energy costs the starkest example – with consumers not getting anything extra for their money. Just the same thing, only more expensive.”

In playing devil’s advocate, it’s also important to point out that broadband and mobile operators are NOT immune to cost increases. Most ISPs are suffering under the burden of rising supplier and lease costs, as well as energy prices and the ever-rising levels of consumer demand for data, which is partly touched on above.

Internet providers are also frequently adding all sorts of new services (e.g. FTTP), developing new systems and implementing costly new Ofcom rules and government legislation, which means that price hikes, especially in a market of extremely high inflation, are hard to avoid. But if customers really want to fight against this, then vote with your feet and switch, or at least give haggling a try (Retentions – Tips for Cutting Your Broadband Bill).

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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 X (Twitter), Mastodon, Facebook and .
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29 Responses
  1. Avatar photo anonymous says:

    Predictable. That’s why I’ll never do business with either BT or EE ever again. The first or one of the first to introduce such pricing strategy.

    When costs go down, highly unlikely to pass it on either to existing customers. When FTTP first came along in my mum’s area, they could only choose BT back then as that’s all was offered till the other providers started coming on board. They’ll be taken off EE (even though service was fine) and go with another provider JUST because of the greedy yearly hikes that just get added to, whilst new customers get the original lower price.

    No point being loyal to any company nowadays – best to hop around them and grab the offers and free gifts or cashbacks.

    1. Avatar photo HR2Res says:

      With BT/EE, and most/all(?) other providers, even if inflation were 0% or negative you would still have agreed to a contract that goes up in price every year, by 3.9% in BT/EE’s case.

    2. Avatar photo anonymous says:

      Other ISPS not doing mid contract rises or if they do, not inflation busting ones that are OVER inflation.

      Rip off BT/EE – always has been. Lets hope customers leave in droves when their contracts are up.

      Even VM (so far) do not have CPI/RPI + 3.9%. It could change but that’s been correct since BT/EE sharks first introduced their pricing rip-off strategy.

  2. Avatar photo CitizenKane says:

    You know I’ve got a crazy idea. How about they just take a couple million off the salary of each higher up and stomach the price rises for a couple of years? I’m sure they will still be fine with their 5 million+ each a year. I could be wrong though I do have some wacky ideas.

    1. Avatar photo HR2Res says:

      There are 12 listed board members, executives and non-executives. I think only the executive directors Crozier, Jansen and Louth will be in the multimillion ball park (£2m to £3m p.a.?). The non-execs will likely get a pittance by comparison, although that pittance is likely lot more than my annual salary. Now, there are caveats in all this, but the scale is essentially correct. If you took a million or two off each of the execs, then in a year you’d have a max of about £6m to redistribute annually among about 20-30 million customers, which equates to about, say, 20-30p per year off each customer’s bill, or about 1.5-2.5p per month.

      So, despite how obscene you think some exec salaries may be (and I do, though they may be considered as poorly paid compared with some Premier League footballers!), the maths makes their remuneration insignificant in terms of the effect on your monthly bill.

      Halving BT profits for last year and returning that to the customer as, say, a loyalty bonus, would bring even less joy to the customer. They made a pre-tax profit of just less than £2m last year, which after tax drops to about £1.25m. Divide the previous figures by about 4 to get a ball-park figure of the effect of that profit halving on your monthly bill.

      Add the two together and it still has a non-negligible effect on a monthly bill.

      The next question might be, so where did all their approx £20b turnover go? For the answer to that you’d have to dig down through their accounts.

    2. Avatar photo HR2Res says:

      Oops! By “still has a non-negligible effect on a monthly bill” I meant “still has a negligible effect on a monthly bill”.

  3. Avatar photo JamesP says:

    I don’t have an issue with mid-contract price rises, but if prices increase then the contract I have with the ISP should be null and void – I should be free to move to another provided without penalty.

    Seems fair to me.

    1. Avatar photo I know its crap but its what you signed up for. says:

      @JamesP You can leave without penalty if you receive a mid-contract price rise unless the contract you signed up for sets out that you’ll receive a mid-contract price rise and sets out what the rise will be. In that scenario all they’re doing is exactly what you signed up for. I know its annoying and seems unfair but it was your choice to agree the contract.

    2. Avatar photo Wilson says:

      If the price is allowed to increase then the customer should be allowed to leave, simple as

  4. Avatar photo GreenLantern22 says:

    Mid-contract price rises should be banned. They are not being used to adjust prices based on cost but as a profit generator ripping customers off. Yes prices go up and ISPs costs could be higher but when you see that new customer prices have been constantly going down you see something it’s not adding up. I don’t believe ISPs will sell you a contract below cost at a loss. You can take a hit on signing up new customers but on most cases ISPs make a profit even on new customers (excluding new FTTP areas). So how come the new customers get a better deal than exiting customer? It’s a rip off. I have been blessed with an Altnet installing in my street and I will getting their service soon. Then I will jump between ISPs to whoever gives me the best price/service combination. But I know most people won’t (lazy) or can’t (lack of choice) do that.

  5. Avatar photo Phil says:

    But 14.4% seems like a very nasty price rise but why is 14.4% accepted by Ofcom? Bloody rip-off UK. Surely this not allow because the current inflation has come down less than 11%

    1. Avatar photo Mml says:

      Not illegal if customers have agreed to this clause when taking out their contract. It’s different with me, as I’ve taken out my contract before this clause was common, and my provider (Shell) still added it to my contract some years later. Not sure how legal was that.

  6. Avatar photo Doubleagent2022 says:

    Does that mean 4g and 5g broadband as-well

    As my broadband a 5G router router I brought my self from Amazon and a data only sim .

    1. Avatar photo Mml says:

      Are you in contract for that SIM? If yes, your price will rise. If no, then your price will still rise but you can avoid it by taking out a new contract come April. I’m planning to do just that.

    2. Avatar photo Doubleagent2022 says:

      Yes I am I took that data only sim last may 2022.

  7. Avatar photo Rupert Murdoch says:

    Worth nothing both VM and Sky don’t have either RPI and CPI in there TV/BB contracts (and mobile for Sky). They both make it clear if prices do rise during your contract you can leave it without early termination charges. Find it strange that 2 of the biggest ISPs can do it but none of the rest?

    1. Avatar photo Laurence 'GreenReaper' Parry says:

      Simply put, Sky is already overpriced to start with, while Virgin is less reliable and higher latency, so can’t justify such a condition (and if they did try raising prices otherwise it would be a great chance for people to leave).

  8. Avatar photo alan says:

    I threw in the towel with Plusnet a year ago switching to mobile broadband
    I purchase the Data SIM on a rolling 30 day contract, so can switch whenever I like to chase the cheapest deal
    I was getting about 24Mbs download with PN (FTTC) now with Mobile its approx 48Mbs
    No brainer

  9. Avatar photo NE555 says:

    “with consumers not getting anything extra for their money. Just the same thing, only more expensive”

    That was surprisingly honest of BT to be so open about what they’ve just done!

  10. Avatar photo Steve says:

    So that will see my 300mb broadband go from the original £40 per month to £49.99 per month in less than 2 years. A nice earner for BT but I will almost certainly leave once my contract is up.

  11. Avatar photo Vim Baselink says:

    Ofcom not fit for purpose. The “in contract CPI rises” is a racket, yet Ofcom turns a blind eye. Ofcom in the pockets of the Broadband companies.

    1. Avatar photo Jamie Simms says:

      Most of the UK regulators are in the pocket of the suppliers, ABTA is the same with Travel , OFWAT and OFGEM lots of back handed things go on at both of them. Policy set to suit the companies and preferences given to larger providers

  12. Avatar photo ACDeag says:

    I find the worst thing is you can sign a contract in February and you get the full annual increase in April, that is just wrong.

    1. Avatar photo Laurence 'GreenReaper' Parry says:

      And of course BT is running radio ads.

  13. Avatar photo Matt says:

    I was fortunate then, just took out a home essentials contract. 62Mbps for £20 a month, no brainer for me.

    1. Avatar photo Chief says:

      Sadly not, home essentials is their social tariff, I.e for people receiving benefits, disability etc. They’re capped to slower speeds so if you’re on 68Mbps then it isn’t the social tariff.

  14. Avatar photo BT can suck it says:

    Looking like I’ll be “moving to Hull”. Took 900Mbps Halo 3 Feb last year at £55/month. After 2 months it went up to ~£60/month and will now climb to ~£69 after a price increase. I understand inflation is increasing costs for everyone & every business but £14/month increase in 14 months is horrendous.

    Funny how they can offer exactly the same plan to new customers for £56/month with 6 months half price & a gift card…

    Service is fantastic, fast and reliable. It’s NOT however worth £20+/month more than other providers’ offerings for the same.

  15. Avatar photo Darren says:

    Ofcome need to act here. Though price rise allowed providers are increasingly locking consumers into 18-24 month deals. Make 12 months the max.

    A lot of inflation is temp eg. Electricity cost and Telcos will see saving again in future..that 14% will be permanent.

  16. Avatar photo Rob says:

    That’s why, if taking out a 24 Month contract with BT, I always start in April, that way you only have to suffer the second price rise for a month before you can exit the contract.

Comments are closed

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