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Softer UK Broadband and Mobile Price Hikes Expected in 2024

Tuesday, Dec 26th, 2023 (12:01 am) - Score 4,520
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Surging inflation has meant that the past couple of years have been, to put it mildly, an uncomfortable experience for many broadband ISP and mobile users. In 2022 most consumers saw their prices rise by around 9% (here) and in 2023 that hit over 14% (here), but the predicted hikes for 2024 won’t be as bad.

Sadly, the majority of the UK’s biggest consumer telecommunications providers partly base their annual price rises off inflation figures – either the Consumer Price Index (CPI) or Retail Price Index (RPI) – as “published” in January or February each year, which tends to then be introduced to consumer bills between March and April. As a result of this, we can often predict how big the impact will be before it’s formally confirmed.

NOTE: Inflation is the general measure of how quickly prices for goods and services etc. are rising in an economy, which is often expressed as a percentage.

For example, BT (inc. EE and Plusnet) adopts a policy that says their average prices will rise by the level of CPI inflation, as published in January, plus an additional 3.9%. But a few others took a different approach and adopted the steeper RPI rate, as published in February, plus the usual 3.9% or something similar (i.e. the predictions we give below are less reliable for these providers as we’re further away from knowing the RPI level).

At present, the only major provider left to buck this trend is Sky Broadband, which still introduces price hikes, but it doesn’t link them directly to inflation. For example, in 2023 they hit many of their broadband and TV customers with an average annual price hike of 8.1% (here), which is still painful, but it’s not 14%+ painful.

Nevertheless, we miss the earlier years, when big providers typically introduced average annual increases of c. 4-6% and, once notified, gave existing customers the option of being able to exit their contracts penalty free. But more on that later.

What will happen in 2024?

The good news for 2024 is that inflation finally started to fall, albeit still a long way from the original 2% target. Back in August 2023 the Bank of England (BOE) predicted that inflation could fall to around 5% by the end of 2023 and would then keep on falling, reaching their 2% target by early 2025. The latest figures published in December 2023 put CPI at 3.9% (down from 10.7% a year ago) and RPI at 5.3% (down from 14%).

The suggestion is that next month’s CPI rate, which is most relevant to the bulk of price hikes mentioned below, will continue to fall, and our rough prediction has picked a middling value of it reaching around 3.4% for CPI and 4.7% for RPI. In short, most consumers should expect annual telecoms price rises of around 7.3% for CPI or 8.6% for RPI linked hikes in early 2024, which is notable lower than in 2023 and 2022, albeit still painful.

Take note that we think the February published RPI figure will probably come in somewhere just above 4%, so we’ve used that for Virgin Media and O2’s figure. But these really are just very rough predictions as inflation has recently been a bit unpredictable (e.g. the latest fall was much bigger than many expected).

NOTE: The % rises predicted below should be seen more as an average, with the increases for particular packages and services tending to vary.

Predicted 2024 Price Hikes

BT 3.4% CPI + 3.9% = 7.3%

EE 3.4% CPI + 3.9% = 7.3%

Plusnet 3.4% CPI + 3.9% = 7.3%

Vodafone 3.4% CPI + 3.9% = 7.3%

O2 / Virgin Media= 4% RPI + 3.9% = 7.9% (February RPI)

TalkTalk 3.4% CPI + 3.7% = 7.1%

Shell Energy 3.4% CPI + 3% = 6.4%

Three UK 3.4% CPI + 3.9% = 7.3%

In short, next year’s annual price increases will come in fairly close to what we typically saw before the CPI + X% model was adopted by providers several years ago. At the same time, it is important to point out that broadband and mobile providers are not immune to some of the same cost increases as being suffered by the rest of us.

Most providers are currently suffering under the burden of rising supplier and lease costs, as well as high energy prices, the rising consumer demand for data, network upgrades (FTTP etc.) and the adoption of new UK legislation and Ofcom regulation (automatic compensation, telecoms security etc.). Like it or not, such cost increases ultimately end up being passed on to customers.

Your Options

Naturally, if you’re already outside your contract term, then the best way to save money is to vote with your feet and switch ISP (where viable alternatives exist). But those who are happy with the service they receive, or who perhaps have no other viable options, may prefer to try haggling for a lower price when the hike hits (Retentions – Tips for Cutting Your Broadband Bill), although your mileage may vary – big ISPs are more responsive to this.

Alternatively, there are a lot of smaller ISPs out there that only very rarely increase their prices, if at all, and quite a few of those have kept their prices frozen. In particular, if you’ve recently been covered by a new alternative full fibre (FTTP) network, then the aggressive market competition that currently exists often ensures that their prices stay low to help drive adoption.

We should add that those who are on state benefits (Universal Credit etc.) may also have the option of taking a cheaper Social Tariff, which is another way to cut your costs – see our article on this: A Quick Guide to UK Social Tariffs – Getting Broadband for £15. But you won’t always be able to access the fastest speeds or most advanced routers / features with such a tariff.

Finally, there is some good news. The Advertising Standards Authority (ASA) has just introduced new guidelines that force telecoms providers to make mid-contract price hike policies both clearer and more transparent to consumers in their promotions (here). On top of that, and most critically of all, Ofcom have just this month moved to ban mid-contract hikes that are linked to either inflation, or percentage-based, price rise terms (here).

The problem is that Ofcom’s big change won’t be introduced in time to stop the next round of hikes in January 2024 (Feb in VMO2’s case), although individual providers may of course (on their own initiative) still opt to do a U-turn before they’re introduced. But failing that, they’ll most likely wait until the regulator publishes their post-consultation statement during the Spring of next year, which will start the clock on a 4-month wait until the changes are enforced (i.e. expected toward the end of 2024).

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Mark-Jackson
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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Comments
11 Responses
  1. Avatar photo Fibre Scriber says:

    Customers of the broadband and mobile firms should not get too excited about the proposed end of CPI/RPI on their bills, as the ISP’s will soon find a way to mitigate any potential loss in their earnings, and find another way to pull the wool over the consumers eyes!

    1. Avatar photo RightSaidFred says:

      At some point they’ll realise that all their customers want is a functional service at the advertised speeds for a known cost, with a little customer service if the above isn’t being met.

      At this point I don’t get how there are so many ISPs out there when the end product is just another flavour of water.

  2. Avatar photo ianh says:

    I’ve been on the same sim only ID mobile deal since black friday 2018 and can only presume it was pre-inflation linked contract annoyances, as i’ve never had an increase…..and my lord im sticking with it as long as possible!

    Bring back plain old contracts!

  3. Avatar photo Bg Dave says:

    Hopefully 2024 will be the year the great altnet consolidation finally happens and the industry will be in a position to give some cohesive competition to Openreach.

    Hope everyone’s had a great Christmas.

    1. Avatar photo Name says:

      And get VM/Nexfibre a good kick in the direction of ‘llu’/wholesale

  4. Avatar photo Matt says:

    Hopefully the last year of this before the new ofcom rules come later in 2024?

    1. Avatar photo Andrew G says:

      Not sure there’s any hope. Ofcom have been utterly ineffectual in protecting customer’s interests, and even under the new rules it will be entirely legal to double your price mid contract, so long as the way it’s described as something like “an increase of £30 a month in April of each year”, but not if it’s expressed as a % of the original price, or with reference to inflation. As with all badly thought through regulatory changes there will be significant unintended consequences, the one thing you can be certain of is that those unintended consequences won’t work in consumer’s favour. I’ll blame Julia Lopez MP – she’s the minister responsible for the telecomms sector, and given the pathetic proposals I think it’s clear she’s on the side of the telcos.

    2. Avatar photo Ben says:

      Sadly the new rules will only help new customers…

  5. Avatar photo Craig says:

    I have left both BT/ openreach and EE this year because of that reason and moved to companies that have a no increases during the contract period. It’s the +3.9% that really wound me up.

  6. Avatar photo Jason says:

    Is there a list of ISPs and MN(V)Os without price hikes?
    Thanks!

  7. Avatar photo james smith says:

    if these companies had an ounce of decency they would freeze their prices for the whole of 2024

Comments are closed

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