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Broadband ISP BT Confirm New UK Pricing Policy for 2024 – Drops Inflationary Hikes UPDATE

Tuesday, Jan 16th, 2024 (12:56 pm) - Score 9,080
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Following Ofcom’s recent proposal to BAN providers from doing mid-contract price hikes that are linked to inflation and percentage changes (here), telecoms giant BT has today become the first major operator to confirm that they will instead be adopting “clear and simple” price changes from “early summer” (not in time to stop the next hike, though).

In recent years most of the major broadband, mobile and phone providers (except Sky Broadband) have adopted a policy into their terms that enabled them to increase their prices each year – for both new and existing customers – by c.3-4% plus the rate of annual inflation (CPI or RPI) – as published in a particular month (usually January or February). For example, BT’s price increase last year was 14.4% (i.e. 10.5% CPI + 3.9% from BT).

NOTE: Any changes to pricing policy by BT will also filter down to EE and Plusnet.

However, many consumers found the policy confusing (e.g. they’re not familiar with how ‘inflation‘ actually works or the meaning of terms like CPI or RPI) and others were more generally angered by the size of mid-contract price hikes, which became even more of an issue with the surging level of inflation over the past two years. In the past, it was also often possible to exit your contract penalty free when a mid-contract hike hit, but the technical transparency of the inflation model also made this more difficult.

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At the end of last year Ofcom finally acknowledged all of this by proposing to effectively “ban this practice“. The move won’t stop mid-contract hikes completely, but it will require providers to tell customers precisely what any such hikes will be when they sign up (in pounds and pence), which crucially rules out changes linked to unknown future inflation values or percentages.

Now BT has become the first provider to confirm that they will adopt the new approach (here), which comes before the regulator has issued their final decision on the matter. But it’s not all good news because their next hike, which is due to be confirmed next week, will continue to follow the existing model.

Marc Allera, CEO of BT Group’s Consumer Division, said:

“Ofcom will finalise its decision on the proposed requirements in the coming months, with new pricing models in place no later than four months after that.

So, starting in early summer, we will introduce a pricing model consistent with Ofcom’s approach, moving away from % figures and CPI, and offering instead, a clear and simple view of any changes in “pounds and pence”. For new and re-contracting mobile customers we expect this increase to be from £1.50 (for Sim Only and Airtime, for example), and for broadband customers £3.

Until then, we continue to follow the existing rules, with our annual March 31st price increase of CPI + 3.9% going ahead as per normal. With the CPI inflation rate being announced tomorrow, most of our customers can expect an increase of a few pounds per month, about the price of a takeaway coffee each month.

Our new pricing model isn’t for all our customers, however. There will be no changes for our customers in financially vulnerable circumstances on EE Basics or BT Home Essentials.”

The reality here is that, given Ofcom’s proposed change, this outcome is not a surprise and will become inevitable for all of the providers that have adopted such a model. BT is merely the first to confirm it. Ofcom currently plans to confirm their ban sometime in the spring and, allowing time for implementation, this means that it won’t be enforced until sometime in the second half of 2024.

At this point we still don’t know the finer detail (T&Cs) of BT’s proposed policy change, such as precisely when they will implement the increase to bills for existing customers (we assume the policy will initially impact new customers). This is because the last thing that any of BT’s existing customers want is to be hit by two price hikes in the space of a year, although this is something we’ve seen happen before.

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The proposed broadband hike of £3 per month, if we assume it hits in early 2025 rather than 2024 (like the current timing), is also likely to be above the rate of forecast inflation (CPI). In theory this suggests that customers affected by the future hike will, under Ofcom’s existing rules, be able to exit their contract penalty free again and switch away (or use it as a tool to renegotiate a lower price).

As we’ve said before, the move to ban the current model is less about cutting customers’ bills and more about making future package pricing clearer and simpler to understand.

UPDATE 4:19pm

We have sought some clarification from BT regarding the timing of their policy change and its impacts. Firstly, the provider has confirmed that the change will impact both new and any re-contracting customers (i.e. if you don’t re-contract, you may stay on the existing terms / policy).

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Secondly, the new policy still reflects an annual price rise, which will “take place 31st March each year beginning 2025” (i.e. so there’s no risk of two price hikes hitting during 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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35 Responses
  1. Avatar photo anonymous says:

    In my opinion, this means Ofcom likely to act so BT doing damage limitation for next year when they anticipate Ofcom’s changes may come in whilst having a grab before Ofcom’s decision completed/announced.

  2. Avatar photo Kris says:

    I’d also like to see providers forced to stop increases on a set date each year. If I join in January I don’t expect an inflationary rise or otherwise within the first few months!

    1. Avatar photo Iain says:

      Precisely. The whole thing, include the fixed annual date, makes a mockery of fair and reasonable contracts.

      Still, existing advertising rules on introductory offers “should” mean they have to say something like:

      > £30 a month for 2 months (until 31 March); then £31.50 a month for 12 months, increasing by £1.50 every year

      ASA rules were super lax because CPI/RPI numbers are unknown in advance (which was nonsense but that was their reasoning).

    2. Avatar photo RevK's Fanboy says:

      I’ve been on Andrews & Arnold for 14 years. Only ever seen the price drop by £5 and had a increase from 200GB to 500GB to 1TB and now to 10TB. No one gets a special deal we all pay the same.. THAT’S how it should be

    3. Avatar photo Paulo Gomes says:

      In my believe, it shouldn t change at all for the full contract, contract for how long it should be, should already have that view in mind for the full length.

    4. Avatar photo Ad47uk says:

      @RevK’s Fanboy, Andrews and Arnold are expensive anyway and are for a different consumer base, even so, maybe they think they had to drop a bit to survive. £25 plus vat for 1TB of data a month is a bit pricy and in this day and is not something most people would pay for.

      For any other provider, increasing the price in a contract is so wrong and with people being forced to 24 month contract is it even more wrong and yet Ofcom the useless lot did nothing about it. They are no better than the other regulators, useless the lot of them, no idea why they are around.

    5. Avatar photo RevK's Fanboy says:

      @Paulo

      That’s what I believe AAISP do – but other people here say that is wrong. SO I guess they cant win?

      @ad

      “£25 plus vat for 1TB of data a month is a bit pricy and in this day and is not something most people would pay for.”

      It’s INC VAT and£25 for ADSL with 1TB of usage, something that on ADSL you would struggle to use anyway is actually a bargain. The main cost is for the tech and the payments towards BT/TT in order to pay for it. When you break it down on the higher package are you saying 1TB for £1 is a rip off!? (10TB for £10 is cheaper than most DataCentres charge for Bandwidth)

      That said – you spent ages slagging off Zoooom and then signed up with them anyway – so do you even know what you are talking about?

    6. Avatar photo Ad47uk says:

      @RevK’s Fanboy.

      Oh well, if it includes V.A.T then it is good value for money. 🙂
      1TB is not a lot these days and if you have a few people in the house, even easier to reach 1TB. As you said, reaching it on ADSL may not be so easy, but A&A have the same limit on their FTTP and FTTC services.

      It matters not how you break it down, maybe it makes you feel better that you are paying for the tech, but it is still £25 for a service that has a limit. Like with other providers, saying that you only pay a couple of quid per month for broadband as the rest goes to line rental. Plusnet did that. It makes no difference, I was still paying £24.99 for broadband access.

      You are right there were times I had a moan about Zzoomm, the mess they made of the pavements for a start and other things and yes I took ages to decide to move to Zzoomm, mainly because I was not interested in FTTP and still not bothered. Also, worried about then being taken over and also reviews.

      But at the end of the day it was either stay paying higher prices for a lower end service and being stuck in a 24-month contract, or going to a higher end service, still with plusnet, but still paying more and again a 24-month contract, or just going for it and go to Zzoomm who offered a service for 12 months at a decent price. I will still slag them off and have done if they don’t provide the service I am paying for.

      I have been using the internet for years, from the dial-up days and even BBS services before that, I have been through the times of data limits, including Metronet where you pay an amount for a certain amount of data and then pay extra for additional data. In the day it worked fine, that was on ADSL, then Plusnet took them over, and I did not want to stay with plusnet, so went with AOL. We all make mistakes 🙂

      But it is different times now, we need access to data more so than ever and having limits on home broadband is not the best idea.
      I have made mistakes, lots of them, I have been wrong, and I was wrong about Zzoomm, sure it has not been plain sailing since I signed up, but for the last couple of months, it has been fine, so hopefully it will keep fine, and yes I am still worried that it may full apart, and it may be taken over. But as I was told a few days ago, sometimes you have to take a chance.

      If A&A works for you, then great, I only have 4GB of data on my phone and that works for me.
      It is good that you can support a smaller provider, that is one of the reason I went with Metronet all those years ago and ADSL24 was another, also why I went for a Wireless network, supplied by a local company, and it was slightly faster than ADSL. Sadly, it did not work out.

      But I do know what I am on about, just because I sometimes make wrong choices, or I complain about something and then change my mind, most people do that.

      As for the future, who knows?

  3. Avatar photo Mml says:

    So if you assume the starting price of a broadband subscription at £27.99 and £3 yearly increase, BT have, in effect, revealed that the CPI figure they were counting on was 7.2% 🙂

    1. Avatar photo DaveZ says:

      Article says £3 a month…i.e. £36 a year, >50% I hope it is a typo and £3 a year otherwise it’s a joke.

  4. Avatar photo Patrick says:

    So having ridden on the coattails of high general inflation for the past 2 years, plus more, they now
    move to only stating cash increases , which will still likely be higher in percentage terms than any projected and actual inflation rates, and still mid contract.

    1. Avatar photo Iain says:

      And now that they’ve publicly quantified the inflation figure they want/assume*

      they should be able to calculate a fixed price for the entire 24 month contract duration.
      But that would be too transparent.

      * as they were already doing internally

  5. Avatar photo A Stevens says:

    I’ve been with A&A for nearly 3 years now – no price increases at all, which is astonishing. If they can do it, why can’t the big boys?

    1. Avatar photo Ed says:

      Because they’ve still got loads of private equity cash to burn through first?

    2. Mark-Jackson Mark Jackson says:

      For one thing, they don’t offer unlimited data usage, but they generally also cost a bit more as standard and don’t play the first year discounts game. Equally, they’re not subject to all of the same regulatory rules as the biggest players, as they haven’t signed up to them (e.g. auto compensation, speed code). So there can be a lot of differences that a simplified surface comparison won’t factor. Smaller providers in general tend to have greater stability of price for similar reasons.

    3. Avatar photo RevK's Fanboy says:

      Whatever they are doing they will keep on doing it. I am glad they are not unlimited. That said I’ve so much roll over I have about 72TB in the kitty (and about to rollover 3.7TB tomorrow so it’s as unlimited as it’s ever going to get.

    4. Avatar photo RevK's Fanboy says:

      172TB*

    5. Avatar photo Ad47uk says:

      A&A’s system is so out of date, we from limited data years ago, but if it suits you then fine.

    6. Avatar photo Bob says:

      If it has not gone up in 3 tears that trend’s to indicate it was high priced to start with. Probably for two of those years inflation was quite low but not fir the third

    7. Avatar photo Scott says:

      Because A&A packages are priced considerably higher than mainstream providers? A gigabit FTTP connection from A&A is £75/month with a 1 TB quota or £85/month with a 10 TB quota plus a £100 installation charge, same connection from BT is £43 per month with nothing upfront and limit. BT could increase the price 20% per year every year for 3 years and still be cheaper than A&A

  6. Avatar photo Chris says:

    I was recently informed by BT that My Sports Pass(Discovery+ premium,includes TNT Sports)is going up by £1 per month from next month, which I don’t think is bad, expected the rise to be much higher with high inflation, so it was a nice surprise to find out it’s only rising by a quid. I wonder if that’s the new pricing strategy applied?

  7. Avatar photo Mr Alan Cooper says:

    This percentage plus inflation model is daylight robbery and exploited to the ultimate by virgin media, who also don’t allow you a get out of contact clause for these increases. In addition if you negotiate a deal to match new customer prices they apply it as a discount down,sounds innocent? Nope because they can then apply the increase on the FULL amount making the increases excessive.
    Next thing can they stop those huge differential pricing policies between new and existing customers? The differences now are ridiculous so I’ve cancelled Virgin and I’m going to a smaller outfit without all this absurd ducking and diving that even del boy would find embarrassing

    1. Avatar photo RightSaidFred says:

      Vodafone apply the rise to full monthly payment plan amount, then have a fixed discount applied. Thus a CPI+3.9% becomes more than CPI+3.9% of your actual payment.

      Creative/Misleading advertising for those not trained to look.

  8. Avatar photo DD says:

    If BT wants to adopt this stance then so be it, however I note recently TalkTalk have also dropped the CPI increase and set a fixed amount for 18 months after an introductory period, so the market should hopefully persuade BT to simply provide an intro monthly offer and a fixed remaining monthly cost.

  9. Avatar photo Steve says:

    It’s patronising to suggest the price increase can be linked to a cup of coffee each month, suggesting a throw away purchase we shouldn’t give a second thought to. I don’t know any other industry which does this. I doubt anyone would risk the suggestion that the increase would cost less than it does to heat your house for a couple of hours in the winter, or about the same price of a box of cereal to feed a child breakfast for a week?!

    1. Avatar photo SicOf says:

      Amazing that its taking OfCom so long to react, let alone fail to proactive – maybe we couls save by getting rid of of it.

      Perhaps the extortion of the increses should be tempered by linking them to Minimum Guaranteed Speeds – If the speeds don’t increase in line with the £charges %s then the price should be reduced by the MGS reduction in value, particulalrly for those where the MGS are deacresing, my postcodes mgs has fallen by 30% this year and with nothing other than OpenRech infrastructure so ‘switching’ is totally pointless.

      I can’t imagine any other consumer purchases getting away with this: Rent a 60″ Tv and next year only being able to use 42″ of it, or a car that does 100mph this year but next year if it will only do 70mph the garage saying pahh thats just ce la vie }:-#!
      None of this seems to have any recognition or consumer benificial action by OfCom, so its failing in its remit?

  10. Avatar photo MattBoothDev says:

    The whole problem is the very mid-contact increases to start with, not that they’re an unknown amount (which is a problem in itself anyway).

    Contracts are 12, 18 or 24 month, usually. If a provider cannot offer a contract that the business can survive on for any of those very small amounts of time then they don’t deserve to be in business.

    Ban these contracts entirely and return to the time when your agreed to pay £X for Y and that was it.

  11. Avatar photo insertfloppydiskhere says:

    From £1.50 seems absurdly expensive for mobile plans considering EE is currently offering plans for as little as £6 if you were with Plusnet Mobile. I like the concept, but I don’t actually see this being turned out well. For reference, my £6.79/mo unlimited data O2 plan was raised by £1 last year, and that’s with a 17% price rise. These percentages seem even worse.

  12. Avatar photo Bob says:

    There is a good case for locking people into an 18 month in contract to start with buy there is little justification for doing so on renewals

    1. Avatar photo Buggerlugz says:

      But there isn’t for telling them their monthly bill will cost 150% more at the end of the 18 months, is there?

  13. Avatar photo S7eve says:

    I think everyone moaning should
    A. Turn off the internet for a week then see how you cope…
    B. Pay the staff salary increases and associated increase in costs for said ISP’s
    C. Stop moaning over what is roughly less that 10p a day in most cases … But those that do likely fell to the netflix…Disney plus and soon to be Amazon prime increases and moaned but still paid it..

    Where were you when the gas and leccy went up, I know, likely moaning cos your water went up a fiver or something

    1. Avatar photo Ad47uk says:

      It would be difficult for most households to do with the net, companies, government, corporations and anything else you can think of have made that difficult. I do know a couple that don;lt have any access to the internet whatsoever, but it is getting more difficult for them as they are keep getting told to go online to do this and that, even checking their bank account is getting difficult as more bank branches close and even cash machines are being removed.

      I know that costs go up, energy and staff and other things and I don’t it is so much prices increasing for broadband, most of us accept that, it is when they increase the prices in the middle of the contract, and you have no choice but to accept it and since most other providers do the same thing, there is little choice.
      If I was changing providers or starting from scratch and did not have Zzoomm here, then I would go for now broadband or try Onestream. Both 12 month contracts.

      When Netflix increased their prices, I dropped it, even so there are cheaper ways to get Netflix if you really want it. Once in a contract with broadband, it is not possible to drop to a cheaper service, even if there is one available.

      Electric and gas, again, only 12 month contracts, and you can change after that, but the problem is, they are more or less all the same. Also, if you really want to save money, you can reduce your usage to a certain degree. Boil less water in the kettle, get a cheap air fryer instead of using the big oven and yes you can pick air fryers up for around £25.

      As for the price per day, this is the same sort of argument BBC fans come up with for the TV licence, only 46p a day, or will be when the price increases.

  14. Avatar photo Buggerlugz says:

    There is a difference between “confusing” and “daylight robbery and corporate greed”. If only OFCOM did they’re job protecting consumers and actually knew that eh!

  15. Avatar photo Chris Simmons says:

    I find it perplexing that for years Utility Warehouse has not done any mid price contract rises but they never get any coverage for this?

  16. Avatar photo Ken1wales says:

    Just had a quote from a and 35 a month 12 month contract up to 1tb usage 47 to 67 mbs my tt contract ends March 13th so A and A deal sounds promising.
    K

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