ISP BT and EE Introduce New UK Pricing Policy for Customers
Broadband, TV, phone and mobile provider BT (inc. EE) has today introduced their new “clear and simple” pricing policy, which sees them move away from % figures and CPI (inflation)-linked changes for their monthly plans in order to “provide certainty for our customers on exactly what their price change will be, and when“.
In case anybody has forgotten. Back in January 2024 BT became the first ISP to announce (here) that, in light of Ofcom’s recent move to BAN broadband ISPs and mobile network operators from doing mid-contract price hikes that are linked to confusing inflation and percentage-based changes (here), they would instead a new approach.
The regulator’s change was never designed to stop mid-contract hikes completely, but it did require providers to tell customers precisely what any future price increases would be when they sign up (“in pounds and pence“), which crucially rules out changes linked to unknown future inflation values or percentages.
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BT previously said they would introduce this approach from the “early summer”, but instead both they and EE have opted to introduce it today. The exception is sibling broadband ISP Plusnet, which for whatever reason “will follow later this summer.” At present, this will only apply to contracts for new and upgrading customers.
Marc Allera, CEO of BT’s Consumer Division, said:
“We want to act in line with Ofcom’s guidance to move from % figures and CPI-linked changes for our monthly plans and provide certainty for our customers on exactly what their price change will be, and when. So, starting today (10 April), we will introduce a new model for BT and EE customers’ price changes consistent with Ofcom’s approach that shows pounds and pence amounts in new and upgrading customers’ contracts. Plusnet will follow later this summer.
From 31 March 2025, for new and re-contracting mobile customers, this annual increase will be an extra £1.50 a month. It will be £1.50 a month for connected devices (including laptops, tablets and smart watches), £2 a month for TV customers, and £3 a month for broadband customers. Out-of-bundle services will be subject to an annual 5% increase.
There will be no plan increases for our customers in financially vulnerable circumstances on EE Basics or BT Home Essentials.
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It is also important to point out that our price rises have not risen in line with usage. Customers’ consumption of data, across the industry, has trebled across mobile and fixed networks in the past five years alone. All this while telco services continue to make up only a small and declining share of household outgoings, representing just 3.5% of average monthly basket spend.”
Just to be clear on the above, a customer taking both broadband and TV would see a combined increase of £5. Ofcom currently plans to confirm their aforementioned BAN sometime this spring and, allowing time for implementation, this means that it won’t be enforced until sometime in the second half of 2024. The reality here is that, given Ofcom’s proposed change, this outcome will soon become inevitable for all providers that do mid-contract increases (a lot of smaller players don’t).
The proposed increases may potentially still come in as being above the rate of forecast inflation (CPI) when they hit existing customers in 2025 (much depends upon what inflation will be doing at that point). In theory this suggests that customers affected by the future hike may, 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.
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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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Good change for some customers, awful decision for others.
I was with Virgin Mobile when they were using EE on a 2GB for £5 12 month contract plan since August 2018. I have not ever switched plans.
5 years later, in April 2024, my bill has risen up by less than £2.50 and EE plans to increase prices by £1.50 a year (which is absurd for special Plusnet plans which will go up by over 25% in the first year thanks to the changes). You also have to remember VMO2 does higher price rises than the rest meaning that theoretically, my plan may have just risen by about £1.50 in the 5 years.
It’s currently gone up to £7.38 for unlimited data on O2 if anyone’s interested, although the price change is yet to apply in the app!
Does this mean current customers of EE get to leave without paying leaving fees because of this change?
No as the article clearly states this change of contract term is only for NEW customers and RECONTRACTING customers only.
So no change for current customers so no leaving before the end of your current contract without paying early exit fees.
Having been with EE since the glory days of Orange, who were IMHO the best mobile phone company of that era, I ditched them in 2021 when I got an iPhone 13. They wanted £60/month (24 months) for the handset with a similar plan to what I was on and I had been with them for near on 18 years.
I got them down to £55 but that would easily increase to £60 the following year with the RPI / CPI increase. I bought it direct from apple for £32 a month over 24 months and put a £6 GiffGaff sim card in and ported my account over to GiffGaff. I have never looked back.
Upon being alerted to a PAC code request, they phoned and asked why I was leaving. I was told that I had spoken to the wrong department and retentions should have been made aware but his colleague had not vigorously tried to retain my custom after being with them for nearly two decades. I also said I hated the RPI increase and had already made my mind up.
PAYG bundles are the future and I will never tie back into a contract again. They’re a mugs game
pay as you go unlimited is more expensive
and esim support is not available on some networks either for paygo.
sim only contract is the future not paygo as i am a heavy data user 100Gb average usage on three and EE mobile for me.
Hi Bill
Yes in your case it’s worth it but I work from home and use less than 5GB a month in data
You get what you pay for. Giffgaff isn’t even on par with O2 itself, let alone O2 vs EE.
PAYG flexibility works both ways. Instead of a once a year price rise, they can change any of the terms and conditions at any time.
Guaranteeing someone a £3 rise on their broadband just shows how poor ofcom are managing the market.
£3 rise can be quiet different in percentage terms if on a £25 cheap deal vs some fancy gigabit product at £50.
As a minimum the increase should be at month 13 of your 24 month contract. Ideally it should be no increase at all though (the 24 month term should be for the benefit of both the customer and the provider).
So they could decide the price will go up by 15% a year but if inflation falls and is only 5%, the networks still pocket the higher rate?
Yes I know it could work the other way where they could set the price rise under what ends up being the inflation rate but I highly doubt that would happen.
This “pricing policy” is just a punishment to milk the suckers who don’t switch provider
It would be, but it applies while customers are locked in a contract and unable to switch provider…
Sure which is why either the contract honors a set price or it is voided and you should be able to exit
I’m on an EE PAYG monthly subscription pack. The app offers me 30% off if I go to a long term contract. If I follow that option it becomes 20%. The long term deals are horrendously expensive and limited. I’m also offered discount on a second SIM but it’s as clear as mud what the pricing is. I can feel the simplicity of 1pmobile tugging.
Yes seeing the increased price before agreeing is 100% better but it will have the unfortunate consequence that other provider will say oh EE is £1.50 extra a
month we can either go lower to attract customers or the same which just means competition fizzles out.
Sky will be interesting because usually they just add it every year regardless but at least they let you leave.
I wish Ofcom just banned increases, the price at sale is for the full contract and it’s up to the provider to factor in whatever increases.
I wish ofcom ban mid contract price hikes altogether.
Recently negotiated bundle discount again with Virgin. It was £6 more than before, so around 10% increase over 18 months.
3 weeks later hit with around £7 increase. At no point did their agent mention the inflation +% every April.
It was mentioned in the smaller print in the contract and all over the T&Cs, often in capitals, which also states it applies even if they do not tell you about it, and that the annual increase does not constitute a reason to leave a contract early (without pay early termination charges).
This article suggests that a mid contract price hike IS a reason for terminating a contract, yet Virgin clearly do not think it is.
If they don’t the regulator will end up forcing them to. This way they can frame as they’re the good guys.
Something about increasing prices mid-contract seems dishonest, I wish Ofcom would grow a pair and ban this practice.
The whole idea of changing a material part of a contract, the price, during the contract has never sat well with me. Stop competing on price and build it into the length of the contract. It has the side effect of making comparisons far easier for TCO as well.
Ofcom really need to ban the practice outright, it is *not* consumer friendly.
Thankfully there are providers that do this, Spitfire, Zen, A&A etc.
I note that Allera comments that data usage has increased.
Can anyone in the know confirm if Wholesale pricing for data has increased/decreased/remained the same over the last few years?
No need for anyone in the know: https://www.btwholesale.com/assets/documents/help-and-support/pricing/service-provider-price-list/section-44/part-7/wbc-price-list-entry-280224.xlsx
So, for someone on broadband that’s another £36 a year + TV at another £24 a year and that’s a good thing? Bit late for April 1st isn’t it?
I saw no problem with %rises. Inflation is always in %, which makes it easy to compare with price increases. The fact that the minimum plus whatever needed in the middleof contracts needed to stop
If you mean the additional 3.9% needs to stop, I couldn’t agree with you more.
Brilliant this. Inflation was high this year and my BT broadband increase ,+ 3.9,% , total 7.9% increase was ,£2.36. Ofcom BAN this practice and replace it with a guarantee £3 rise. Cheers for that Ofcom
So my EE bill on the ridiculous CPI + 3.9% terms (because CPI + 3.9% is itself inflationary, which compounds the problem) just went up 78p.
Under the new terms, it would be £1.50. Well done ofcom.
BT are full of it, they make things up, blag it, incorrect information, never listen, charge, charge, charge, that is all they are concerned about, tech is abysmal, they are the worst of a bad bunch, take, take, take, if BT can mess it up, they will, they are absolutely Unbelievable, I have FTTP, had bother over sending equipment back, it’s sent back, but wanting charge me, and back in the day, they were sending routers out like it was going out of fashion, that’s why they brought a curved one in, it went in the bin easier, you just have to hope you don’t have trouble, they are all bad.
If standard prices also changed, they might get a bit more sypmathy, but I’ll bet the prices offered by most of these suppiers is pretty much the same today as it was last month. Meanwhile contracted customers are paying more.
It’s a scan and should be illegal.
Marketeers.. Are setting their sights higher… having ruined companies with their idiotic market segregation policies which are now disappearing at speed up their own jacksies, they are now aiming to ruin countries economies.
Reckless barstards.. Yet more “Thugs in suits”
Wonder how their inflation pricing policy sits with the Treasury.. and their inflation target bearing in mind how heavily HMG comes down on wage claims.
Back to the late 1960s and a Prices and Incomes policy that would make actions like this illegal.
Do you mean market segmentation policies?
What would have happened 60 years ago doesn’t really matter any more than 120 years ago or 180 years ago.
The treasury could’ve intervened had it wished to. Inflation was largely high due to external factors: the pricing policies of the telecoms companies weren’t an issue before the Russian invasion of Ukraine and the post-pandemic period and won’t be one after this has calmed.
Marketeers don’t decide pricing policy just FYI. They are also a legitimate part of a business and don’t operate in a vacuum, senior leadership get input into their work.
Just ban mid contract price rises.
If you can’t work out the costs of running a network for a fixed period of 24 months, then you shouldn’t be running one…
Inflation is not an issue and never will be because your whole subscriber base doesn’t take out a contract that starts and ends on the same day. You lose on some and gain on others, much like retention deals.
Why are they still making it complicated and why are Ofcom going to allow this instead? Their 500Mb package is advertised for 24 months with £0 set up costs and £34.99 “With a £3 increase on 31st March”.
Let me fix this for you EE: 12 months at £34.99 and 12 months at £37.99 on a 24 month contract. Easy. A bit like giving the first 6 months half price and then the remainder at the normal price… which is what a £3 increase over 12 months works out as in terms of value.
Hopefully one of the other big ISPs market their products like the way I have above and not as a price rise. I can’t see the EE wording lasting personally it’s ridiculous. I don’t see why they need to call it a price rise rather than having a promotional offer and then the remaining amount, unless of course they rely on people outside of contract to have an extra £3 added to their accounts each year indefinitely… I wonder if internally they have a cap to stop customers paying this extra £3 each year for 10 years for example?
> Their 500Mb package is advertised for 24 months with £0 set up costs and £34.99 “With a £3 increase on 31st March”.
Thanks for highlighting this advert. In my view, it does not comply with the spirit or the letter of the 2023 ASA/CAP/BCAP guidance.
https://www.asa.org.uk/resource/guidance-on-the-presentation-of-mid-contract-price-increases-in-telecoms-contracts-new.html
> Let me fix this for you EE: 12 months at £34.99 and 12 months at £37.99 on a 24 month contract.
I believe they should advertise it as: £34.99 until 31 March 2025 then £37.99 until 31 March 2026 then £40.99, on a 24 month contract.
Obviously they would prefer not to mention £40.99 in their advert. I will try to make sure they must.
I will refer the ad to the ASA on the basis that it is misleading. Please do the same, the more complaints the better.
There is no point complaining to the ASA about the increase itself, they don’t have the power to ban mid-contract increases. But they do have the power to ban misleading adverts.
I can’t imagine that OFCOM will be able to do much to stop this. With a ‘fixed’ increase within the contract, technically this isn’t a price hike, not is it a breech of the contract.
It very clearly sets out at the beginning that you’ll pay £29.99 until April 2025, then £33.99 from April 2025 to April 2026 when you’ll pay £36.99 as a broadband customer.
As long as it’s clearly set out like that when the contract is agreed, there’s no foul play. Whether it’s right or not we can discuss, but the contract is very clear and could be understood by anybody, unlike the CPI based contracts, as CPI is a variable rate.
Overall, anything that brings clarity has got to be a good thing.
This misses the point entirely. Normally if you have a contract it is on fixed terms, so why don’t the ISPs price the cost of a 24 month contract up front with no increase, RPI based or otherwise.
Ofcom’s changes also ignore the fact that nearly all the major ISPs do this so being notified of a mid-contract price rise in £s is hardly in the customer’s interest. If each ISP does the same you really don’t have a choice of alternative provider.
With these contracts the terms ARE fixed! Terms don’t apply just to pricing. When entering into the contract one of the terms is that the price will increase by £3 every year in April. The previous contracts with CPI+3.9% were also technically fixed term contracts. However, the argument OFCOM had was that people couldn’t clearly be given information about how much they’d pay as an increase, as CPI is a variable measure.
This new contract gives absolute clarity about the increase, therefore no terms of the contract are breeched. As I said before, I’m not saying this is right, but it is being more open about what people will pay.
If people are that bothered about it, they will still have the choice to use an ISP who doesn’t increase prices as a contractual term, although that will likely mean paying more each month to start with.
How about more ISPs offer no mid-contract price increases? That would be nice. Truss’s horrendous mini budget resulted in a ridiculous £15 increase to my bill. I don’t agree with being penalized for something beyond the control of the general public.
I don’t agree with any mid-contract price rises, if you agree to a price for the next 12/18/24 months and it should stay that price until the end of that period.
I do however understand that inflation affects the providers just as it does us and their costs can and will go up over the contract period so I can accept, that they need to pass these costs on. I detest the current model of CPI+3.9% though, I really don’t know how they can justify the extra 3.9% other than to fatten up their own coffers. If anything this additional increase will be fuelling higher inflation!
Rather than forcing providers to use a £/p figure, Ofcom should have enforced a fixed % increase which could be easily calculated at the point of sale and communicated clearly before purchase. This approach would be fair to people at all levels of contract across all service types. e.e if they were to use a 5% increase those on a £5 SIMO would see a 25p increase whilst those on a £60 mobile handset contract would see a £3 increase.
It just doesn’t seem fair that the £5 SIMO contract and £60 device contract both receive the same increase. Ofcom have made a real mess of this one!