Survey Reveals the Extra Cost of Being Loyal to Broadband and Mobile Providers

A new Opinium survey of 2,004 UK adults, which was commissioned by Uswitch.com and conducted between 16th April 2024 to 22nd April 2024, has claimed that broadband ISP customers who haven’t switched for 7-8 years are the worst off, paying on average £22.10 extra a month. The situation is almost as bad for mobile users’ too.

Most of the major broadband and mobile providers tend to entice new customers with big first-term discounts, which promptly evaporate at the end of that term as prices return to their standard level (in some cases, this can double your monthly payments). On top of that, it’s also fairly common for such providers to also introduce mid-contract price hikes that can hit both new and existing customers alike.

In January 2024, Uswitch calculated prices for broadband customers would rise by £27.19 per year on average, and mobile customers would see an average increase of £24.23 per year. This was based on the majority of broadband and mobile providers calculating their annual price rises based on December 2023’s 4% inflation rate plus an additional 3.9%.

The other problem with being loyal is that you can end up being stuck on a legacy contract / package that could ultimately cost a lot more over the longer term, unless you proactively elect to upgrade, change or re-negotiate your existing package (Retentions – Tips for Cutting Your Broadband Bill). The new survey helps to underline the impact of this.

The Cost of Loyalty

The survey found that customers have seen huge variations in pounds-and-pence price rises, depending on their original package and how long they’ve stayed with their provider – with the impact of percentage increases compounding every year.

For example, broadband customers who haven’t switched for 7-8 years are the worst off, paying on average £22.10 extra a month (45% more than the national average increase of £15.20). By comparison, mobile customers who haven’t switched for 8-9 years have been hit by an average £13.20 monthly bill rise (67% more than the national average of £7.90).

On the flip side, those who switched their mobile provider less than one year ago were the best off, with their increases averaging out at £6.70, or 15% lower than the national average of £7.90. Similarly, those who switched their broadband provider less than one year ago saw their price increase average out at £11.75 – 23% lower than the national average of £15.20.

Average amount broadband bills have increased by since March 2024

Average amount mobile bills have increased by since March 2024

As if to make matters worse, some 23% of respondents were unsure about how much their bills have gone up, while 44% still don’t know when their contract ends (this is important if you’re looking to leave penalty-free). The most common reason for this is because they rely on reminders from providers to pay bills or renew contracts (28%), although 18% confess they aren’t good at keeping track of dates.

Clearly, the regulator’s End-of-Contract Notifications (ECN) system, which requires all telecoms providers to issue such notifications to existing subscribers at the end of their term (sent by text, email or letter), may not be working for everybody. The ECN system was intended to help tackle the so-called “loyalty penalty” by keeping customers informed about the best deals and thus encouraging switching.

In addition, Ofcom recently moved 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), although this won’t be enforced until around the end of this year. On top of that, this change is more about improving the transparency of pricing – it doesn’t completely ban mid-contract hikes.

In theory, the regulator’s new One Touch Switch (OTS) system, which aims to make it both quicker and easier for consumers to switch broadband providers on different networks, could help to make migrating between ISPs a lot easier. But after several long delays, that isn’t due to be implemented until 12th September 2024 (here) – assuming it meets that date.