2025 Broadband Price Hikes and the Impact of Ofcom’s New UK Policy
On 17th January 2025 Ofcom will begin enforcing a ban on mid-contract price hikes that are linked to inflation and percentage changes (here), but this doesn’t extend to many existing broadband contracts. Consumers on bigger ISPs may thus find themselves being divided between two different pricing policies, and one is going to hurt your wallet more than the other.
Just to recap. Over the past few years most of the major ISPs have adopted a policy that sees them increasing the price their customers pay, each year, by around 4% plus the rate of annual inflation (CPI or RPI) – as published in a particular month (usually January or February) and then introduced to bills in March or April. In 2022 this resulted in average annual price hikes of around 9% (here), before rising to 14% in 2023 (here) and falling back to 7-8% in early 2024 (here).
However, many consumers found the policy confusing (e.g. a lot of people are not familiar with how “inflation” actually works or the meaning of terms like CPI or RPI), which resulted in Ofcom deciding to ban the practice. But this was more about forcing broadband, phone, pay TV and mobile providers to be more transparent, rather than completely stopping mid-contract price hikes.
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Instead, the regulator told providers that, wherever they apply in-contract price rises, they must now “set these out clearly and up-front, in pounds and pence, when a customer signs up“.
Old vs New Approach to Mid-Contract Price Rises (Ofcom)
Since then the industry has partly responded in much the same way as it always does, by waiting to see what approach BT took (here) and then copying it. BT’s response was to introduce a flat £3 per year increase on broadband and a £1.50 increase on mobile. Such a policy is clearer, but it doesn’t scale well (i.e. those on lower priced entry-level services will be hit harder) and is thus unlikely to damped calls for an outright ban on mid-contract hikes.
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The other caveat in all this is that the change usually only impacts re-contracting and new customers who join after the new pricing policy has been introduced (although some O2 are pushing it on to existing customers too – here). Put another way, existing customers will often still be held to the old inflationary-linked policies, until they upgrade/re-contract or switch provider. But this begs the question – given the recent falls in inflation, which approach will hit your pocket the most? Let’s take a look.
Comparing the Impact
In order to run this quick and admittedly over-simplified comparison between the old and new pricing policies, ISPreview has opted to use an example monthly price of £30. The examples we’re using below will mostly reflect major ISPs (and some random picks) that have, at the time of writing, clearly set out what their approach to mid-contract price rises will be post-17th January 2025. Some other providers may not announce this until that date.
In addition, we’re going to take the latest inflation figures, as published in November 2024, to help us get as close as possible to how we expect the old pricing policy (if it were to be continued into 2025) would compare with the new ones if it were applied in 2025. The results for our example broadband package are as follows. Remember, most of these annual-price hike policies are usually applied to bills around March or April.
Impact of Old (2024) vs New (2025) Price Hike Policies
(Broadband Packages)
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BT
Previous Policy: CPI of 2.3% + 3.9% = 6.2%
New Policy: £3 per month extra
Result: A package costing £30 per month would, from introduction, now cost £33 per month (new policy) vs £31.86 (old policy).
Previous Policy: CPI of 2.3% + 3.9% = 6.2%
New Policy: £3 per month extra
Result: A package costing £30 per month would, from introduction, now cost £33 per month (new policy) vs £31.86 (old policy). This is identical to BT.
Previous Policy: CPI of 2.3% + 3.7% = 6%
New Policy: £3 per month extra
Result: A package costing £30 per month would, from introduction, now cost £33 per month (new policy) vs £31.80 (old policy).
Previous Policy: RPI of 3.4% + 3.9% = 7.3%
New Policy: £3.50 per month extra
Result: A package costing £30 per month would, from introduction, now cost £33.50 per month (new policy) vs £32.19 (old policy).
Previous Policy: Sky doesn’t have a set policy and increased prices by an average of 6.7% in 2024, which was not directly CPI/RPI linked.
New Policy: We don’t currently know how they plan to handle future changes for either existing or new customers.
Previous Policy: CPI of 2.3% + 2.9% = 5.2%
New Policy: £2 per month extra
Result: A package costing £30 per month would, from introduction, now cost £32 per month (new policy) vs £31.56 (old policy).
Broadly speaking, the old policy, if it were to be maintained into 2025 (usually impacting existing customers), would result in an annual increase in rental prices of between 5.2% to 7.3% (£1.56 to £2.19) extra per month on a package costing £30 per month. By comparison the new policy, on the same £30 package, results in an annual increase of between £2 to £3.50 extra per month (between 6.25% to 10.45% extra).
Clearly, most broadband consumers (i.e. those using the biggest ISPs) are going to pay more this year under the new, and admittedly clearer, pricing policy than the old one. In addition, those on the cheapest packages will suffer an even more disproportionate hit. But in fairness, some providers, like CommunityFibre, have chosen a smaller c.£2 increase that sits closer to the older policy in terms of its impact.
The comparative impact of this will of course vary a little depending upon the final CPI/RPI figures, while the chosen £ increase under the new policy could be said to reflect each provider’s attempt to de-risk the uncertainty around future inflation values when setting their pricing (i.e. Ofcom’s pursuit of greater clarity has come at a cost). Providers may yet choose to set a different £ increase for 2026 and beyond, so the gap between pricing policies could change in the future.
Otherwise, it’s worth highlighting that not all communication providers play the mid-contract hikes game. A good number of ISPs, particularly smaller players and many alternative networks, often adopt much more static pricing that rarely changes or at least won’t change during your minimum contract term.
Finally, it’s worth remembering that broadband providers are NOT immune to cost increases. Providers, much like consumers, are also suffering under the burden of rising supplier and lease costs, surging inflation, high energy prices, as well as the cost of adding all sorts of new services (e.g. FTTP) and catering for new regulations etc.
Consumer who are hit by mid-contract hikes like this could alternatively try haggling for a lower price when the notification drops (Retentions – Tips for Cutting Your Broadband Bill), although your mileage may vary (big providers will be more receptive). Meanwhile, those on benefits (Universal Credit etc.) also have the option of taking a cheaper Social Tariff – see our Quick Guide to UK Social Tariffs.
In addition, Ofcom’s new One Touch Switching (OTS) system has also made it much quicker and easier to switch providers, but just make sure you aren’t going to be penalised by any early contract termination or exit fees before doing so (this should not be an issue if you’re already out of contract).
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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Ofcom are as useless as the others regulator and competition watch dogs. Midterm price rises should be stopped.
How exactly do you expect providers to deal with rising costs then? Higher upfront cost to begin with? Have everything cost £4/month more from day 1? You can be certain they will never swallow the cost.
@A.non, a contract should be a contract, if you enter into a contract for a certain price then it should stay that price. If the providers want to change prices, then don’t offer such a long contract. i refuse to go anything longer than 18 months and have done so for years, I try to avoid 18 months as well if I can.
Doing okay at the moment, mobile rolling monthly contract, broadband, 12-month contract, 12 month fixed rate for energy, but can get out at any time.
@A.non, well, given I’ll be lucky if my income increases by cpi (and let look at the historical selection of cpi periods, for winners and loosers…) why should any charges get more than cpi (let alone rpi) , is every employer of teh CPS gettign the imo extortionate ‘customer incresese or is some it sitting teh the CPs coffers, I don’t wonder.
Just thinking ahead… If charges are allowed to go up in excess of consumers income increses a) its not sustainable b) be eventually few be be available to afford the services..
The cpi / rpi con shoudl be levelled out for all, just the one anual average, but that’s an aside.
Other contracts I have, e.g. retaail, energy, car finance even mortgages can be on real fixed price contracts, so what’s so special (appart from chronic consumer protection and highly questionable ‘regulators’) in telecoms that they are allowed to get away with devious current practice, which arguably should have been abolished by the powers that (should) be ages ago?
The answer is simple and has been all along. Ban mid contact price increases. They’re a recent phenomenon and, as with gambling, the house always wins. The irony of this poor area of regulation is it’s made consumers worse off.
I can see this debacle becoming the new energy standing charges war but for the telecoms market. The new price increases is the main reason why I won’t switch my pre 2022 Three contract, I got a good deal and it’s 4.5% annual rising. The new deals in pounds and pence are much higher. So the house wins.
I agree with this. If the consumer is expected to take the risk of a longer contract, the provider should be able to do the same. If the provider thinks it is too risky to offer a contract without the possibility of a price hike for 2 years there is nothing stopping the from offering shorter contracts to mitigate this “risk”.
Mid-contract price increases should be outright banned without any exceptions.
Mobile wise I use Smarty, they sent me a text yesterday to say they have extended my deal until June 2026, I get 4GB of data, unlimited calls and unlimited text for £5, I use 1 GB of data a month if that as most of the time my phone is connected to wi-fi.
So it is fine for me, cheap and still give me extra if I do use more.
The only problem is when Vodafone get their mits on three, I hate Vodafone and may change anyway, the problem is, who to?
O2 is part of Virgin and EE belongs to BT, which I hate more than Vodafone.,
Agree with ad47uk, I went over to Smarty myself in September on a £5 deal that is guaranteed until the end of this year and I can terminate anytime I want. It is not acceptable for the networks to tie you down to 2 years on sim only deals when the likes of Smarty & Lebara can do a better deal on a rolling monthly contract.
‘It is not acceptable for the networks to tie you down to 2 years on sim only deals when the likes of Smarty & Lebara can do a better deal on a rolling monthly contract.’
If you don’t find the contract terms acceptable don’t sign the contract and don’t use those networks, Dave? You just wrote that you chose to use other networks. You had the choice and exercised it. You voted with your wallet. Everyone else can too. What’s the problem?
‘I hate Vodafone and may change anyway, the problem is, who to?
O2 is part of Virgin and EE belongs to BT, which I hate more than Vodafone’
Either you’re the most unlucky person ever with these companies and they’ve all treated you atrociously or maybe taking some time in 2025 for some introspection would be a plan. Don’t think you can even get Virgin Media cable or fibre where you are but you seem to find hate weirdly easy.
O2 don’t belong to Virgin. Either Virgin Media or the Virgin Group. Virgin Media don’t belong to the Virgin Group. Virgin Media O2 is a joint venture between Liberty Global and Telefonica. Google joint venture, Liberty Global and Telefonica if you want more information though given how small your world seems to be information probably won’t be of much interest.
@Witcher, yes I know what Virgin Media is and Liberty Global, Liberty Global grabbed hold of one of the decent telecommunications company, cable and Wireless.
I have seen complaints about Virgin and chat to people who are with their broadband service, and they have told me, never to touch the company, from what they have been saying, VM is worse than BT, never knew that was possible.
the other thing is, it is another large company that grabs hold of anything it can.
I had Vodafone years ago and their customer service is awful, it is like talking to a brick wall, trying to get a sim replaced at the time, ended up losing my phone number that I had for a while.
EE is part of BT, enough said.
Not a great fan of Three, being Chinese and that sort of thing, which is why I went for Smarty, yes I know Smarty belongs to Three.
The CMA is not for us consumers, they seem to allow things to go through that should never go through or don’t do anything about things that should not be happening. Very strange indeed,
Liberty bought the Caribbean and Latin American Cable and Wireless operations.
Vodafone bought the business to business. Cable and Wireless stopped selling to regular home consumers once Mercury had bitten the dust and ntl acquired Cable and Wireless CoCo/Consumer Company.
Rose tinted glasses / nostalgia might have been kicking in if you recall it being amazing given it won’t have served you since Bulldog Broadband.
The rest whatever turns you on.
@Witcher
Vodafone bought the business to business?
I can’t remember when it was i had Cable and wireless, but I still have their disk somewhere, I remember being on the bulldog network, well it was not really their network as such, just their equipment in our exchange, but certainly better than what I got with other providers, not by much, but by enough.
Shame it vanished. I changed to a few different providers in the ADSL days, mainly because of lack of choice as providers decided to give up and were swallowed by larger companies, something that is still happening now and is allowed to happen.
The internet was better those days, certainly in content, may have been slower speed, but we did not have all the rubbish that is thrown at us now. Yes, I remember the spyware and the other software that tried to grab info. The difference now is it is in every single web page you go on.
I miss the old BBS days, better community,
It is also unfair if price increases are applied on the same date each year (usually 1st April), if you take out a contract say in February you are going to end up paying more than if you take out a contract in early April. In my view any price hikes should only occur annually from the date the contract was taken out.
Ergo, they are not Mid-Term, i.e. in the middle. Absolutely agree they should be based on the anniversary IF AT ALL.
They should, if justified, been allowed a %age increase, but not based in an unknown variable like CPI. Fairer to say a 5% annual increase on the anniversary, which for Speed/package X @ £n will be £p.p increase.
The simple answer is to shop around for a supplier offering a competitive non-contract or rolling 1-month contract.
They’re everywhere on mobile, where they’re universally cheaper than a contract, and far from impossible to find for fixed.
If only more people did that, the famous invisible hand of the market would stop these pre-determined price rises.
Regulators have a habit of closing stable doors after the horses have bolted in response to pressure from consumers and consumer champions. This often results in ill thought through decisions which have unintended consequences. In my view, the fairest policy is one of no in-contract price rises: both parties then know where they stand.
I appreciate that many will opine that this would just.mean that consumers will have to pay £3 more at the start of a contract than would be the case with the revised OFgem policy. I can live with that.
FWiW, I am not a fan of 2 year contracts.
If only I could believe in the “unintended consequences”, just being chronic delinquency on behalf of soemthing supposed to be a regulator ensuring consumer interests?
I’m shocked – shocked! – to learn that people are worse off under the new system.
That’s why I always renew in May, it means on a 24 Month contract you only have to suffer the second increase for a month.
Actually Mike I renew in March *after* the price rise announcements that way don’t get stung until April the following year.
The simple answer to the problem is ban any contract that is longer than 12 months.
That means no in contract increases and would possibly lead to better competition as people can change every year.
The simple answer is buy a phone and go for sim only, the problem is, people want a new shiny phone ever couple of years, and then they complain when they have to pay sky-high prices.
My Oppo is almost four years old and i will keep it until it stop working.
@ad47uk
Phones are sold separately, usually on 0% APR. Price rises are on the sim plan of the contract.
Doesn’t matter how often you change your phone.
@Spurple, but if you buy your phone and go for sim only, you are not stuck in a contract for 2 years or what ever it is these days. I have a monthly rolling contract that I can get out of when ever I want. I can understand that a contract with a phone network is the only way some people can get to have higher end phones, but to be honest I wonder if some of these people do it because they think they need these phones when they don’t really need them at all.
I knew someone who used to love showing people his latest Samsung that cost what I would call a silly amount of money if you paid for it outright, and yet they were getting nothing different from that phone that they would get from a cheaper model
Because they never used it for more than texting, a bit of browsing and maybe taking the odd photo, plus phone calls.
My Oppo cost me £120 or something like that, takes good photos, good videos for a phone, is pretty fast, have a good screen, certainly for the price and is a good phone.
If someone is going to use all the features of a expensive phone and, then it may be worth paying the cost, but for many people I think they just think they need the newest shiny thing.
Used to be the same with computers, some people would pay over a grand for a computer ansd yet all they did was browse the web and did a bit of office work.
Up to them at the end of the day, but don’t complain about the price increasing.
As for fixed line broadband, that is a different thing, there is not that much choice in getting a limited contract, the majority is 18–24 months, so you are stuffed. There are still a couple of providers doing 12 months, but mainly on FTTC.
I am lucky that I have an altnet where i live and they do 12-month contracts, otherwise i would have moved to Onestream FTTC, at the time Now broadband was doing FTTC 12 months as well., Because i don’t think I would have got what I wanted from plusnet.
Catering to the lowest common denominator led to everyone being worse off. Got it.
Something is wrong with the calculations: I got hit with a near 15% increase, not a 6%
Also it assumes this incompetent govt won’t increase inflation which it is already doing so. There are even talks of FURTHER tax increases in spring budget, pouring even more fuel on the fire and artificially inflating things even more
Often that’s because companies work out the increase on an undiscounted contract price (Virgin Media certainly do). So if you signed up for a great 18 month deal that was 50% of the undiscounted rate, the company apply say a 7% increase to the base price and add that to your discounted rate but what that looks like to you is a 14% increase. Another thing that Ofcom could and should have banned but chose to overlook. It’s not like they didn’t know about it, I raised it in a consultation response when they proposed the daft new fixed sum price increases.
What I don’t get is why providers don’t just average out the cost and market it as ‘no mid-contract price rises’, people would go for that.
What Ofcom legislating to make Corporations better off and not not protecting consumers – remind me what Ofcom are supposed to do, rip of consumers or fatten corporations?
Who on earth that should be actually overseeing Ofcom thinks this is reasonablee after 2 years of ‘excessive’ increases on consumers?
Ofcom don’t and can’t legislate.
That’s correct, but Ofcom like most regulators have powers defined in legislation that enable them to make rules that are enforceable through the courts under various existing Acts. I work for a different regulator, so I’m familiar with the differences between primary and secondary legislation, and between legislation and regulations that are not defined in legislation but are enforceable under powers granted in legislation.
From the point of view of customers and industry, Ofcom do make regulations that are laws.
Indeed. However those regulations have to be compliant with the many laws interacting with their realm of responsibility else they get sued. My point is that they can’t regulate away legislation.
I can see why they’d want to treat lightly on anything that isn’t explicit and clear.
I’m angry about this and I’ve written to my MP, feel free to do the same and use my comments as a template if others wish to do similar:
Would you be able to champion a change with Ofcom’s decision to ban mid contract phone and broadband inflation linked changes please?
Earlier this year the regulator acted as several telecoms companies have recently increased their prices substantially following inflation linked clauses. As one example BT increased their price last year by 14.4%, this was CPI plus 3.9%. Ofcom said inflation linked increases were confusing and said they should stop.
Rather than do what should be the sensible thing, outright banning mid contract price increases (they are a recent phenomenon that was unheard of a decade ago or so), the regulator said price increases should be in monetary values.
In gambling the house always wins. In telecoms, poor regulation means the telcos always win and the consumer misses out. In the example of BT, current CPI plus their 3.9% would have increased a typical £30 price under the old rules at today’s process by £1.86. The new rules mean the increase is actually £3, an outrageous percentage increase compared to the old rules.
Analysis by ispreview.co.uk shows in every case, customers of BT, Vodafone, Talk talk, Virgin Media O2 and others are worse off under these new rules. Companies occasionally use reasoning of network expansion to justify these increases but surely it is only fair that mid contract prices are banished.
As a further anomaly companies usually stipulate a fixed price increase date of say April each year. This means a consumer may join a company in March for one price, have a price increase the next month that is double inflation, then a further inflation busting increase a year later. Three different price increases in two years is unreasonable.
I am concerned young people and less wealthy households are likely to be disproportionately affected as mid term increases are not always considered especially if there is pressure from their social groups to be seen to have the latest tech disregarding its affordability. Banning mid contract increases will give clarity and certainty to these groups that the price they sign up for is the price they’ll pay.
On telecoms groups such as the story at https://www.ispreview.co.uk/index.php/2024/12/broadband-price-hikes-and-the-impact-of-ofcoms-new-uk-policy.html you can see the story comments are palpable and consumer anger is real. I feel the energy regulator Ofgem understood the consumer mood when they recently acted on energy standing charges, now it’s time of Ofcom to act on mid contract rises.
I would be grateful to understand your position on this matter, especially as our part of the country has often restrictive telecoms availability therefore little consumer choice making us particularly vulnerable to these practices. I would like to hear how you could discuss the regulator acting in the interest of the consumer, something that is lacking from their action last year and their action appears to have backfired on consumers. The telcos appear to be taking advantage of the lack of effective regulation and it’s hurting consumers, this hurt will affect the entire industry if not addressed.
Writing to your MP is a waste of time, you may as well stick your head in a bucket and shout in it. They are all as useless as each other, only there for their own pocket .
MPs don’t always get things right but I’m consoled that it was consumer pressure to deal with energy standing charges which caused Ofgem to act. If enough of us here are in different parts of the country with different MPs take time to write, this may get them talking together. It’s frustrating I totally admit, but it is action. All results that have ever been won started somewhere, would you at least consider copy pasting my comments to your MP and seeing what they say?
Ignoring the guy rambling in between arguing with the bloke in the mirror behind the virtual bar the ‘latest tech’ handsets usually come as part of a separate credit agreement from the airtime plan now or at least there’s an option to.
The 4 MNOs don’t have a monopoly on the market there are MVNOs with different policies.
If the pricing from the 4 is unreasonable it opens up a gap for their competition. Competition is good. Let them overcharge, let people vote with their feet.
I’ve worked in this industry for the best part of 10 years and called this so so early on. Logic dictates the rules and companies will always play them to their advantage.
You can’t outright ban price rises because there are legitimate cost increases the business incurs. You can’t force it to be built into the pricing because that sets minimum prices which is bad for competition.
Even on the worst years for inflation, customers were better off than they are now. Ofcom changed it all because people were too stupid and thought they’d get mid contract price rises cancelled. Now they made their bed they’re gonna lie in it.
Hmmm, calling people stupid is not nice, is it.
Not everyone is as educated like you, obviously think you are, albeit no manners.
The solution is to educate people, of course.
The concept of “inflation” is surely basic enough that the fact that so many people don’t know what it means is a sign that something is seriously wrong with the educational system?
Education is relevant, but it’s worth remembering that we all learn about this sort of thing in school at one point or another. However, most people don’t pay regular attention to it or use the detail and with time that memory will fade, which is true for many of the things we all learn when we’re young.
I’ve long since forgotten many of the languages and mathematical formulas I learnt during those years, precisely because the information gained has not been used. Our brains are not like computers.
@Mark I dare say “inflation” is used often enough and is relevant for daily living enough that it’s hardly an obscure concept learnt in school many years ago and that you have hardly heard about since.
I used to think like that, too, until I started working in consumer affairs and realised that the basic knowledge we assume others to have is not always as present as we expect. Ofcom has conducted various consumer surveys that help to highlight this.
All they had to do was ban contracts longer than one year
@Witcher
I find it personally totally acceptable to be tied to a a contract be it years or otherwise as long as I find it acceptable, however how many ‘providers’ (BB / Landline on) are not on the automtic excessive increase bandwagon – there’s scant choice on what has been allowed to become a ‘standard’ practice?
And as to any contract terms we only ever seem to see small print legislated ‘increases’ I recals as a service provider being on annual cost reduction terms! Where’s this in the mix with economy of scale – newer cheaper to maintain systems ‘digital britain’ etc. ?
Seems to me as a modern corporate you just lobby government, give or take via the plethora of ‘asocciations’ to get ‘regulators’ who are devoid of any real consumer competence, to facilitate corporate gain, and fee charger gain for franlky no common consumer sense.
Far too many dubious snouts in contructed troughs, and all seem to forget the users are ultimately paying for all additional parasitc costs increses, which of course partly goes to government (tax take increases..) and corporate even pseudo shell/conglomerate/’brand’ names’ coffers &/ shareholders (who have generally unexcercised responsibilties for what may be considered ill gotten gains/short term trading/profiteering, water companies anyone, uk infrastructure etc.)
Ho hum another happy new year of prole (customer-consumer) abuse?