Broadband, TV, phone and mobile provider BT (inc. EE) has today reiterated their policy on annual UK price increases, which readers may recall was first introduced last year (here and here). This is intended to align with Ofcom’s ban on mid-contract price hikes that are linked to confusing inflation and percentage-based changes (here).
Just to be clear. Ofcom’s change is NOT designed to stop mid-contract hikes completely, and is more about making future pricing clearer and simpler. But it does require providers to tell customers precisely what any future price increases would be when they sign up (“in pounds and pence“). This rules out changes to ‘core subscription’ prices that are linked to unknown future inflation values or percentages.
One of the catches with this change is that consumers may find themselves, depending upon the state of their existing contract, being impacted by either the old or newer policies (i.e. Pounds and Pence vs CPI + 3.9%) because the market is currently in a state of transition. Some providers, like Virgin Media, have got around this by pushing existing customers on to the new policy, while most others, like BT, are allowing customers to make their own decision when re-contracting or upgrading.
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BT’s update today merely confirms that they haven’t made any changes to the policy that was first adopted in the spring of last year, so they’re not really saying anything particularly new. But some may find the information they’ve issued useful.
BT’s Pricing Policy Statement
So, from 31 March 2025, for new and re-contracting mobile customers on the Pounds and Pence model, 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.
There will be customers on our CPI+3.9% model, because they were already in contract before we introduced the Pounds and Pence change. There will also be some customers with a mix of the two models across different products.
For CPI+3.9%, we use the December rate calculated by the Office of National Statistics to calculate our price change. This was 2.5%, which means a price change of 6.4% (CPI:2.5% + 3.9%). On average, this year’s change is around £2 to £3 per month – a very small part of an average household’s bill.
A total of 2.6 million customers will be excluded from price change. This includes our Social Tariff customers, landline only customers who don’t have broadband with us or another provider, and those with PAYG on mobile.
For everyone else, this small increase means we can keep giving our customers even more with the latest tech across fibre and mobile as we roll out 5G standalone and Wi-Fi 7 – setting a new standard for connectivity in and out of the home – continue to invest in our network and keep our most financially vulnerable customers connected.
We’re the UK’s best mobile network for 11 years in a row, and one of the country’s fastest broadband providers. The quality of those network is the foundation that means we can bring our customers so much more as demand continues to increase. Average mobile data useage, for example, has more than trebled in the past five years, and mobile download speeds have doubled.
With customers using more data and getting faster speeds, these relatively small price increases mean we can give them the networks they need.
As we’ve previously reported, most of those broadband customers on the older CPI+3.9% model will probably be better off than those who are subject to the new policy (here), which reflects the fact that a static £3 per month increase will often be greater than +6.4%. The other catch is that those on the cheapest entry-level packages will be hit the hardest by the new policy as the £3 increase is the same for everybody, regardless of how much you pay per month.
The policy also only applies to the core subscription prices and not optional add-ons, out of bundle charges or call prices. Suffice to say that, during this transitional period and even after it, there’s still plenty of scope for consumer confusion to creep in. Meanwhile, savvy consumers may be able to use the change to renegotiate a lower price – your milage on this front may vary, but it’s always worth a try (the worst they can say is “no”).
On the flip side, BT and others will always argue that they need to raise prices because their own costs keep going up due to network upgrades, new regulations, new features / content and rising service delivery costs (e.g. energy bills more than doubling over the last two years) etc. Inevitably, those increases end up being passed on to consumers.
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However, not all providers adopt the same approach and many smaller ISPs, particularly newer alternative networks (altnets), often promote packages with simple fixed price terms. Choice does exist in the market, at least for most people.
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I will never know how it was ever justified, in permitting them to charge an extra 39%, on top of the national CPI rate of inflation. 2.5% means that goods and services have increased by 2.5%; the providers, included. Ah, I forgot we were in the UK. That now makes sense.
Not quite sure how I ended up with only 39%… 2.5% to 6.4%, is a 156% increase. 156%, on top of CPI. I don’t care how much more data they spin we’re using; that is robbery.
There must have been some serious lobbying, both for allowing mid contract prices in the first place, and also to be inflation busting.
Ofcom is pretty broken now, definitely a regulator that has become entrenched in those it regulates.
A proper regulator would make it illegal to have different in/out contract pricing, would force the companies to choose between locking in customers and increasing prices, and be consistent in applying rules, now rule enforcement feels pretty random.
They would also have much larger fines and much shorter grace periods for rule changes.
Off Com should ban all price rises mid contract. If 24 months is too long to go between price rises, telecoms companies should revert to 12 month contracts.
@John Simon Knight Agreed.
You sign a contract for services rendered, you should not have an increase mid-contract.
It shouldn’t occur anywhere in any contract, not just for broadband/phone.
And the stupid thing is you can often ring them and ask them to re-contract mid-term and you get the price that new customers get.
If they can do that then they have zero excuse for mid-contract rises.
Another rip off UK – hate this country to be honest under Liebour!
… what?
A comment worthy of Facebook
Ofcom decided to change the way mid contract prices were carried out in December 2023 when the Tories were still in Government. So a very silly comment. Maybe get angry at Ofcom instead?
https://www.ofcom.org.uk/phones-and-broadband/bills-and-charges/ban-on-inflation-linked-mid-contract-price-rise/
I’d genuinely suggest Mark (owner of this site) delete total nonsense like this, it is utterly pointless.
@Phil – suggest you go for a walk or do something vaguely constructive.
So policies that were established while the previous government was in power are somehow this governments fault. OK then.
You live off welfare. Rest of us are being ripped off to sub you because you are too depressed to work but well enough to post online about how much our money buys you.
@Whatever. WOW, no need for that, you don’t know what may be wrong with him and depression, I mean real depression, not those that say, I am depressed, can control your life. I know people who have lived with it for years, sure they do or did work, until they had other ill health problems.
There are people with nothing wrong with them and yet sit down on their backside getting paid for doing nothing.
As been said, the policies were done under the Tories, not that Labour is doing anything about it, Labour have already shown what they are capable off.
They are all the same, no matter who gets in power.
Annual increases as per the (CPI) rate of inflation could arguably be justified, but adding extra on top of that was somewhat absurd as that in itself is fuelling inflation. In other words, providers were justifying the raise by saying ‘costs rise so our prices are keeping up with inflation’, but said prices rises were boosting that underlying rate of inflation. A kind of slightly mad cyclical argument!
The new arrangements as implemented by many providers also seem like they could be counterproductive in the longer run – imagine a customer with inertia who just sticks with a provider as the prices rise each year. Eventually they are likely going to notice just how much they are paying compared to the advertised costs for new customers – whilst I’d imagine the incumbent provider’s retentions team would in such cases easily offer a new deal at a much better price, the customer might be so annoyed they’d been taken for granted over several years that they then take their custom elsewhere and migrate to another provider.
I often wonder what would happen to a legacy SIMO plan I have, if I just left it to renew. Would it reach £100 per month, due to the annual rises? I guess there comes a point, where favourable roaming terms are not so favourable, when compared to the impact of annual price rises.
The simple answer is to shop around. Both my broadband and mobile don’t have mid contract price increases. When they come to an end fingers crossed I’ll be able to find new no increase contracts again.
I will never got back to BT/EE since they increased by old contracts by 14.4% last year.!
It’s so simple 12 month contracts that is it and if companies want to offer longer they need to price lock.
This makes it simple for every one.
I don’t understand how this mess has been allowed it was never like this before you paid the set price that was it and your contract expired (if you had a promo/discoutn that would end so you would renew or move on)
It was the same for mobile infact they used to give you a phone as part of contract not anymore you pay silly device plans etc which end up costing you more for the device then if you just saved up for the thing.
ofcom like most of these bodies are just puppets of industry they dont care at all about consumers its a front.
Sadly the industry wants to have its cake and eat it — locking customers into long contracts without taking on any risk of margin erosion.
Not so long back I was on Vodafone and they wanted to turn a soft data cap to a hard cap. If the change made me worse off over a three month period they had to let me out of contract early. That happened and I left them without penalty. They then changed their policies at the time to make things fairer. This is because the contract I had prohibited mid term rises.
It’s usual for business to have one, three, five, and even 10 year plans. The mid contract price increase is a new phenomenon. Operators can plan, they have planned, this relatively new process is just additional revenue.
It’s worth remembering they will probably tell Ofcom they need the additional money for network investment as they have done several times before. Telecoms networks have been evolving since the very beginning with ongoing changes since the dawn of the industry. Lately it’s 5G, fibre, and spectrum investment. Not that long back it was 4G, then 3G with the massive cockup with spectrum auctioning, GSM… well you get what I mean.