Gov Confirm “No Plans” to BAN Mid-Contract UK Broadband and Mobile Price Hikes
The Government has clarified that it has “no plans to ban in-contract price rises” for UK consumers taking broadband, mobile and phone services, which makes their recent push to have Ofcom’s CEO, Dame Melanie Dawes, “look at in-contract price rises again“ seem increasingly unlikely to result in any big changes.
At the start of 2025 Ofcom began requiring telecoms providers to adopt a new approach to mid-contract price hikes, which did away with the old and confusing percentage and inflation-based model – replacing it with one that must now set out such price rises “clearly and up-front, in pounds and pence, when a customer signs up” (here). This made annual price hikes clearer and more transparent, but also resulted in many users being hit by even bigger price hikes – often disproportionately hitting those on the cheapest plans with the biggest hikes.
In response, many providers later followed BT’s lead by, for example, setting out a new pricing policy that would increase the monthly broadband price that customers pay by a flat £3 extra – effective from March or April each year (the level of increase varies a bit between providers). But inflation has remained higher than originally anticipated and, partly as a result of that, BT recently announced that they would increase their annual hikes by an extra pound to £4.
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Other providers have since started to follow this practice, but what really caught attention was O2’s decision to go a step further by applying this to existing customers too (i.e. those who had signed-up via the previous policy were forced to accept the new one). In fairness, O2 did allow customers impacted by this to exit their contract penalty free, which Ofcom acknowledged when expressing their own “disappointment” at the change (here).
Fast-forward a public outcry or two and the Government’s Secretary of State for Science, Innovation and Technology, Liz Kendall MP, initially responded to this by appearing to direct the regulator to take a firmer line (here). For example, Kendall suggested Ofcom at least consider the possibility of adopting a “similar regime to those such as insurance, where new and existing customers need to be offered the same deal“, although we feel an outright ban on mid-contract price hikes would be a better approach.
The UK Government’s Chancellor, Rachel Reeves, then waded in (here) by calling on telecoms providers to “reinforce” their commitment to “treating customers fairly” by, among other things, confirming that “customers under contract will not face price rises beyond those they signed up for“. But this statement did cause some confusion, due to how it could be interpreted in two different ways.
On the one hand, it could be seen as the Chancellor making a call for mid-contract price hikes to be banned, which is how a few reports did interpret it. But on the other hand, the reference to price rises “beyond those they signed up for” could be seen as merely objecting to O2’s specific approach (i.e. opposing the forced application of a new price hike policy to existing customers, but not specifically opposing mid-contract hikes).
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Government Makes it Clear
The issue came up for debate again yesterday, this time in the Lords Chamber in the Palace of Westminster (here), where the government were asked, by Lord Sikka, about “what steps they are taking to ensure price increases by mobile phone and broadband companies are fair“. The response came from the Parliamentary Under-Secretary of State for Business and Technology, Baroness Lloyd of Effra.
Baroness Lloyd of Effra (Government) said:
“My noble friend is right to highlight the importance of the ability to have the right contract and of giving consumers the information they need. We have no plans to ban in-contract price rises, but consumers have the right to leave, penalty-free, for 30 days from when unexpected price rises are announced by a provider.
The Chancellor and Secretary of State asked Ofcom to review the suitability of the current 30-day notice period, to ensure that it can be enacted by consumers who experience unexpected and unannounced mid-contract price rises.”
In short, it now seems increasingly unlikely that the government will push Ofcom to make any big changes against telecoms providers around the issue of mid-contract price hikes, which means we may well see other providers taking O2’s approach in the future. Unless, of course, Ofcom’s looming review of the matter does in fact come up with some constructively useful changes, but we won’t hold our breath for that one.
At the very least it would be good to see Ofcom’s review address the unfairness of how mid-contract price hikes are currently being applied (e.g. applying the same flat c.£2-4 monthly increase to those who pay just c.£20 a month and those who pay c.£100 – disproportionately targeting those least able to afford it), which in our view is one of the biggest issues.
However, it is still important to recognise that network operators often do still have to increase prices due to costs rising in other areas, such as for service provision, regulation, energy and the need to invest in new network upgrades etc. At the same time, the level of inflation has remained much higher than it was previously forecast to be, which changes the risk and cost assessment that each provider has to make on their pricing policies.
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Adding to the feeling of the government being tone-deaf on the issue, one of the government’s recent letters even called on telecoms operators to “take proactive steps to move legacy customers onto the pounds and pence approach for price communications“. This is despite what we’ve just said above about the reality that, for some consumers, the old CPI + X% policy will actually be resulting in lower mid-contract hikes than the new one.
On the flip side, many smaller providers are still able to figure all this into fixed price contracts that don’t apply mid-contract hikes, and so it’s not beyond the bounds of realism for the biggest providers to do the same. But until the government and Ofcom recognise that, then big retail providers will continue to get away with bad practice.
On the bright side, switching between telecoms providers has been made significantly quicker and easier in recent years, thanks to systems like One Touch Switching (OTS) on broadband + landline phone and Text-to-Switch (Auto-Switch) on mobile. Consumers can often vote with their feet if they choose, but many remain wary of doing so.
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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That is disappointing news to read. Mid-contract price increases are all well above inflation, in the case of cheaper tariffs, let’s say £10/month, after 2 years you end up paying £15/month; if inflation were that high across the economy the BoE and Treasury would be in a massive panic.
All the major networks also seem to be pricing roughly in line with each other, including the magnitude of the mid-contract rises. Even if there isn’t actual collusion, it seems to indicate that this isn’t quite the competitive market it should be.
The costs imposed by the government through new legislation are well above inflation. The government ismerely trying to have its cake andeat it by imposing a price control policy.
Most players are pricing below cost and hoping to pick up enough customers to survive the next round of failures and mergers.
A market where customers aren’t Corinth cost of the thing they’re buying feels like it’s quite competitive.
“covering”.
The government and Ofcom should look at limiting all ISP contracts to 12 months instead, if they won’t take action to stop in contract price rises.
That would mitigate the issue significantly.
Completely agree. 12 month contracts as standard, anything more than 12 months must have a penalty free exit if the increase is higher than some standard amount.
If contracts are limited to twelve months, then prices across the border (not just to the consumer) will rise to reflect the elevated risk to trading revenues. Further regulation will also impact existing investment plans.
@Jack
I totally agree with this, I’d even support a 6 month contract option (with higher price of course).
-no mid rises
-fair exit penalty, free if you fall out of contract after 12 months.
-if you upgrade speed, this should not restart the contract either.
-if your internet suffers/dead more than a week then you can exit penalty free
Banning mid-contract price rises would be beneficial for all internet subscribers and it would be free for the government. I can’t imagine why they don’t ban it outright, it’s a no-brainer to me.
Before someone starts to argue the ISPs can’t estimate how much it will cost them to provide the service, I want to ask you to explain how it is reasonable to expect the consumer (who is often not an expert) to enter a contract without the total contract value known.
You are not considering the impact of rising costs on the operators and thus their need to raise prices.
What we do have is a government trying to minimise the impact of its own policies by imposing price controls on businesses.
Far2329Light, I do. But I expect a competent ISP to be able to price it in in the beginning, or if they can’t only offer a shorter contract, which would also protect the ISP in this case.
But if you don’t expect the ISP to be able to price in the changing costs, how can you expect a random subscriber to decide if they can afford the service if you don’t even know how much it is going to be?
The operators can pass on rising costs via price increases for new contracts. The consumer is hound for the contract term but utvaeems the operators are not.
bound not hound
> You are not considering the impact of rising costs on the operators and thus their need to raise prices.
Cool — but ISPs cannot pass these rising costs on to customers at the moment because prices are fixed in pounds and pence at contract inception. Fundamentally there’s very little difference between (e.g.) £x for 12 months and £x+4 for 12 months compared with just charging £x+2 for the whole contract — the main difference is that large price increases allow for deceptively cheap initial monthly prices.
Lobbying is the answer, these ISPs will be lobbying Ofcom on a continued basis for what they want, and there is probable threats been made as well, the obvious one been to kill new customer deal is if mid contract rises are banned.
I expect like Mark said this is really unlikely now given Ofcom is just an arm of the government.
The total value is clearly stated. It’s not hidden.
@htmm:
No you are not.
@ Ben:
The costs are passed on by increasing the price rises above CPI.
The CSPs can not absorb the extra costs being imposed upon them via government legislation.
Again, government-imposed price controls do not work; we have seen this before, and we are seeing here that they are not effective at all.
They just need to enforce a “No Get Out” clause on the providers and what you agree to at the start of your contract is what you pay for that period, full stop.
And what would the cost of that be?
The thing for consumers to do is vote with their feet and don’t use providers that do this, particularly the ones that lock the customer into a two year contract with two big rises baked in each April. If people stop choosing these providers, they will have to look again.
Unfortunately, a significant proportion of the UK population seem to be unable to see beyond the headline grabbing initial monthly rate.
The level of financial illiteracy in the UK is frightening.
Hopefully the are enough of us, with enough voting feet, to be able to make a difference, but I’m not holding my breath on that score.
This is why 5 years ago we left EE, bought our new iPhones direct from Apple and got a couple of cheapo sims for Giffgaff and Smarty. Never looked back. Mobile contracts are a mugs game. My Giffgaff sim has never increased in price in those 5 years. My brother in law lives in a village with only a good Vodafone signal. 02 and EE are patchy at best. His sim only went up from £17 to £23 over the course of the contract so I moved him to Lebara, same signal but just £4.99 a month for the same minutes, same texts and same data
Absolutely 100% correct.
I kind of agree, as long as the phone you buy lasts long enough to make it pay or you pay very little for your phone.
I have spent about £370 in 4 years or so, that is including the cost of my phone and my sim only deal on Smarty, 4GB of data, unlimited text and minutes
Just doing a quick search on Money supermarket dot com and |I have come up with a samsung Galaxy S25 FE, some company called Mozillion, using the EE network, for 10GB of data, more than i would ever need, unlimited text and mins, would cost me over 2 years, £587.
I realise that the Samsung is a £650 phone, if you buy it outright, so maybe if you are only keeping your phone for a couple of years and want a expesnive phone, it may work out cheaper on all in one contract.
I have no need to pay that amount of money for a phone and I certainly don;t need loads of data and want to keep my phones as long as possible, so a sim only deal is better for me and I presume many people.
Also, the price have not gone up in the 6 years or so I have been using Smarty, in fact i have got more for the same price over the years.
“… confusing percentage …”
The previous system was transparent. The current one exhibits what seems to be a lack of understanding of basic arithmetic on the part of regulators, along with good-old price controls.
Apart from it wasn’t. It was based on a percentage figure neither party knew at the time plus another percentage figure, say 3.9%, on top of that unknown figure. Hardly transparent when you don’t know how much its going up by.
Don’t get me wrong, I really don’t like the current system at all but to say a system based on figures no one knows is transparent is just crazy talk.
@Matt:
You get a percentage figure, which is the clearest way to set a price increase.
“customers under contract will not face price rises beyond those they signed up for”
I am betting a lot of people who voted for Labour in the 2024 General Election now wish they had something like that in writing from their Labour candidate.
The Lord of the Manor doesn’t have to worry about Broadband price increases or any other one for that matter, so much for the Labour Goverment being on the side of the peasants. Other than a revolution we can’t kick the blighters out!
“… On the flip side, many smaller providers are still able to figure all this into fixed price contracts that don’t apply mid-contract hikes ../”
Those operators are likely to be sustained via external funding rather than be operating on profitable, sustainable business models.
That’s a funny way to describe Zen Internet?
That’s rubbish. Its nothing to do with sustainable business models. Its all to do with marketing and headline rates.
No reason at all why larger providers can’t figure out fixed price contracts. They already know the overall price of the contract when you sign up, its simply the total cost of all the monthly payments. They could just average this out over the contract period and charge that per month.
@Matt:
It is exactly that.
Mid contract rises should be banned outright.
Years ago contracts were 12 months, then 24 months, now 36 and beyond.
Providers should be pricing their contracts accordingly from the start to be ‘sympathetic’ to future inflation costs, and if they are not prepared to take that risk on a 3 year contract then shouldn’t be offering 3 year contracts.
Locking in the customer should also equally mean locking in the provider – none of this staged payments rubbish where its one price for 6 months, another for the next 6 months, another for 12 months after than and another for the last 12 months all designed to drag people in at an initial appealing price, then yanking it up as time goes on.
Simple 12 months at x amount, or 24 months at x amount, or 32 months at x amount – nothing else.
That’s not quite right – nobody is selling residential broadband with a minimum commitment of “36 [months] and beyond”. It’s true that you can finance a flashy mobile phone over 36 months, but that has nothing to do with the issue at hand.
This is one of the reasons i left Virgin Media. Locking in 2 years on old hybrid coax fibre with price rices each april. I switched to the youfibre who have a superior product with an 18 month contract without price rises.
I have also changed my mobile to ID Mobile who don’t do price rises on sim only.
Customers should switch and the big companies will soon change pricing strategies.
It shows it can be achieved by others not doing price rises.
Whilst easier to do for mobile depending on signals in your area, for broadband it is very area dependent.
For myself in an average market town, its Virgin Media HFC upto 1Gbps D/L or Openreach FTTC about 55Mbps D/L.
Yes whilst some ISPs who use Openreach could possibly offer no mid-contract price rises, the drop in speed of the connection just wouldn’t work for us as a busy household. So we’re stuck with VM and their price rises.
Vote with your wallet people. For £43 a month I’m getting 5 sim cards from Smarty, 10% discount on each because they’re linked in a group. 4 of those are in my families mobile phones with varying data plans to suit. One sim is in a router pumping fast wifi around the house, genuinly unlimited, i also have a dect phone plugged in the router so i get unlimited ‘landline’ on that sim as well. No contract, no price rises. No brainer. And Yes, I can watch seamless 4k TV. Don’t pay the annual con rise.
Smarty is bad as three if your signal with is poor and can’t get 5g
Stick with ee
@Jay, you say stick with EE, but EE is not great around here, it is fine at home, but useless at my partner’s place, that is why she changed to Smarty, or one of the reasons and at work, people using EE are forever complaining about not getting signal in the canteen, me, no problem at all with Smarty.
Depends on where you live
@Jay talking total nonsense, Three may be poor where you are but in other areas, it offers the best and fastest signal.
The better advice for anyone considering the 4G/5G home internet option would be to try a few one month SIMs on the different networks, test it and see what gives the best connectivity.
24 months or 36 months contract should be BANNED
Presumably you think the same about gas/elec providers and mortgage fixes?
This is why I swap to Youfibre, no more price escalator!
Will be swapping the mobile soon, as well!
Any signed of the mobil sims yet Jeremey? ;);)
Is it spelled kickbacks or kick-backs?
How corrupt this nation is becoming from council tax, train fare increases, bus fares and energy prices.
Sick to death of ripping us off every company just jumping on the bandwagon cashing in on the hardworking people.
First it’s was CPI/RPI 30p next 80p
£1.00, £1.50 now £2.50 talk talk went to next level £4.00 what next £6.00 when does it ends.
My O2 SIM-only deal.
£6.50 with discounts; after the discount ends, my price will be £8.50. With two price hikes, I’m looking at a £14.00 SIM-only deal; it’s bonkers.
I voted with my feet and moved over to ID Mobile.
I hope these companies keep their promises of no midterm price increase.
Giffgaff, ID Mobile SIM only, Lebara, Smarty, Mozillion, Spusu, Talk Mobile, and Voxi
Don’t have a contract, I am using smarty on a rolling monthly thing, I can leave when ever I want. £5 a month for 4GB of data, unlimited text and mins, fine for me and I doubt I would get anything much better if I went for 12 months
Most of the time my phone is connected to some Wi-Fi, i only use Data normally to listen to music while walking
Really vote with your feet and emigrate then.
Mobile and broadband contracts worked fine for many years at a fixed cost during the minimum term (which used to be 12 months as standard). Then operators started using inflation as a reason to increase prices and then a minimum inflation rate (RPI + x%) in case inflation wasn’t high enough. The Government stepped in and said any increases should be known when a consumer agrees to a new contract so operators added fixed amounts which now often exceed inflation (some are 10% or more). It’s not like the big players aren’t huge profits.
Contracts are also longer today than they were previously. The incentive for a longer contract used to be a guarantee of a lower fixed price. Operators shouldn’t offer longer minimum contract periods if they can’t do so at the same initial costs throughout the minimum period.
That said, if the Government banned mid-contract increases, operators would likely increase the tariffs to generate income. I suspect they would increase the monthly tariff and then offer a discount for the first 6/12 months or cash back – which would effectively be the same thing as they do today but a perceived discount rather than an increase.
If a major player stopped in contract prises, what would happen to the millions of people out of contract? They wouldn’t get any rises. Hence why even tho the current system has a total amount in pounds n pence for a contract, if they go out of contract they still get the increases stated in the original contract. Not everyone is renewing contracts at the end of term, in fact I would estimate well over 50% are going out of contract.
Well a spinless Gov and toady to the corporations Ofcon, seems like we might as well make a bit of a saving and bin Ofcon, at the shareholders would get a bit as you can rest assured the savings won’t get passed on to consumers, come to think of of it might as well get rid of government that has anything to do with this and just let the corps do what they want’ to the ‘punters’ as they seem to be doing now. government for consumers, only by delinquency?