{"id":33226,"date":"2022-12-20T00:01:10","date_gmt":"2022-12-20T00:01:10","guid":{"rendered":"https:\/\/www.ispreview.co.uk\/?p=33226"},"modified":"2022-12-19T13:55:42","modified_gmt":"2022-12-19T13:55:42","slug":"virgin-media-o2-uk-may-adopt-inflation-busting-price-hikes-in-2024","status":"publish","type":"post","link":"https:\/\/www.ispreview.co.uk\/index.php\/2022\/12\/virgin-media-o2-uk-may-adopt-inflation-busting-price-hikes-in-2024.html","title":{"rendered":"Virgin Media O2 UK May Adopt Inflation Busting Price Hikes by 2024"},"content":{"rendered":"

Sources have indicated to ISPreview that broadband customers of UK ISP Virgin Media<\/a> (VMO2) might face bigger price hikes in the future than usual, with the provider being tipped to adopt the same annual style of inflation busting RPI + 3.9% hikes as those of their mobile base (e.g. O2<\/a> sims).<\/p>\n

In recent years, much of the fixed broadband, mobile and phone market – at least among the biggest telecoms providers – has switched to adopt price increases linked to inflation. In this model, a provider increases its prices by a measure of either the annualised Retail Price Index (RPI) or Consumer Price Index (CPI) plus a set amount on top, which is usually 3.9% (the total increase usually reflects an average across all of their products).<\/p>\n

For example, the latest CPI rate is 10.7% and RPI is 14%, thus an operator that chooses to increase its prices by RPI + 3.9% today would be raising them by an average of 17.9%! But it’s worth noting how most broadband providers that adopt this approach use CPI and not RPI (i.e. using RPI on broadband is not a good look).<\/p>\n

By comparison, Virgin Media<\/a> has tended to buck this trend on their fixed line base and, as a result, last year’s annual increase was distinctly less aggressive than some of their closest rivals (here<\/a>). But it should be said that their mobile customers already suffer from the RPI + 3.9% method (here<\/a>). However, normally credible sources have now informed us that this may change in 2024.<\/p>\n

Assuming the ISP follows the same trend in 2023 as they did in 2022, then we expect their usual round of annual price hikes to be announced in January or February 2023. But this may also give notice of their FUTURE intention to update the terms of their packages to adopt the RPI + 3.9% approach for their broadband base.<\/p>\n

The change, which could then become effective for all customers on 1st May 2023, would mean that the price hikes introduced from 1st April 2024<\/strong> (i.e. the following year) would be based off the RPI rate published in February 2024, plus 3.9% on top. The good news is that we’re expecting inflation to fall significantly by February 2024, although there’s still a high level of uncertainty over those forecasts.<\/p>\n

As we’ve mentioned before, adopting the CPI\/RPI + 3.X% method does have the benefit of giving customers more transparency over future price increases, but that same transparency also makes it harder to exit your contract penalty free (i.e. Ofcom<\/a>’s rule against mid-contract price hikes ceases to be much help). On top of that, many consumers don’t understand how the inflation linked price increases even work.<\/p>\n

A VMO2 spokesperson told ISPreview.co.uk:<\/strong><\/p>\n

“We\u2019re not confirming any pricing changes and if we do change prices then we\u2019ll communicate directly to customers in an open and transparent way”<\/p><\/blockquote>\n

At this point it’s worth highlighting that the UK advertising watchdog is currently considering new guidance, which could require information about mid-contract prices hikes to be more prominently stated in future ads (here<\/a>). In any case, we’ll know whether VMO2 intend to implement the RPI + 3.9% approach sometime during the early New Year period.<\/p>\n","protected":false},"excerpt":{"rendered":"

Sources have indicated to ISPreview that broadband customers of UK ISP Virgin Media (VMO2) might face bigger price hikes in the future than usual, with the provider being tipped to adopt the same annual style of inflation busting RPI + 3.9% hikes as those of their mobile base (e.g. O2 sims).<\/p>\n","protected":false},"author":1,"featured_media":31377,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"ngg_post_thumbnail":0,"footnotes":""},"categories":[1],"tags":[419,56,32,475],"class_list":["post-33226","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uk_isp_news","tag-docsis3-1","tag-fttp","tag-o2","tag-virgin-media"],"share_on_mastodon":{"url":"","error":""},"yoast_head":"\nVirgin Media O2 UK May Adopt Inflation Busting Price Hikes by 2024 - ISPreview UK<\/title>\n<meta name=\"description\" content=\"Sources have indicated to ISPreview that broadband customers of UK ISP Virgin Media (VMO2) might face bigger price hikes in the future than usual, with\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.ispreview.co.uk\/index.php\/2022\/12\/virgin-media-o2-uk-may-adopt-inflation-busting-price-hikes-in-2024.html\" \/>\n<meta property=\"og:locale\" content=\"en_GB\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Virgin Media O2 UK May Adopt Inflation Busting Price Hikes by 2024 - 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