{"id":36191,"date":"2023-11-02T00:01:52","date_gmt":"2023-11-02T00:01:52","guid":{"rendered":"https:\/\/www.ispreview.co.uk\/?p=36191"},"modified":"2023-11-01T10:56:17","modified_gmt":"2023-11-01T10:56:17","slug":"85-percent-of-uk-says-mid-contract-telecoms-price-hikes-are-unfair","status":"publish","type":"post","link":"https:\/\/www.ispreview.co.uk\/index.php\/2023\/11\/85-percent-of-uk-says-mid-contract-telecoms-price-hikes-are-unfair.html","title":{"rendered":"85 Percent of UK Says Mid-Contract Telecoms Price Hikes are Unfair"},"content":{"rendered":"

A new Opinium survey of 2,000 UK adults, which was commissioned by Uswitch<\/a>, has today claimed that 85% of broadband ISP and mobile customers view annual price rises as “unfair<\/em>” and 87% think they should be allowed to leave their provider penalty free if they raise prices mid-contract.<\/p>\n

Price rises are an often-unavoidable part of service delivery these days, although the new survey was specifically focused on mid-contract increases by providers that adopt the policy of raising their prices each year by up to nearly 4% + the rate of annual inflation (CPI or RPI) \u2013 as published on a particular month (usually January or February). Last year this resulted in broadband and mobile consumer being hit by average hikes of around 14%.<\/p>\n

NOTE:<\/strong> CPI and RPI (Consumer \/ Retail Price Index) are measures of inflation (i.e. the increase in the prices that we all pay for goods and services), which is often expressed as a % percentage.<\/div>\n

Most of the major operators have now baked the aforementioned model of annul mid-contract increases into their package terms. Under Ofcom<\/a>’s current rules, this approach makes it difficult for customers to exit their contract penalty free, since they’re deemed to already be aware of the future hike – even though customers cannot accurately predict what inflation might be in the future and many don’t even understand it.<\/p>\n

According to the new survey, not knowing the value of the potential price rise is the biggest cause of concern for 40% of consumers, and 62% of respondents said they would leave their provider at the next available opportunity if hit by a price hike. But in reality, we don’t see any evidence for that level of movement, with annual switching tending to be closer to around the 10-20% mark.<\/p>\n

Some 71% said they would switch to a provider who didn’t have mid-contract rises if given the choice, with 20% citing no price rises as a top priority when choosing a deal, along with reliability (57%) and overall cost (48%). Finally, 75% said they would be put off from taking on a new mobile or broadband contract if it had mid-contract hikes baked into the terms.<\/p>\n

Nevertheless, there’s often a stark difference between what people feel (say) in surveys like this and what they actually do. In reality, most consumers take a package from one of the largest players and almost all of them, except Sky Broadband<\/a>, currently adopt the same model. But even Sky still does annual price rises, albeit to a less aggressive level. Many smaller providers do keep prices low, but issues of brand awareness and network availability can hinder adoption.<\/p>\n

Mercifully, the rate of inflation is now starting to fall, which means that future hikes shouldn\u2019t be as bad as last year. But forecasts suggest it will still take until early 2025 before inflation settles back down to something close to the current 2% target (CPI is currently 6.7% and RPI is 9.1%). Ofcom<\/a> are currently reviewing the problem (here<\/a>), but it remains uncertain whether they will go as far as to ban the practice.<\/p>\n

The UK Committees of Advertising Practice (CAP and BCAP) \u2013 sister bodies to the Advertising Standards Authority<\/a> (ASA) \u2013 have separately set out new guidance for how broadband ISPs and mobile operators should communicate mid-contract prices hikes to consumers, which will make such policies clearer and more transparent (here<\/a>). But this is not a ban, and those changes won\u2019t be enforced until the end of this year.<\/p>\n

The hope of many is that Ofcom<\/a> will either ban mid-contract hikes or, at the very least, force providers that introduce such rises to offer customers a penalty free right to exit their current term. The latter would mark a return to how the market operated before the CPI\/RPI + X% model became widely adopted, with almost all of the major players choosing to mirror BT<\/a>\u2019s lead.<\/p>\n

Sadly, the possibility does exist that the regulator may simply require providers to be more transparent with their pricing, which may consumers would likely view as being a cop out by the regulator.<\/p>\n","protected":false},"excerpt":{"rendered":"

A new Opinium survey of 2,000 UK adults, which was commissioned by Uswitch, has today claimed that 85% of broadband ISP and mobile customers view annual price rises as “unfair” and 87% think they should be allowed to leave their provider penalty free if they raise prices mid-contract.<\/p>\n","protected":false},"author":1,"featured_media":23924,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"ngg_post_thumbnail":0,"footnotes":""},"categories":[1],"tags":[99,36,34],"class_list":["post-36191","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uk_isp_news","tag-asa","tag-ofcom-regulation","tag-statistics"],"share_on_mastodon":{"url":"https:\/\/mastodon.social\/@ispreview\/111338023470084663","error":""},"yoast_head":"\n85 Percent of UK Says Mid-Contract Telecoms Price Hikes are Unfair - ISPreview UK<\/title>\n<meta name=\"description\" content=\"A new Opinium survey of 2,000 UK adults, which was commissioned by Uswitch, has today claimed that 85% of broadband ISP and mobile customers view annual\" \/>\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\/2023\/11\/85-percent-of-uk-says-mid-contract-telecoms-price-hikes-are-unfair.html\" \/>\n<meta property=\"og:locale\" content=\"en_GB\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"85 Percent of UK Says Mid-Contract Telecoms Price Hikes are Unfair - 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