{"id":36870,"date":"2024-01-16T12:56:38","date_gmt":"2024-01-16T12:56:38","guid":{"rendered":"https:\/\/www.ispreview.co.uk\/?p=36870"},"modified":"2024-01-16T16:24:02","modified_gmt":"2024-01-16T16:24:02","slug":"broadband-isp-bt-confirm-new-uk-pricing-policy-for-2024-drops-inflationary-hikes","status":"publish","type":"post","link":"https:\/\/www.ispreview.co.uk\/index.php\/2024\/01\/broadband-isp-bt-confirm-new-uk-pricing-policy-for-2024-drops-inflationary-hikes.html","title":{"rendered":"Broadband ISP BT Confirm New UK Pricing Policy for 2024 – Drops Inflationary Hikes UPDATE"},"content":{"rendered":"

Following Ofcom<\/a>’s recent proposal to BAN providers from doing mid-contract price hikes that are linked to inflation and percentage changes (here<\/a>), telecoms giant BT<\/a> has today become the first major operator to confirm that they will instead be adopting “clear and simple<\/em>” price changes from “early summer<\/em>” (not in time to stop the next hike, though).<\/p>\n

In recent years most of the major broadband, mobile and phone providers (except Sky Broadband<\/a>) have adopted a policy into their terms that enabled them to increase their prices each year – for both new and existing customers – by c.3-4% plus the rate of annual inflation (CPI or RPI) \u2013 as published in a particular month (usually January or February). For example, BT<\/a>’s price increase last year was 14.4% (i.e. 10.5% CPI + 3.9% from BT<\/a>).<\/p>\n

NOTE:<\/strong> Any changes to pricing policy by BT will also filter down to EE<\/a> and Plusnet<\/a>.<\/div>\n

However, many consumers found the policy confusing (e.g. they\u2019re not familiar with how \u2018inflation<\/em>\u2018 actually works or the meaning of terms like CPI or RPI) and others were more generally angered by the size of mid-contract price hikes, which became even more of an issue with the surging level of inflation over the past two years. In the past, it was also often possible to exit your contract penalty free when a mid-contract hike hit, but the technical transparency of the inflation model also made this more difficult.<\/p>\n

At the end of last year Ofcom<\/a> finally acknowledged all of this by proposing to effectively \u201cban this practice<\/em>\u201c. The move won\u2019t stop mid-contract hikes completely, but it will require providers to tell customers precisely what any such hikes will be when they sign up (in pounds and pence), which crucially rules out changes linked to unknown future inflation values or percentages.<\/p>\n

Now BT has become the first provider to confirm that they will adopt the new approach (here<\/a>), which comes before the regulator has issued their final decision on the matter. But it’s not all good news because their next hike, which is due to be confirmed next week, will continue to follow the existing model.<\/p>\n

Marc Allera, CEO of BT Group\u2019s Consumer Division, said:<\/strong><\/p>\n

“Ofcom<\/a> will finalise its decision on the proposed requirements in the coming months, with new pricing models in place no later than four months after that.<\/p>\n

So, starting in early summer, we will introduce a pricing model consistent with Ofcom\u2019s approach, moving away from % figures and CPI, and offering instead, a clear and simple view of any changes in \u201cpounds and pence\u201d. For new and re-contracting mobile customers we expect this increase to be from \u00a31.50 (for Sim Only and Airtime, for example), and for broadband customers \u00a33.<\/p>\n

Until then, we continue to follow the existing rules, with our annual March 31st price increase of CPI + 3.9% going ahead as per normal. With the CPI inflation rate being announced tomorrow, most of our customers can expect an increase of a few pounds per month, about the price of a takeaway coffee each month.<\/p>\n

Our new pricing model isn\u2019t for all our customers, however. There will be no changes for our customers in financially vulnerable circumstances on EE<\/a> Basics or BT Home Essentials.”<\/p><\/blockquote>\n

The reality here is that, given Ofcom’s proposed change, this outcome is not a surprise and will become inevitable for all of the providers that have adopted such a model. BT is merely the first to confirm it. Ofcom currently plans to confirm their ban sometime in the spring and, allowing time for implementation, this means that it won’t be enforced until sometime in the second half of 2024.<\/p>\n

At this point we still don’t know the finer detail (T&Cs) of BT’s proposed policy change, such as precisely when they will implement the increase to bills for existing customers (we assume the policy will initially impact new customers). This is because the last thing that any of BT’s existing customers want is to be hit by two price hikes in the space of a year, although this is something we’ve seen happen before.<\/p>\n

The proposed broadband hike of \u00a33 per month, if we assume it hits in early 2025 rather than 2024 (like the current timing), is also likely to be above the rate of forecast inflation (CPI). In theory this suggests that customers affected by the future hike will, under Ofcom’s existing rules, be able to exit their contract penalty free again and switch away (or use it as a tool to renegotiate a lower price).<\/p>\n

As we\u2019ve said before, the move to ban the current model is less about cutting customers\u2019 bills and more about making future package pricing clearer and simpler to understand.<\/p>\n

UPDATE 4:19pm<\/strong><\/p>\n

We have sought some clarification from BT regarding the timing of their policy change and its impacts. Firstly, the provider has confirmed that the change will impact both new and any re-contracting customers (i.e. if you don’t re-contract, you may stay on the existing terms \/ policy).<\/p>\n

Secondly, the new policy still reflects an annual price rise, which will “take place 31st March each year beginning 2025<\/em>” (i.e. so there’s no risk of two price hikes hitting during 2024).<\/p>\n","protected":false},"excerpt":{"rendered":"

Following Ofcom’s recent proposal to BAN providers from doing mid-contract price hikes that are linked to inflation and percentage changes (here), telecoms giant BT has today become the first major operator to confirm that they will instead be adopting “clear and simple” price changes from “early summer” (not in time to stop the next hike, […]<\/p>\n","protected":false},"author":1,"featured_media":34956,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"ngg_post_thumbnail":0,"footnotes":""},"categories":[1],"tags":[474,405,36,84],"class_list":["post-36870","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uk_isp_news","tag-bt","tag-ee","tag-ofcom-regulation","tag-plusnet"],"share_on_mastodon":{"url":"https:\/\/mastodon.social\/@ispreview\/111765743279731846","error":""},"yoast_head":"\nBroadband ISP BT Confirm New UK Pricing Policy for 2024 - Drops Inflationary Hikes UPDATE - ISPreview UK<\/title>\n<meta name=\"description\" content=\"Following Ofcom's recent proposal to BAN providers from doing mid-contract price hikes that are linked to inflation and percentage changes (here),\" \/>\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\/2024\/01\/broadband-isp-bt-confirm-new-uk-pricing-policy-for-2024-drops-inflationary-hikes.html\" \/>\n<meta property=\"og:locale\" content=\"en_GB\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Broadband ISP BT Confirm New UK Pricing Policy for 2024 - 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