Broadband consumers in the United Kingdom may see an increase of up to £113 ($126) in their bill next year, The Guardian reported. This is possible to happen if several of the largest telecom companies in the UK go ahead with inflation-busting price increases next spring, as predicted by expert consumer watchdog Which?
Many of the major internet service providers in the UK, including market leader BT, TalkTalk, EE, Plusnet, and Vodafone, have mechanisms in place that automatically increase customer fees each year by the amount of inflation as measured by the January consumer prices index (CPI) plus 3.9%.
The Bank of England predicts that inflation will be slightly around 10% in January, resulting in a 14% increase in the bills of millions of broadband subscribers mid-contract.
The Latest Broadband Survey
In the most recent broadband survey by Which?, the average BT customer was found to be facing the greatest possible rise of £113 ($126) compared to what they were paying in January of this year.
Plusnet, which BT also owns, had the lowest price increase for its customers among the five telecommunications, amounting to £87.15 ($97).
If the telecom firms push through inflation-busting rate hikes of roughly 10% in April 2023, meaning that by next spring, their consumers will see their bills climb by between £120 ($134) and £156 ($174) in just two years.
Which?'s Take
Chief Economist and Director of Policy and Advocacy at Which? Rocio Concha expressed disappointment regarding the news.
She told The Guardian that it is "unacceptable" that many internet consumers are suffering price hikes amid an unending cost of living crisis. She added that if prices are increased in the middle of a customer's contract, regardless of whether or not the hike is "transparent," they must be permitted to cancel the contract without incurring any fees.
BT, which has previously declared it would stay the course next year despite its own expenses increasing, has ascribed most of its sales growth between April and June to this year's roughly 10% bill hike.
The so-called "inflation-plus" mechanism is predicted to provide telecoms businesses a windfall of about £2 billion ($2.2 billion) next year.
Telco regulator Ofcom has warned ISPs to think carefully before implementing more large price increases, saying that a record 8 million families are already having trouble paying their bills.
Update on Other Internet Providers
Other providers like Hyperoptic, Utility Warehouse, and Zen Internet guarantee their clients a price freeze for the duration of their contracts. At the same time, KCOM has taken steps to eliminate price increases in the middle of contracts this year.
Meanwhile, Sky and Virgin Media do not use an inflation-linked system to increase their prices, but they raise prices and let consumers transfer without penalty.
Earlier this week, the UK's Labour party promised to end the use of the mechanism and mid-contract price increases if elected.
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Written by Trisha Kae Andrada
