'Outrageous' price rises could trap telecoms customers between £60 price hikes and £500 exit fees
Our latest research shows that many broadband and mobile customers are trapped in a lose-lose situation where they will be forced to either accept a hefty price increase this spring - or pay an exorbitant fee to exit their contract.
Despite Which? calling for telecoms firms to halt plans for these price rises, and regulator Ofcom proposing a ban on inflation-linked mid-contract price rises, many providers are still planning to shamelessly cash in on the hikes before the ban takes effect, adding between 2% and 3.9% on top of the Consumer Price Index (CPI) rate of inflation.
The combined impact of both bills going up at the same time could see customers facing an annual price increase of £60 per year - or exit fees that could cost a total exceeding £500. Our research shows that, across the board, these CPI-linked hikes mean affected customers essentially end up paying approximately the cost of a thirteenth month on top of their existing annual contract, despite not benefitting from any additional services for the extra cost.
Given many of these providers also increased customers' bills by around 14% in 2023, this is another blow for consumers trying to keep spiralling costs under control.
We're demanding big broadband and mobile phone providers drop hikes buried in the terms and conditions. Agree? Sign the petition
How much could broadband and mobile prices increase?
To understand the impact of this year's price rises on broadband and Sim-only mobile customers, we analysed mobile industry market data and responses to a survey of over 3,000 broadband customers to to calculate the annual cost of these price rises for the average customer of each provider.
Of the major broadband providers using CPI as a basis for their price increases, our research found that the average BT customer will see the largest impact as a result of the price hikes - its 7.9% price increase could cost them an additional £35.92 per year.
TalkTalk has confirmed customers on its variable plans will face a slightly lower (7.7%) hike in percentage terms. Our research found this would result in a predicted £29.53 yearly hike for its average customer. This figure is disputed by TalkTalk.
Shell Energy Broadband has confirmed it will go ahead with a 6% increase - lower than its contracts allow for. This could result in an annual increase of £18.46 for its average customer.
| Broadband provider | 2024 price rise | Annual impact of price rise for the average customer | Date price rises are introduced |
|---|---|---|---|
| BT | 7.9% | £35.92 | March 31 |
| EE | 7.9% | £32.28 | March 31 |
| Plusnet | 7.9% | £28.31 | March 31 |
| Shell Energy Broadband | 6.0% | £18.46 | April 1 |
| TalkTalk | 7.7% | £29.53 | April 1 |
| Vodafone | 7.9% | £29.54 | April 1 |
The average Vodafone Sim-only mobile customer faces the biggest annual price hike of the major mobile providers. Its expected 7.9% increase means the average customer could face a £27.36 annual price hike from April 2024.
Meanwhile, the average EE Sim-only mobile customer faces a potential £24.84 hike, while the average Three Sim-only customer could see their annual bill increase by £19.20.
| Mobile provider | 2024 price rise | Annual impact of price rise for the average Sim-only customer | Date price rises are introduced |
|---|---|---|---|
| EE | 7.9% | £24.84 | March 31 |
| Three | 7.9% | £19.20 | April 1 |
| Vodafone | 7.9% | £27.36 | April 1 |
Use our price rise calculator to find out how your broadband or mobile bill might be affected this spring.
Mobile and broadband price rise calculator
Use our free tool to find out how much your broadband or mobile bill could increase in April, as a result of the confusing inflation-linked price hikes we're campaigning against.
Who is your mobile or broadband provider?
What is your current monthly payment for this service?
*If your mobile bill shows a separate cost for your airtime (data, minutes and messages), use this figure.
£
The other option? An exorbitant exit fee
Because these annual price rises are part of consumer contracts, customers have no choice but to pay the new, higher amount or to cough up for an eye-watering exit fee to terminate their contract - even though the price rises are based around inflation figures customers usually have no way of predicting when they first sign up.
Given the cost of living crisis, we don't think it's fair if the only way for people facing price rises to switch to a better deal is for them to have to pay exit fees that can cost hundreds of pounds. We calculated the exit fee the average customer of each provider with 12 months remaining on their contract would face so the annual price increases can easily be compared against the potential termination fees.
Broadband providers
- BT: £218.64
- EE: £132.38
- Plusnet: £141.81
- Shell Energy Broadband: £222
- TalkTalk: £122.40
- Vodafone: £121.42
Sim-only mobile providers
- EE: £289.64
- Three: £235.24
- Vodafone: £339.75
Ofcom is planning to ban mid-contract price rises
Following campaigning from Which?, regulator Ofcom announced it is planning to ban mid-contract price rises that are linked to inflation later this year.
Ofcom’s review of the pricing practice concluded that inflation-linked mid-contract price rise terms can cause substantial consumer harm by making it more complicated to choose a broadband or mobile deal, limiting consumer engagement in the market and reducing competition in the industry.
We think it is unconscionable that broadband and mobile providers are still planning to go ahead with this year's inflation-linked price rises, which will impact millions of people, even after the regulator declared this practice causes substantial consumer harm and proposed a ban.
We're calling for all providers to scrap this year's above-inflation hikes and implement Ofcom's proposals as soon as possible so new customers are not trapped in these unfair contracts.
Rocio Concha, Which? Director of Policy and Advocacy, said: 'It’s outrageous that telecoms firms could yet again trap their customers between inflation-busting price hikes and punitive exit fees this April, despite Ofcom declaring this practice causes substantial consumer harm.
'Telecoms providers must do the right thing by halting unfair price hikes immediately, rather than piling more misery on their customers.'
Read our open letter to broadband and mobile providers and join our campaign to end unpredictable mid-contract price rises.
How the providers responded
BT (also covering EE and Plusnet) told us: 'Our annual March 31st price increase of CPI + 3.9% is going ahead and we have been clear and transparent with our customers around this. For most customers, this increase will be around £3 per month. This rise reflects the considerable investments we're making into our network, while also protecting customers in financial hardship and digital exclusion, through our market-leading social tariffs.
'Starting in early summer 2024 and ahead of the implementation of Ofcom’s final ruling, we’re introducing a pricing model aligned with Ofcom’s approach, moving away from a price rise calculation based on percentage figures and CPI, and instead offering our customers a predictable long-term view of their contract terms. Annually we expect this price increase to be £1.50 for mobile customers and £3 for broadband customers.'
Shell Energy Broadband told us: 'We work hard to keep our costs down, but unfortunately we experience the same inflationary cost pressures as everyone else. We have kept our 2024 price increase lower than our terms and conditions allow for, and much lower than the current price rise commitments of other providers.'
TalkTalk told us it disputed our research. It said that it calculated the average annual increases for its affected customers as £26.64.
Three and Vodafone declined to comment.
Broadband
Price increases are based on the average amounts paid by customers in a December 2023/January 2024 survey of 3,665 people who had a contract for a home broadband service (including broadband and phone). Data includes a nationally representative sample.
Exit fees*
To calculate the exit fees payable for broadband consumers, we took a hypothetical consumer who has 12 months remaining on their contract at the point where prices are set to rise. This makes the figures for annual price increases and exit fees comparable.
Calculations for BT, EE, Plusnet and Vodafone are based around exit fees faced by a customer paying the average amount as per our nationally representative survey. For these companies, Which? followed the example calculation for early termination charges displayed on their website, which is:
- Price paid per month x number of months remaining
- Remove VAT
- Subtract business cost savings
- Subtract discount for early payment
- Apply VAT
To get representative figures, we substituted in our average price paid per provider, and scaled the business cost savings deducted according to the difference between this price and the example price.
TalkTalk and Shell Energy Broadband have fixed exit fees which were calculated for a customer with 12 months remaining at the point where prices rise. TalkTalk charges £10.20 per remaining month for the majority of tariffs. Shell Energy Broadband charges £18.50 per remaining month for the majority of tariffs.
Sim-only
Price increases are based on an estimate of the average price of a new Sim-only contract calculated using a market database and weighted using Ofcom data on providers' market share and the amount of data individuals have with their contracts. The overall market average represents our estimate for at least 95% of the UK mobile network market. The data collected was on 5 January 2024 and doesn't include out of contract prices.
Exit fees*
Exit fees have been calculated using the providers’ terms and conditions:
- EE’s terms and conditions for calculating exit fees are – remaining monthly charges, minus VAT (20%), minus 4% and then plus VAT (20%).
- Three’s calculations for exit fees are the total monthly charges remaining during the minimum term minus 3%.
- Vodafone calculates exit fees using the outstanding monthly charges for the remainder of the contract minus 2%.
*Note that exit fees may also sometimes be waived or are not payable in individual cases, for example where there have been persistent faults with the service or where the provider is in breach of another significant term of the contract.
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