Upcoming mid-contract price hikes could see customers pay £150 extra for their broadband deal

Our latest research shows that broadband customers could be charged as much as £150 more than they expected over the course of their contract thanks to two years of eye-watering inflation-linked price hikes.

We’re launching a campaign calling for an end to unpredictable hikes that we believe unfairly penalise consumers, make it hard for people to predict how much their broadband and mobile contracts will cost and dampen price competition in the telecoms market.

We’re calling for broadband and mobile providers to do the right thing and stop this practice, and for the telecoms regulator, Ofcom, to ban it altogether.

We're demanding big broadband and mobile phone providers drop hikes buried in the terms and conditions. Agree? Sign the petition.

Broadband providers’ mid-contract price hikes

Many of the big broadband firms, including BT, EE, Plusnet, Shell Energy, TalkTalk, Virgin Media and Vodafone now raise prices every April in line with inflation plus 3% to 3.9%.

The majority use the consumer price index (CPI) as published in January as the basis for their increases. However, starting next year, Virgin Media will use the retail price index (RPI) as published in February – RPI is typically higher than CPI. The Office for National Statistics (ONS) discourages the use of RPI, saying it’s not a good measure of inflation and is likely to overstate it.

These increases can even be applied to customers who are within their minimum contract period, leaving them to accept them, or pay a punitive exit fee that could exceed £200.

Broadband contracts typically last 18 or 24 months, making it almost impossible to predict what the price rises will be when you sign up. Plus many customers stay with the same provider after their contracts end, meaning costs will continue to spiral year after year.

Looking for a new broadband provider? Our experts round up the best broadband deals to ensure you get the best for your budget.

How much could broadband prices increase in 2024?

We’ve used figures from our survey of over 3,000 broadband customers and analysis of Bank of England inflation forecasts to predict how much affected customers could see their bills increase in 2024.

Providers that base their price rise on CPI are likely to raise prices by more than 8% in April 2024. For many, this will come on the back of price rises of over 14% earlier this year.

Meanwhile Virgin Media will be using inflation-based price rises for the first time, but its customers are likely to see the largest jump in costs – its customers could see hikes of over 10% thanks to its RPI-based price rises.

Find out more about smaller localised full fibre broadband deals using our guide to regional broadband providers.

The impact over the course of a contract

We’ve also explored how much extra the inflation-linked price increases of 2023 and 2023 might cost a customer who took out a deal in January 2023. 

Again using the average amounts paid by customers in our survey, we analysed how much more a deal might cost as a result of inflation-linked mid-contract price rises when compared to the original cost at the beginning of a contract. 

We’ve found that some customers could pay an additional £150 over the course of their contract thanks to unpredictable inflation-linked price rises. Our analysis showed that BT and EE broadband customers were likely to see the largest average price hikes when we looked at contract length.

We’ve excluded Shell Energy Broadband from our table because it did not apply its 2023 inflation-linked price hikes to customers who joined from January to March 2023. However, it did apply a 12.5% inflation-linked price rise to some customers (this was lower than the 13.5% its contract terms allowed for). Our research shows that a Shell Energy Broadband customer paying the average amount in our survey would pay an extra £45.27 between spring 2023 and spring 2024 as a result of this price increase. 

Virgin Media did not use inflation-linked price hikes in 2023, though it did increase the amount some of its customers pay by an average of 13.8%. Our research shows that a Virgin Media customer paying the average amount would pay an extra £67.07 between spring 2023 and spring 2024 as a result of the ad hoc price rise - however, affected customers were given the right to exit when notified. Virgin Media told us customers who signed up after November 2022 will not have been subject to its ad hoc price rise in spring 2023, and those on a fixed-price promotional deal (like those offered to new customers) would not have seen the price hike take effect until after their promotional deal ended.

We've asked telecoms regulator Ofcom to investigate Virgin Media's broadband terms and conditions, as we're concerned they could unfairly disadvantage its customers.

Unpredictable mid-contract price rises must be banned

We believe it is unfair - and in some cases, potentially unlawful - for consumers to be signed up to deals that do not give them certainty about how much they can expect to pay over the course of their contract, especially given exit fees can be punitive. That’s why we’re launching our campaign: ‘The Right to Connect’. We're calling for clearer and fairer pricing for telecoms customers and an end to unpredictable mid-contract price hikes. 

It’s a position that’s backed by consumers – in separate research we’ve found that around 8 in 10 believe that mid-contract price hikes are always unfair, and people overwhelmingly value pricing certainty for broadband contracts.

Ofcom is currently reviewing inflation-linked, mid-contract price rises amid concerns that they do not give consumers sufficient certainty and clarity about what they can expect to pay. It is due to publish its consultation on this issue in December. 

Providers should do the right thing by stopping this practice ahead of Ofcom’s final decision, to ensure that customers are not impacted by price rises next April. In the longer term, Ofcom should ban these unpredictable mid-contract price hikes as they unfairly penalise consumers. 

Rocio Concha, Which? Director of Policy and Advocacy, said: ‘Affordable connectivity isn’t nice to have, it’s essential for everything from work, school and socialising to online banking. This is why it’s outrageous that unpredictable mid-contract price hikes have been allowed to continue in the telecoms industry for this long. 

‘During an unprecedented cost of living crisis, consumers should not have to pay as much as £150 extra over the course of their contract due to two rounds of mid-contract price hikes. No-one should be playing guessing games to budget for the cost of an essential household bill. 

‘Which? is calling on all providers to stop this practice, bring certainty to consumer bills and cancel the 2024 price hikes. More widely, Ofcom should use their review to ban uncertain mid-contract price hikes as they are punitive for consumers and discourage price competition in the telecoms market.’

Our research

All of our calculations are based on the average amounts paid by customers in our December 2022/January 2023 survey of a nationally representative sample of 3,897 adults aged 18+ who had a contract for a home broadband service (including broadband and phone).

Our forecasting is based on a hypothetical customer paying the average amount when the March 31/April 1 price rises were instituted in 2023.

The estimate of CPI at 4.5% in January 2024 is a mid-estimate based on the Bank of England inflation quarterly forecasts in the August MPC Report (4.9% in Q4 2023 and 4.3% in Q1 2024). The Bank of England does not routinely forecast RPI inflation. Instead, the estimate of RPI at 6.5% is based on the percentage point differences between CPI and RPI over the past year according to the ONS inflation tables released monthly. This difference is also reflective of the average of external forecasts tracked by The Treasury, and the CPI and RPI forecasts from the Office for Budget Responsibility published in March 2023.

Read more:

• The Right to Connect: Ensuring the price you see is the price you pay.
• The benefit of certainty: Valuing consumer preferences for fixed price broadband contracts.
  

How the providers responded

BT (also representing EE and Plusnet) told us ‘We understand that price rises are never wanted nor welcomed but recognise them as a necessary thing to do given the rising costs our business faces.

‘Our price rises are annual, contracted and transparent and we make this clear when customers sign up or renew their contract. With the average price increase just above £1 per week in 2023, and some of our customers exempt from the rise– we’re also doing all we can to ensure our services are accessible to the widest group of customers possible through our market leading social tariffs.’

Shell Energy Broadband provided clarifying comments, but declined to provide a wider comment.

TalkTalk told us ‘The regulated CPI-linked price rise in April 2023 was preventable. In order to prevent the same thing happening next April, we are again calling on Ofcom to act and reduce the wholesale increases that lead to these price rises. These are exceptional circumstances, and families and businesses across the UK need the regulator to act.”

Virgin Media told us ‘We are always clear and transparent with customers about any price increases. We wrote directly to all customers who received a price rise this year to notify them of their exact increase, and gave them the right to cancel without penalty within 30 days if they wished. 

'While we know that price changes are never welcome, against a backdrop of rising costs, increased usage and continued investment, we have openly and directly set out to customers that we are introducing inflation-linked price changes from April next year. This widely used format will provide more certainty on when and how any future increases will occur while fuelling the investment required to ensure we keep providing the fast and reliable connectivity our customers rely on.'

Virgin Media also strongly refutes Which?’s claims that Virgin Media’s contracts could be unlawful.

Vodafone declined to comment.

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