A word of warning about taking up long term Broadband offers

LeesArt

Today I have heard two ads for Broadband at eye watering prices on the radio, but what was worse was the fast speaking terms at the end.

TalkTalk will be adding CPI+3.7% in March for their 2 year contract 

EE will be adding CPI+3.9% in March for their 2 year contract 

According to Radio4 CPI is forecast to be between 12% and 15% by Autumn, maybe even worse.

They do not expect inflation to drop in 2023 because of wage demands and the continued pressures on the Pound, Energy and Food basics scarcity.

So you could be facing an 18% hike

I heard products advertised at £29.99 to £32.99 and they were both 24 month contracts, so £720 "expected" for the 24 months but in reality a lot more.

So from the end of March 2023 you could be paying £35.67 and then from March 2024 £42.42

This means that if you signed up to a contract in July 2022 you might pay 9 x £30, 12 x £35.67 and 3x £42.42, so £825 for the term of the contract rather than £720. 
 
The amounts may vary, they may be better or they may be far worse, all I am saying here is READ THE SMALL PRINT and let companies know that you will not be taking up the offer because of the inflation clauses.

Neil_Jones

Yes this is normal practice.

Almost all providers have a CPI+3.x% increase baked in.  Unfortunately if you want broadband that's what you agree to.

johnbhoy70

 Most adverts selling you a super duper deal speed up to 100 miles an hour near the end.That's as old as time tbh.

Also, as above, i'm 3.9% plus CPI with BT and i pretty sure everyone is or will be on a new contract. Just cost this in at the start of it and be aware of. If you mention this on a call when trying to negotiate a new rate they might do something for you. Plus, goes without saying, the smaller you can get the price per month the less the damage will be later.

iniltous

If a company can offer a guarantee of no price increase over the 24 month term , given that inflation is predicted to be in double figures , means that they must be overcharging at the beginning of the contract to build up sufficient ‘credit’ to offset the loss they would suffer  by the time inflation has affected their own costs at the end of the term….it’s beyond naive to think any company can guarantee a price when inflation is raging , if they haven’t already loaded the price at the start

Neil49

My BT contract came up for renewal last month. I phoned to discuss the price and other options including me switching to Vodafone. They brought there monthly payments down quite a bit but then I threw in the impact of inflation over the next 24 months (the term of the contract). They reduced the amount further and now, even with increases at 15% per annum I'll be paying no more than I do now in 2 years time. 

LeesArt

Neil_Jones said:

Yes this is normal practice.

Almost all providers have a CPI+3.x% increase baked in.  Unfortunately if you want broadband that's what you agree to.

Normal for some and not for others, it becomes the norm when sheep agree to it without protect.

The cost of Broadband is huge these days, the market is dysfunctional with barely any competition and it needs to be broken up by the CMA, sadly they will never do that.

I think providers should not be allowed to offer Mobile and broadband, so mobile companies would have a reason to compete with broadband.

I think BT needs to be broken up, first the Wholesale side and then it needs to divest itself from EE and Plusnet.

OFGEM needs to encourage newcomers to the market and give them a leg up with lower cost wholesale perhaps.

LeesArt

iniltous said:

If a company can offer a guarantee of no price increase over the 24 month term , given that inflation is predicted to be in double figures , means that they must be overcharging at the beginning of the contract to build up sufficient ‘credit’ to offset the loss they would suffer  by the time inflation has affected their own costs at the end of the term….it’s beyond naive to think any company can guarantee a price when inflation is raging , if they haven’t already loaded the price at the start

I don't think there is any REAL cost, the infrastructure is in place and only some rural areas need investment, the market is not competing on ADSL to force people like cattle into Fibre.

Consider we had a market where the famous MSE Sky deal for a year was under £6, where TalkTalk would offer £24 for a year and chuck in loads of kit.  Where EE was also competing heavily.

Even after that Sky offered £50 a year on two quarters and £100 a year on the other two.

So what changed?

A combination of the CMA failing to stop BT buying EE and changes in how BT Wholesale operates.

Right now it seems to operate like a cartel and BT Wholesale seems to be at the core of that.

LeesArt

Neil49 said:

My BT contract came up for renewal last month. I phoned to discuss the price and other options including me switching to Vodafone. They brought there monthly payments down quite a bit but then I threw in the impact of inflation over the next 24 months (the term of the contract). They reduced the amount further and now, even with increases at 15% per annum I'll be paying no more than I do now in 2 years time. 

That is interesting Neil, how much do you pay now and how long is your contract with BT?

littleboo

LeesArt said:

Neil_Jones said:

Yes this is normal practice.

Almost all providers have a CPI+3.x% increase baked in.  Unfortunately if you want broadband that's what you agree to.

Normal for some and not for others, it becomes the norm when sheep agree to it without protect.

The cost of Broadband is huge these days, the market is dysfunctional with barely any competition and it needs to be broken up by the CMA, sadly they will never do that.

I think providers should not be allowed to offer Mobile and broadband, so mobile companies would have a reason to compete with broadband.

I think BT needs to be broken up, first the Wholesale side and then it needs to divest itself from EE and Plusnet.

OFGEM needs to encourage newcomers to the market and give them a leg up with lower cost wholesale perhaps.

that's a very confused post!

shiraz99

Clearly the OP has some sort of agenda.

LeesArt

shiraz99 said:

Clearly the OP has some sort of agenda.

Maybe they are a communist
Maybe they are a fascist 
Maybe they are a insurgent
Maybe they are a deviant

Take your tin hat off

I have no agenda

I created the original post after hearing ads on radio and shared the warning

The rest is just observations 

It is like energy, people have been complaining about their tactics for years, suddenly now everyone is noticing because we have a cost of living crisis and they are looking to cut back on everything.