MSE News: Inflation-linked broadband, mobile and TV price hikes to be banned from next year

MSE_Chris

Broadband, mobile and pay TV firms will no longer be able to hit customers with inflation-linked price hikes mid-contract from January 2025, regulator Ofcom has confirmed. But, as MoneySavingExpert.com (MSE) founder Martin Lewis has warned, the new rules will still allow for above-inflation price rises.

Inflation-linked broadband, mobile and TV price hikes to be banned from next year

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elsien

I’m sorry, but that’s a misleading Clickbait headline. 

Mid term price rises are still allowed as long as it’s made clear before the contract starts. Your headline makes it sound like they’re banned full stop.  Which is just not true. 

tghe-retford

All that's happened is that they've factored in at least 10% increases every year as a monthly price increase instead of the current CPI+3.9% which will unless things go very bad, be below 10%. And if inflation does go high, they'll just increase it to £4-5 a month extra and make that the new normal.

Companies have used this opportunity to allow bigger yearly increases in prices well above what they could do previously and well above inflation. The danger with this is that in a decade, we have less competition as networks and ISPs consolidate after fibre build-out, companies increase prices in lock-step, the Internet becomes essential to function in society and we end up with some of the most expensive Internet in the world alongside the USA and Argentina.

Kim_13

Agree with both of these posts.

People are going to sign up for inflation linked this year thinking they can just say “that’s banned” when they get April’s bill. There is no get out of jail free card so you have to be happy with whatever you agree to for the duration.

I despise inflation linked increases but all this has done is made the situation worse. I’m very much of the belief that if a provider requires you to commit for x contract period, then they should also be prepared to commit (by not increasing the price at all for that same period.) In-contract price rises with no right to exit just encourage longer contracts being required, as there’s no downside for the company at all. Longer contracts aren’t good for consumers who envisage their needs/circumstances could change, but they have little option but to agree regardless (pay over the odds until they can commit, or use a mobile data solution.) 

housebuyer143

Another case of overregulation. Utilities and now this 😡.
Now they have punished societies poorest again by forcing huge increases on them. Have a £6 SIM? That's a 25% increase each year, while a someone who can afford a £60 phone has a significantly smaller one (2.5% if my maths brain is working). How is this remotely fair!
Ok so one year we had large increases because inflation was high, but now we have unfair and huge rises shouldered by the people paying the least, every year 😑

And then I agree, as they all merge they can basically increase it to whatever they want because people need internet. 

molerat

housebuyer143 said:

Another case of over regulation. 

IMO the exact opposite applies.  The regulator tells them what they can't do but doesn't specify what they can so they manage to turn it to their advantage.  My BB provider is offering me a new contract at £1 less than I am currently paying but I have worked out that the new contract will overall cost me more with the new style increase next year.

michaels

Martin is so gullible - he has given the providers an excuse to increase their prices by even more than they were before - nice one.

It would be so easy to just impose a fixed price which would effectively include any planned price increases.  The supply companies could hedge against inflation if they were concerned about it.

JSmithy45AD

michaels said:

Martin is so gullible - he has given the providers an excuse to increase their prices by even more than they were before - nice one.

It would be so easy to just impose a fixed price which would effectively include any planned price increases.  The supply companies could hedge against inflation if they were concerned about it.

Do you really think the companies come on here looking for advice from Matin Lewis? Wow...

Kim_13

Wasn't Martin ideally looking for a total ban on price rises but pragmatically, accepting that Ofcom wouldn't get that past the industry, suggesting that the price rise should be the lower of an inflation based rise or a pre stated pounds and pence rise for each year? That wouldn't have made the situation worse, it would only have introduced a safeguard against excessive inflation.

It isn't inflation based rises that are the problem per se, but the + x% part that also bakes in future inflation. No responsible person should support such a formula and Martin isn't to blame if the regulator is too weak to do anything to benefit the consumer. If they want to use inflation based rises, they should be prepared to make it inflation only (CPI, as that might be all state pensioners get) accepting that they might have to cut the price from time to time (but the general trend is still in their favour.)

Molerat is quite right- had the regulator provided that increases had to be stated in pence (intending that the in contract price rise was less than £1 per month) Vodafone et al would still have said 300p. 

People will still pay more than they thought this way - pension age parent thought that it meant £3 per year rise, when it's effectively a £36 a year rise (or somewhere in between depending on how many months between the price rise and the point at which the contract may be exited.)

forgotmyname

Any companies around that fix the price when you take out a new contract?

JSmithy45AD

forgotmyname said:

Any companies around that fix the price when you take out a new contract?

https://www.broadband.co.uk/broadband/help/fixed-price-broadband-deals