Where are OFCOM in the £4 per month Broadband Price Hikes?

frankst237

A good few months ago OFCOM trumpeted their success in making Broadband and Mobile phone providers explain much more clearly (in simple £ numbers) their planned price rises each April.  Sounds like a good idea instead of the old 3.9% plus whatever RPI increase is at the time.

What seems to have happened is that many (I won't say all) the providers are now adding £4 per month price rises to their monthly contract rates.  £4 doesn't sound much but it does mean £48 per year on (let's say) a £25 per month simple, fairly low cost broadband tariff.  This equates to 11.2% overall.  Not clever when inflation is running at 3-4%.

The change (as was forecast my many) has had a dramatic, negative impact on consumers just to feed the profits of the suppliers.

Where are OFCOM in this?  Is anyone going to say "OOPS, we got that badly wrong and we'll have another think" or is it simply just swept under the carpet because it would impact their annual reviews?  Is anyone taking the providers to task on this?

Just having a think about this when looking at new contract prices - and deciding I don't like the outcome!

Frank

iniltous

As you say , this is simply the logical conclusion of the badly thought out rule they imposed , Ofcom can’t dictate what price a Communication Provider charges , the complaint was never about the price , it was about clarity, the problem as far as Ofcom were concerned was how can a customer know what the price will be if the annual increase is based on a formula that itself is based on inflation, that obviously cannot be known in advance, the ‘answer’ was the replacement of a variable with a known figure (that way no one can say I didn’t know what the increase would be ) the fact that £3 or £4 annual increase on a £30/month is likely to be way more than inflation + 3% or whatever , and isn’t progressive in that someone on 40Mb paying an extra £4 in effect gets a worse deal compared to someone taking 2Gb for £50 but also gets a £4 increase , is irrelevant.
Ofcom can’t impose prices , they also can’t impose no increase during the minimum term , if you look , many companies have both , a deal that increases annually or a fixed price , but the fixed price is more expensive at the beginning of the term (and possibly throughout the entire term ) 
TBH , I don’t blame Ofcom on this one , I’d blame the idiots that pushed for the old system to be replaced , st least that was based on inflation.

frankst237

Hi iniltous,

Yes I can't argue with most of your sentiments and logic which is more than I can say for my calculations in my original post. To quote my words from the original post  "OOPS, we got that badly wrong" - my calculation is incorrect where a £4 increase on a £25 payment should be 16%, not 11.2%.  Brain fade and a worn out abacus at 70+ years old!!

Perhaps the providers could say something like "£4 or inflation plus 3.9% WHICHEVER IS THE LOWER FIGURE" which could make it fairer all round.

Someone paying £25 per month and getting hit with a 16% rise isn't irrelevant to them as individuals, especially if on minimum wage or a pension where even with the triple lock, the rise is going to be 4% in April next year.  With Broadband and Smartphones becoming even more of a necessity for everyone, this sort of price rise is adding to the problem of Digital Exclusion for elderlies and anyone on a low income who have very little chance of a juicy bonus and champagne in the boardroom to celebrate another bumper year of profits.

I am probably getting 2 topics entangled here but it just made me gasp when I saw the new pricing structure for Virgin Media broadband (as an example).

I have managed to stay off the topic of "(the minimum level of) customer service (that we can get away with)" which seems to be the mantra of big companies nowadays so I'll quit while I am behind.

Frank

Ectophile

frankst237 said:

Perhaps the providers could say something like "£4 or inflation plus 3.9% WHICHEVER IS THE LOWER FIGURE" which could make it fairer all round.

The providers were specifically banned from doing that.  The customers won't know what the rate of inflation will be next year.  So there's no clarity on the pricing.

Instead, providers have two options:

• Set out precicely what the price rises will be every year.
• Increase the prices by whatever they like each year, but the customer has the option to cancel the contract, if they think the price rise is too high.

Neil_Jones

Providers exist that will honour the starting point for the length of the contract.  However you will usually pay more from the outset which may work out more expensive than £4 a month extra coming somewhere down the line would have done.

The point of the Ofcom decision was to make it clearer what your price increase will be, which wasn't possible under a 3.9% + CPI thing, because CPI was based on a figure in the future that nobody knew until it came to it, so you can't work out you were going to have a 6.6% increase until after the event.

frankst237

Everyone who replied - yes I do accept what you say but from my point of view it doesn't make it any better.  In today's MSE email here is a link to an article which explains in better words then me what is now going on - and maybe OFCOM do carry some of the responsibility.

https://www.moneysavingexpert.com/news/2025/10/o2-price-rise/

Frank

iniltous

TBH , that article isn’t really the same thing at all , the complaint against O2 (mobile not broadband) is not that the annual increase is taking place , but that when customers signed up they were told the increase would be £1.80 , but O2 have arbitrarily changed that to £2.50.
The article does say that because this is a change to the customers detriment, they can exercise their right to reject the new increase and leave penalty free , that actually how the previous system worked , price went up , if you didn’t like it you could move ….once it’s written into the T&C’s you can’t argue you didn’t accept the increase…O2 changed the amount of the increase , hence the article , it’s not that the price went up , if it had remained at £1.80 clearly the article wouldn’t have been written 

brewerdave

O2 (mobiles) appear to have decided to follow the Sky approach - put the price up by £x pm ,whatever they want ,with the customer release clause ,making the assumption that they will gain far more than they lose ,thru customer inaction/inertia.
Odds on ,they will all adopt the jolly wheeze for new broadband or mobile contracts !!

JSmithy45AD

iniltous said:

TBH , that article isn’t really the same thing at all , the complaint against O2 (mobile not broadband) is not that the annual increase is taking place , but that when customers signed up they were told the increase would be £1.80 , but O2 have arbitrarily changed that to £2.50.
The article does say that because this is a change to the customers detriment, they can exercise their right to reject the new increase and leave penalty free , that actually how the previous system worked , price went up , if you didn’t like it you could move ….once it’s written into the T&C’s you can’t argue you didn’t accept the increase…O2 changed the amount of the increase , hence the article , it’s not that the price went up , if it had remained at £1.80 clearly the article wouldn’t have been written 

I wonder what O2's response would be to a customer who insists that they're not accepting the change in terms and want to keep to the originally agreed increase?

iniltous

JSmithy45AD said:

iniltous said:

TBH , that article isn’t really the same thing at all , the complaint against O2 (mobile not broadband) is not that the annual increase is taking place , but that when customers signed up they were told the increase would be £1.80 , but O2 have arbitrarily changed that to £2.50.
The article does say that because this is a change to the customers detriment, they can exercise their right to reject the new increase and leave penalty free , that actually how the previous system worked , price went up , if you didn’t like it you could move ….once it’s written into the T&C’s you can’t argue you didn’t accept the increase…O2 changed the amount of the increase , hence the article , it’s not that the price went up , if it had remained at £1.80 clearly the article wouldn’t have been written 

I wonder what O2's response would be to a customer who insists that they're not accepting the change in terms and want to keep to the originally agreed increase?

As far as I understand it , there are only two options, you reject the increase as it’s not specified in the original contract ( which was £1.80 not £2.50) and you exercise your right to leave penalty free, or you accept the new terms and conditions ( doing nothing is considered accepting the new T&C’s ) , there isn’t a third option to remain bound by the original terms and stay with the £1.80 increase instead if the £2.50 .
TBH , if that was an option it would make the £2.50 increase pointless, those that were aware and indicated their wish to keep the £1.80 increase and reject the £2.50  increase would do so , and then the relevant authorities would no doubt say this is clearly discriminatory and unfair to those that were unaware of this option or didn’t respond in the necessary timeframe , so it effectively would be struck down legally , you can’t treat well informed customers better than those less well informed, the only way that would work would be to make it an opt in increase (rather than what you suggest as an opt out ) and no one in their right mind would chose to opt in.
TBH , some providers have  already increased the ‘yearly increase’ from £3 to £4 a month , but they did so in a way that isn’t deemed to be to the customers detriment, they just advise the change way in advance of it’s implementation so no current contracted customers are affected, only   new or re-contracted  customers face the new price increase.
O2 presumably have calculated that they will lose less from customers that quit than the extra revenue gained from the extra 70p a month, they could have simply said this increase from £1.80 to £2.50 will take place in 2027 instead in 2026 that way at renewal you already knew it’s the higher amount .

iniltous

brewerdave said:

O2 (mobiles) appear to have decided to follow the Sky approach - put the price up by £x pm ,whatever they want ,with the customer release clause ,making the assumption that they will gain far more than they lose ,thru customer inaction/inertia.
Odds on ,they will all adopt the jolly wheeze for new broadband or mobile contracts !!

Not sure this is entirely true , if they followed Sky’s example they wouldn’t have swapped a published £1.80 increase to a published £2.50 increase , that’s just a hostage to fortune, they would have just said ( like  Sky do ) ‘we will advise in the month before what the yearly increase is , ( therefore not a fixed amount ) and if you don’t accept this increase you can leave .

O2 are not saying that at all , they are saying going forward it’s £2.50 /month a year more applied from whatever month they annually increase their prices .

Sky get away with their method because they challenge Ofcom that their TV business isn’t covered by the rules for broadband, and mobile companies which state any increase has to be in the T&C’s at sign up , and be in monetary terms , not an unknown arbitrary figure either inflation based or simply  invented to aid their balance sheet .