How can broadband providers justify annual price increases ?

Parkhall

I have been shopping around for broadband providers and have noticed that a lot of them state an annual price increase of about 15%. eg. BT £4 per month each successive year.

How can they justify that amount given that UK inflation rate is much lower?

Ayr_Rage

Well, the great MSE himself campaigned against RPI/CPI + X.X% for years and now the chickens of £Y.YY per annum are coming home to roost as inflation is getting back into the normal range.

iniltous

presumably you have never looked at this before even though it’s hardly a new thing , providers used to typically say prices would increase by CPI inflation plus 3.9% annually, the consumer champions of this world said this was unfair on consumers as inflation cannot be predicted so increases were unknown when the contract taken , so they made providers change to staying what the increases would be in advance and in plain £££’s and pence terms , most settling on £3 to £4 a year increases, clearly on a £30 price that’s more than the old system, but it’s what the consumer champions demanded…..

as far as how do they justify this increase , consider how much time the average household now spends online , streaming programs, social media, emails , browsing etc , the underlying network delivering this needs to increased year on year to satisfy the demand, this has to be paid for , what’s more compared to other utilities, water , gas , electricity , the price is a relative bargain in comparison…..if all you want is a cheap , occasional device for the odd call and odd email , get a PAYG mobile phone .

Parkhall

It's absurd. I estimate that my BT bill would double within about 6 years.

Parkhall

https://forums.moneysavingexpert.com/discussion/comment/81884679#Comment_81884679

compared to other utilities

Do other utilities increase by that much per annum ?

iniltous

No it would not , at each contract renewal you negotiate a discount, I’ll give a real world example, just over two years ago , I paid £30 (telephone and broadband with BT ) the price went up twice £3 and £3 to £36 by the end of 24 months , I called when the renewal was due (a couple of months ago ) and got £30 a month , so back to where I stated, but I know two £4 increases will be applied in March 26 March 27 , but have every expectation that in November 27 , I’ll negotiate a price cheaper than £38, if not I’ll leave for a different provider if a competitive price isn’t on offer .

Looking at your apparent history and the fact you are on a SMPF product not sold for donkeys years and presumably hadn’t noticed the price was ludicrous but still hadn’t shopped around , then someone like that will be disadvantaged, the solution is obvious though , negotiate or swap providers to keep the price attractive, odd that after all these years price is so important as it clearly wasn’t that important up to this point , as at a conservative estimate you were paying 50-100% more than necessary by having phone and broadband separate instead of one supplier for both services.

Parkhall

Thanks. That's interesting and genuinely good to know about negotiating back to original price, but of course most of us tend to just let things slide upwards.

iniltous

I’m not sure ‘most’ do not negotiate or change , the regulator stated intention is for consumers to swap providers to keep prices competitive….if there are some that simply pay whatever is asked , then although unfortunate, that’s on them , no one else , and hardly unique to telecommunications.

littleboo

https://forums.moneysavingexpert.com/discussion/comment/81884693#Comment_81884693

Well water for a start, and you can't change provider

Parkhall

Living in a very exposed westerly region where lines get broken every year I tend to have an irrational belief that BT will be most reliable for fixing breaks. I know that Openreach are no longer part of BT but would all providers get a similar level of service from Openreach?

iniltous

https://forums.moneysavingexpert.com/discussion/comment/81884693#Comment_81884693

What ??, you seriously suggesting other utilities are priced more fairly ?

I pay 10x the cost of my broadband for ‘energy’ every month ( £300 compared to £30), my water bill is £66 a month , not that long ago the yearly cost was £140 , it’s farcical to suggest that other utilities are reasonable in comparison to broadband, 35 years ago , when I first had my own place (and paid my own bills ) I recon my phone bill (just phone , no such thing as broadband back then ) was around £20 , it’s now £30 including broadband…..my rates were £600, now (called council team) is £3300, electricity and gas £50 , now £300…other utilities don’t say your price will go up by £3 or £4 a year , it’s much more onerous than that , they charge whatever the market will stand