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Tuesday, November 29, 2022

Inflation-busting rises for mobiles and broadband kick in today

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Most of the big providers are pushing through “mid-contract” rises of up to 11.7 per cent today or tomorrow as the cap on energy bills rises by 54 per cent.

It is estimated that the extra “inflation plus” charges will cost consumers more than £1 billion a year in total.

However, the exact scale of the rises will vary, depending on which measure of inflation is used as the benchmark, and when the customer signed up to their plan. Critics have said the increases are unfair and baffling as customers have no way of predicting what the rate of inflation will be a year’s time when they sign up.

The biggest increase is being imposed by 02, the only company to link its hikes to the retail price index last month, when it stood at 7.8 per cent.

02 adds another 3.9 per cent to the RPI taking the total increase to 11.7 per cent for customers who joined after March 25 last year.

The increases from BT, Plusnet Vodafone and EE are calculated from December’s consumer prices index of 5.4 per cent but again adding 3.9 per cent on top making 9.3 per cent in total.

A Vodafone broadband customer signed up after February 2 last year paying £40 a month will be charged an extra £3.72.

A recently joined BT broadband customer on a Superfast Fibre Halo 1 plan will see their monthly payment go up from £55.70 to £58.21.

In many cases customers will not be able to escape the increases as they would face expensive penalty fees to end 18 or 24-month contracts early.

Consumer groups have called on the industry regulator Ofcom to clamp down on “baked in” annual inflation-plus tariff increases for broadband and mobiles — product that are increasingly seen as an essential utilities just as much as energy or water.

Richard Neudegg, of Uswitch.com, said: “The regulator must tell all telecom providers to let their customers walk away, penalty-free, from contracts that contain these excessive inflationary rises that couldn’t be fully predicted in advance. Simply put — if consumers don’t know, they should be able to go.

“While Ofcom cannot change the dark clouds hovering above our economy, they can act to end the uncertainty and lack of transparency caused by allowing price rises to be hitched to inflation.”

O2 said: “For most customers the price increase only applies to the airtime part of their bill and with our most popular tariffs costing from as little as 33p per day for superfast data with unlimited minutes and texts.”

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