Broadband mid-contract price increases – what’s changed?
Mid-contract price increases haven’t been banned, but they are being more tightly regulated. Here’s what you need to know.
Following recent media coverage of mid-contract price increases, you’d be forgiven for assuming this unwelcome practice had now been banned.
It’s a distinctly unpleasant sensation to discover your ISP is increasing your direct debit, midway through a fixed-term (and supposedly fixed-price) broadband contract.
These mid-contract price increases have always been permitted – and despite suggestions to the contrary, their use will continue.
However, significant changes to telecommunications contracts are being introduced this month by industry regulator Ofcom.
Here’s what you need to know.
The rules they are a’changing
Five years ago, the bigger ISPs tended to announce annual price increases of a few percentage points.
This subsequently increased to four per cent plus the annual rate of inflation.
As the UK economy lurched from one crisis to another, mid-contract broadband price rises of up to 14 per cent became unexpected and unwelcome in equal measure.
Some ISPs used CPI inflation data while others relied on the differing RPI figure, with little clarity on which measure of inflation had been used – let alone how it affected billing.
Because these increases tended to be buried within reams of small print few of us ever fully read, many consumers were unaware of these looming annual price hikes.
Ofcom’s own research suggested most consumers didn’t know what CPI and RPI inflation were, and only one in six broadband customers knew their price rises were index-linked at all.
Indeed, many people don’t even know they may be able to leave a broadband contract early.
This was clearly unfair, so following a protracted period of consultation, Ofcom’s rules have now changed.
As of the 17th of January, ISPs are no longer allowed to increase broadband fees by an inflation-linked amount, a self-determined percentage or an amalgam of the two.
However, they are still allowed to raise monthly subscriptions – providing three rules are met:
- Any mid-contract price increases must be calculated in pounds and pence before the customer enters into the contract.
- Scheduled future increases must be clearly conveyed to the customer when they sign up, with unambiguous notice of when higher prices will come into effect.
- Increases also need to be prominently highlighted in any sales calls, in-store discussions, advertising or promotional materials relating to new broadband contracts.
You might have noticed broadband TV ads already sporting on-screen messages along the lines of “£3 increase from April 2025”, ensuring ISPs comply with the new statutory requirements.
You don’t need a maths degree to recognise that a one-year £47-per-month broadband contract with a £3 post-April increase will end up costing you £50.
This is the simplicity industry regulator Ofcom was aiming to achieve all along.
Have ISPs supported these changes?
Not universally.
Some broadband providers complained that the rules only apply to domestic ISPs rather than wholesale providers like Openreach,though the latter never imposed inflation-plus price rises in the first place.
Others are introducing blanket mid-term price hikes on all their contracts, meaning customers on cheaper tariffs will pay a proportionally higher increase than those on premium packages.
There’s also nothing to stop ISPs raising monthly broadband costs in an attempt to boost profits, hedging against future inflation eating into their returns.
Ofcom’s changes are unlikely to make broadband cheaper, but they will make its pricing more transparent – which is still good news for consumers.
It’s also worth noting some altnet broadband providers haven’t increased their monthly costs for years – let alone hiking them in the middle of customer contracts…
