Mid-contract telco price hikes must end, Ofcom told UK telcos are facing complaints about mid-contract price rises, with 87 percent of consumers saying they should be allowed to simply walk away with no penalty if their provider hikes charges this way. Uswitch and Which? are also calling on Ofcom to end mid-contract hikes altogether. Millions of customers on broadband and …
It is confusing, but this is how EE explained their 2023 price increase:
” This means that the majority of our customers will see a price increase of 14.4% (which is 10.5% plus 3.9%)”
Naturally, mobile phone bills contribute to the various inflation indexes so beloved of the BoE and politicians, so expect the, to punish us for this increase(*) if CPI/RPI aren’t doing what they expect them to be doing.
(*) and others like the increase in used car values caused by both the high prices of EVs and the increased competition (ie. WeBuyAnyCar, Motorway, Cazoo etc.) in the sector.
Interestingly, not sure where increases in M365 and iCloud subscriptions get factored in, but we can be sure they are…
On top.. 1.039*(50*1.105) = £57.4
It is absolutely about increasing profit and not related to cost of business increase. There’s a compound element to it - and you can best believe that the average wage increase at $telco isn’t even tracking those %ages and certainly not in absolute terms.
There are some providers who are stating ‘this is the fixed price for the duration of the contract’ - so that’s a choice.
Most people don't, Mister Smug.
Taking O2 as an example, if I drop the standard mobile agreement into a Word document, this starts at 26 pages with a 12 point font. However, that refers to but does not include the Pay Monthly Tariff T&Cs, the Consumer Fair Use Policy or the Privacy Policy. Add those in, and we're up to about 58 pages and almost 29,000 words. This doesn't include the policies and details for international roaming, international or premium call rates, the cookie policy, final bill process, or the complaints process. And it doesn't include the data protection policies of the five credit/fraud reference agencies O2 use. The first of those is Transunion, 28 pages, 9,000 words, ICBA to wade through either that and it's linked documents (not included in the 9,000 word count). Two of the others, Experian and Equifax appear to use the same CRAIN text as Transunion - but of course you'd need to read two lots of 8,000-9,000 words to find any differences, as well as the company specific linked documents, for example their data marketing policies, complaints processes, . Cifas and Glow Financial Services have relatively compact 2,200 words in 7 pages each, but again not including links off of those. And of course, as soon as you've found the data "protection" policies of that clutch of companies, you'll find that they pimp your data to anybody who will pay for it, meaning that you'd need to find those companies and read their T&Cs and privacy policies.
And on that basis, I'll assert that you've not read all of the T&Cs.
You don't have to read the T&Cs to see the price increases, as in the UK everyone signing up to a telco contract must have been given a pre-agreement contract information/contract summary, which is a 3-6 pages of normal sized type explicitly laying out the initial cost, the first month cost, future month costs and any price increase. My most recent contract was with iD mobile, on page 3 of the CI/CS they have a section detailing the annual price increases - it could not be clearer.
When it's stated as CPI + x.y%, you only know it will go up. You don't know how much it will go up by. That is the main argument. They're also picking CPI as the basis, which is a nasty thing to do as it's usually higher than other inflation measures.
For me that's not the right argument. The providers say "it's too risky for us to offer 24 month contracts without this term". The answer in my view is simple - instead of putting all that risk onto the consumer don't sell 24 month "fixed" contracts. It should not be legal to offer fixed contracts for longer than you are willing to fix them.
My most recent contract was with iD mobile, on page 3 of the CI/CS they have a section detailing the annual price increases - it could not be clearer.
On page three of a six page document, they finally tell you about the price increase. It could not be clearer? Of course it could - and should.
How about something that says, in fairly large print, on page 1:-
The price for your contract is £14.99 per month.
This will increase every April by the RPI from the previous January plus 3.9%.
For example, if the RPI next January is 7.4%, the increase in April would be 11.3%, which would mean that your monthly payment would increase to £16.68 a month.
This is an illustration - your increased monthly payment could be more or less than that.
You know - a bit like the terms have to be CLEARLY laid out when you take out a loan.
Brilliantly put. And they rely on every word to screw you out of every penny of value they possibly can. Trust me (or don't): I used to work for one. They are a bunch of used car salesmen with billions in budget and huge legal teams.
If that wasn't enough... You need to be a Contract Law Lawyer to understand more than one word in a hundred.
Of course we don't read the T's & C's...
Now if only they were able to make them easy to understand for the layman. They could but won't and prefer to hide behind the small print.
Oh yes they do, I believe it’s a tier just above their ‘Ultimate Oomph, Mega Volt, Strangulation/bondage, <insert other marketing BS name here> level.
A steal at only £159 per month*
* will go up to £1000 a month after three minutes, don’t even think about complaining or trying to get out, we know where you live and it would be really unfortunate if something were to happen to you or your significant other on their way to work, wouldn’t it? And though we dispute Big Jim’s diagnosis as being a dangerous psychopath, he really is anxious to get back to work. Now normally this isn’t something we would want to advertise, but our legal team tell us they we really have to, but we can bury it in the small print and nobody ever reads that, do they?
It varies a bit, but most are "free phone with this £35/month contract or £200 upfront for the phone on a very similar £25/month contract"
So the phone cost is rolled into the contract and hidden, meaning that people continue paying the inflated price after the end of contract unless they actively renegotiate.
Apparently VMO2 charge it separately as a credit purchase, which is far more honest but also enables people to upgrade as soon as the new shiny shiny is out by simply paying off the remainder of their existing phone.
(None of this applies to me as I just purchase phones outright as needed)
So the phone cost is rolled into the contract and hidden, meaning that people continue paying the inflated price after the end of contract unless they actively renegotiate.
That has not been the case in the UK for several years now. CPs are required to notify you when you reach the end of a contract.
"In February 2020, Ofcom introduced rules requiring phone, broadband and pay-TV providers to warn customers when their current contract is ending, and what they could save by signing up to a new deal."
That Ofcom guidance only covers notification of end of contract it doesn’t cover the automatic transfer to a tariff that doesn’t include the phone rental, which I thought there was also an Ofcom requirement, but not located an authorative reference; the report referenced by your link [1], talks about “an increase in engagement…” and notes there are still a significant number of out of contract customers overpaying.
[1] https://www.ofcom.org.uk/__data/assets/pdf_file/0025/228742/helping-customers-get-better-deals-2021.pdf
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This is what you get when CMA is sitting on their hands:
UK telcos are facing complaints about mid-contract price rises, with 87 percent of consumers saying they should be allowed to simply walk away with no penalty if their provider hikes charges this way.
Sure you can "walk away", but where if all companies hiked their prices?
I believe it was called the Zen “lifetime price guarantee”
It was withdrawn for new or existing customers moving to a new plan but continues for those (like me) who do not change their out of contract plans. That said I am sufficiently old in the tooth to know that ultimately it’s likely my plan will be withdrawn by Zen when they decide its uneconomical to maintain and the offered “improved” plan will come without.
Whilst Zen no longer offer the lifetime guarantee, they do guarantee a fixed price for the term of your contract - a much more ethical approach than a lot of the big boys. Its hard work saving money, which is why the big boys with their automated systems have a field day with the busy and apathetic.
I always review my options (your electronic diary is your friend) - as my late father used to observe “we aim to lose by the smallest possible margin” …
"This is what you get when CMA is sitting on their hands"
Yup and OFCOM do NOT have the remit to play market reulator despite their claims
This is the same situation as was in New Zealand. The Ministry of Commerce there documented billions of dollars of market abuse whilst the Ministry of Communictaions claimed all was fine
The plutocracy is demonstrable in the reintroduction of roaming charges more or less simultaneously "Because they could", despite claiming they wouldn't do that.
In a market with real competition, jacking up prices mid contract would result in a mass exodus of customers as at least one company would make a big song and dance about NOT doing it
This is true, except VMO2 do seem to be particularly egregious over this price rise issue. I believe (more than happy to be proved wrong) that they alone will be raising prices by 3.9% over and above the RPI value as of February next year. Whereas other providers will be doing the same but based on the CPI values which are generally lower.
But, as I’m sure other people will conclude, VMO2 are circling the drain as being an ISP so it might be all moot anyway in a couple of years.
Plus we should not forget:
1) It is the MNOs who are wanting 5G and hence increasing their investment in network upgrade.
2) Vodafone are tying the knot with Three, primarily to get even greater economies of scale and better borrowing rates.
3) Financial analysts regard Vodafone and other telcos as “stagnant”, due to the lack of opportunity for market growth and revenue growth. Hence why the telcos will again apply the maximum above inflation increase Ofcom permits, just to show some (fake) revenue growth.
To ensure a rosier output for beancounters, the next rise will be based on CPI, then you add the RPI, and finally a value based on the age of the subscriber (to keep it simple, the age will be used as the % of increase for the cost of the contract).
Of course, the price will be rounded up to the next higher value in £, pennies are so last century.
When customer agrees a contract and a price for a length of time it should be fixed, once that period of time has expired, it should be fixed as a monthly rolling price minus the cost of any handset charges paid for. Mid contract rises are just a rip off, we know, Telco's know it, Ofcom know it (but is too chicken shit and in bed with Telco's) and use the same old excuses of investing in network, if that was so, how come for example, Vermin Media have such bad oversubscription on lines and cannot guarantee a static speed during peak times that match what your paying for ?
Bit off topic but... Spanish news has just informed us that electricity is free until 18:00 tonight. If the Spanish can work that (and they have private electricity companies and they have daily fuel/petrol pricing too), then I think your country's companies are shafting you. It all just feels a bit spiv.
"Trouble is many MNOs now offer 1 month rolling contracts, so can increase rates every month if they so desired…"
I prefer these, because with a contract like that, there is usually no exit fee. If they increase the price, nothing stops me from porting out that month to someone else. They know that, so they have to be a bit careful about randomly changing prices. Compared to a contract that can raise the price and still charge you a fee to get out, a lot of people might avoid leaving because they don't want to pay the fees, then get used to the price increases. In my experience, those that offer monthly contracts tend to be cheaper and more stable than those who lock you in for a long time unless the long-term contract specifically states that it will be one price and the operator may not change it until the contract expires.
This kind of contract clause not only persists current inflation, it actively drives inflation higher.
Given the BoE and government have a desire to keep inflation at 2%, surely it would be sensible to have a legal limit of 2% on in-contract price rises, if you're going to permit them at all. Same for insurance renewal quotes (subject to you not having made a claim in that policy year).
This would be worse for the consumer in tjr long run because longer term contracts would disappear and price hikes would become more regular because the 2% price increase would happen mid contract whether the telco can justify it or not...like train fares...they dont have to hike the fares, but they are capped at inflation, so they just raise to the cap each year arbitrarily. Its one of the reasons train fares are so fucking dumb.
I'm more surprised this is the bigger issue compared to the contractual period "introductory offers" abound in the marketplace with things such as (as an example not of an actual ISP offer) £20 for 12/24 months, then £49 thereafter. VM have been doing this for (maybe) decades now.
To be clear, I don't have an issue with a proper introductory offer such as "3 months free", etc., more when the term is applied to the contractual period.
Fewer ISPs are now offering a flat ongoing price (no problem with some minor inflationary price rises over time) which persists after the contract period.
This is becoming similar to how the car insurance market operate(d) where the following year the auto renewal price was like 50% higher than what you could renew for with the another (or often even the same provider). That was super annoying but at the end of the day was just paperwork....
Doing the same thing for changing ISPs means downtime, needing to swap equipment and hoping OR / VM / other don't mess up the job and leave you disconnected - hardly something that one should look forward to on a regular basis.
Yes of course, it's the profit off of those not bothered to change / unaware of the period while we can vs. the retaining customers...
I'm in the US. In talking with a Spectrum rep (I know better and won't do it again), I asked what the regular price was. They quoted the introductory price. I asked what the price would be once the introductory price wore off. They again told me what the introductory price was.'
If you won't tell me what you're currently charging people for it, then it must be WAY out of my price range!
(They also told me that their service works during power outages (the modem wouldn't have power!), that my DSL couldn't possibly be providing over 20 Mbit (it was, I tested repeatedly), another told me they were the "only option" for ISP in the area (nope, at least 3)...)
"They also told me that their service works during power outages (the modem wouldn't have power!)"
In fairness, the modem is relatively easy to power from a battery, and some modems that you can buy already come with batteries in them for this exact situation. Compared to a system where, even if you powered the modem, it wouldn't work without mains power to some equipment near your house which you can't attach a battery to. This may not be the most important, but if you lose power frequently without losing the cables that provide data, then it could be a selling point. Of course, given the other lies they were telling, maybe that wasn't true.
That's the idea and what they'd like you to believe, of course.
In reality, most next-mile equipment will go down with the mains, maybe a minute or two later (just enough to cover blips). I used to have my networking on a battery that could handle ~24 hours, but the internet would still go out along with the rest of the power. It would cost money to actually provide that kind of reliability, when they could just claim it for free and keep lining the executive pockets.
You have three alternative options for broadband connections?
Now living on the right-hand side of the pond, and not being particularly familiar with the situation in the US, am I right in saying that your situation isn’t typical? From other American colleagues and people I know, they claim that in most places, there is one, sometimes two, suppliers, because of the way the system has been setup, or carved out there. It’s a case of take it and pay what we demand, or leave it!
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The OF…whatever are all pathetic in this country.
OFCOM should never have allowed this situation to develop. It’s not inflation that is the problem. Afterall, I think we understand that they have to pay their bills including wages, but 3.9% on top as an open-ended ongoing commitment. Really? Talk about a license to print money.
OFCOM should also have insisted the ISPs retain one-year contracts. Nothing wrong with two year, three year, even five year if people want to go for it but there has to be the option of one-year as well.
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A good rule of thumb for fair contract law is "would a multi-national corporation buy on those terms"
The answer is, no, no they wouldn't, thus mid-contract rises have to go away.
Which in turn means that we need to have two seperate contracts.
1) A repayment agreement for the handset cost
2) A service contract that lasts a fixed period of time with no price rises.
Start making everything clearer for the consumer, and also, start giving an actual APR for handset loans, so people can compare them against other forms of credit.
If you cast your eyes back to the heady days of circa 2012/13 T-Mobile UK as it was known back then was the first out of the blocks to try the price increase mechanism.
Unfortunately it backfired on them as they hadn't written the RPI increase explicitly into the contract, and as a result clients who argued strongly enough were able to get released from their contract under the material detriment clause.
It's funny how it has evolved, from RPI, to CPI, to CPI+X% - and it is always written in the favour of the operator, and always upwards. If any of the inflationary measures are negative, nope, no reduction in your bill, you just get clumped with the arbitrary percentage increase.
Once one of them tried it, then they all piled in with various increases...guess they all need their new Ferraris. Remember the Vodafone fixed price promise? Subtly ditched for more CPI+X% shenanigans.
And then the broadband providers got wind of it, and then, kerching. Got to pay for the bubbly at the shareholders' meeting somehow, eh?
In a galaxy long long ago, e didn’t have years-long contacts. You paid a monthly at a time and that was it. If you got fed up, you have a month or two notice.
The whole 12 and now 24 month contract thing is a scam and should be outlawed.
And if you’re using the contact to pay for your phone then that should be a separate agreement, outside of the actual service agreement.
These contracts are usually for two years, not long term. The companies should give fixed contracts that last for this short length of time. If they want to put prices up then do it for a new contract. Consumers can then make a choice. The problem is that the regulator ( along with other regulators for energy, water etc.) is not looking after the consumer. They seem to support the companies. Generally the regulators are a waste of money.
But 2 years is long term. Imagine being stuck with a provider that only charges your but doesn't provide much (like 90% of ISPs), and you can't get rid of them.
That was me stuck with Sky which charged me for 80Mbps and delivered under 10Mbps (so haven't delivered anything), and I paid even after I moved out because, otherwise, I should've paid don't know how much.
(and yes, I read their T&C before signing, but everybody's T&C is the same, all of them offer the same lame service on exactly the same conditions)
"Some 85 percent of customers think mid-contract price rises are unfair, and 87 percent believe they should be allowed to ditch their provider if they raise their prices mid-contract, according to a survey conducted for Uswitch by research agency Opinium."
Curious that these both would not be 100%
A few people in these comments have already expressed the view that, if it's in the paperwork, then it must be fair, so that explains the 15%. To some extent, I can agree that if the provider is very clear about the price increases and the customer is aware of the details and circumstances, it can be fair. My bar for this is displaying the information clearly at the time of purchase, not hiding it in a contract between the no hacking our routers clause and the list of trademarks. I still probably wouldn't sign such a contract, but it's a lot better than hiding it.
,,,until their removal is enforced by law.
You know, like mobile phone companies are no longer allowed to have roaming charges around the EU. So that means, if a citizen of the EU travels anywhere in the EU, he still pays the same for his mobile data and calls as he does at home.
And of course, so did we. But now we don't. Another Brexit benefit.
Moved home in Sept 2022, had to sign up for a new contract for phone/broadband with sky because combining 2 homes into one... supposed to be £40/m for 18 months.
6 months later... it's £48... could have cancelled by rejecting the price rise but she who hates change couldn't be bothered.
So now everything is in my name now... once that 18 months is up... sky are getting told where to shove it... especially as the service is utter garbage. 63mb/s speeds for the first few months... now 43mb/s... but is above the min 39mb/s guaranteed speed... so it's a big fuck you from them.
They refuse to accept the dozens of speed test results I've done both on speedtest and fast.com proving real world speeds are barely 31mb/s
Can't wait until FTTH arrives in my street... sadly, that's supposed to be around 2025 at the earliest because I live on the edge of a small town... whilst villages just 1/2m up the road are getting gigabit speeds... I'm stuck with having to throttle my downloads to avoid swamping all the bandwidth just by grabbing steam updates... and the dropouts... every few minutes... 10-30s data pauses for web traffic.
I can't be sure... but it's a bit like I caught virgin doing years ago... throttle traffic for anyone who dares to use a VPN... because turn it off and the pauses go away.
Sadly... I only knew virgin were doing it because I caught one of their staff in a few lies. Sky remain tight lipped on the reasons... and refuse to admit anything or even look into the 33% drop in speeds.
So fuck em... drop em as soon as I can.
Might go back to Zen, at least they fix shit when it breaks and refund/credit customers for their screw ups... they admitted that my old service had been degrading for 11 months until was below min speeds... just never bothered doing anything about it. Ended up with 6 months free in the last 18 months of my service.
"throttle traffic for anyone who dares to use a VPN... because turn it off and the pauses go away."
Ah, that reminds me of PusNet, and their Deep Packet Inspecting routers, the reason why they were bought out by the Bastard Telecommunications provider From Hell (BTFH). I got out once I could ride without stabilisers. Eventually I achieved satori.
Speed - speed tests mean nothing, just indications, it's the router synchronisation levels that matter
Price - ring Sky at any time (in contract or not), renegotiate prices (threaten to leave, speak to retentions), check new customer prices first, they generally match them.#
HTH
I've been paying $60 a month for two cell phones for the last 10 years, and the only thing that's increased is the amount of data on the plan. Irrelevant really as I never use up the entire plan anyway, but the wife was happy. On the internet, this year my provider has jacked the upload/download speeds twice, and my bill remains the same. 120 a month for what was a 10MB/3MB that went to 12/4 and now 15/6, but I live in the sticks and have a choice between my microwave provider, Hughesnet or perhaps the Muskrat. What's sad is the local cable company does fiber to the street with 10 times the bandwidth at half the cost, has fiber running not 10 feet from my property, but won't provide service.
What is the standard monthly charge on some of these networks?
"Which? calculated that a customer who took out a SIM-only 24-month contract in November 2022 will end up paying £124.21 more than they had initially expected over the life of the contract if they are on Virgin Media O2."
Looks like some punters are paying £13 for 30gb of data, which can be had for £8 elsewhere - and then paying an extra fiver on top - yikes.
Pays to shop around for deals that don't have _any_ contracts at all - just a standard monthly fee.
Dependent on your location, you can choose from a quite a few - location being which network you get the best reception from.
I'm currently on Smarty - £8 for 16gb, but you can get 40gb for £10 - as I rarely use more than 1gb a month, that's enough - it's just "broadband insurance" for me - if my fibre connection goes down, I've got 15gb to play with.
GifGaf have some good deals too.
Why anyone would opt for a contract Sim only, is beyond me - especially 24 months, that's just a bit silly really.
Also phone "voice minutes" and "texts" are becoming increasingly irrelevant, when so many people just use data to make calls on the app of their choosing - e.g. WhatsApp.
Let’s imagine my company
wage bill is ‘10’ and my company revenue is ‘100’. A difference of 90.
Now increase everything by 10%
wage bill now ‘11’ and revenue now ‘110’ - a difference of 99.
The top and bottom line have different gradients in absolute terms. That’s why many huge companies like to take in %ages to make things seem less greedy and inequitable.
Well from my point of view when I signed up for BT Fibre I looked at the 1Gb and decided because they are gonna increase the price in April 2024 that I would not get 1Gbit but the cheaper 500Mbit, I am not saying I am the norm but that potentially means BT are hurting their on business by doing what they are doing. Its funny how tech gets cheaper/or faster every year for the same price but internet access just goes on increasing ! Phones are also increasing in price when they are just a phone and anyone that uses them thinking they are secure are just crazy. No credit card/Bank card etc details go anywhere near my PAYG phone, no i don't use an app to pay - I use 1pmobile website with fixed £10 every 120 days just so that I have the ability to make a phone call/send a text. I never use my phone for data except on my own wifi and never use any web browser because I don't trust internet access via my phone. I use 100% Linux on all my PC's and use Firefox & Librewolf as my browsers of choice using Adblockers etc of course to reduce my internet footprint. I know I am not perfect but using Linux means MS gets nothing from me, using Android means Apple gets nothing from me, Not using internet or any browser on my Phone means Google gets very little from me, Using Firefox and Librewolf on Linux means Google gets very little from me. I have a domain name so have unlimited email addresses, using a different email address for anywhere that requires a email address like BT etc so that I can see where any website has been compromised and can then just bin all emails from that website.
I recall that after one network introduced the annual 3.9% rise + inflation the others then followed suit, all at the same 3.9%. So much for competition which will be further reduced if Vodafone are allowed to buy Three (hopefully the CMA will knock that back, again). Virgin Mobile used to offer some very competitive price plans (though I was never personally a customer) which, surprise, surprise were ditched along with that brand when the O2 deal went through (with their higher cost plans remaining).
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