back to article Ofcom proposes ban on UK telcos making 'inflation-linked' price hikes mid-contract

Brit telecoms regulator Ofcom is proposing fresh rules that take a swipe at companies who impose inflation-linked price rises in the middle of a contract, saying pricing should be more transparent for customers. The Office of Communications oversees local TV, radio and teleco services, and after its latest consultation wants …

  1. Aladdin Sane
    Mushroom

    Inflation rises are a sham. If they really needed to increase the price they would increase the new contracts in line as well, but the bastards don't. It's just to pad their already healthy bottom line.

    1. adam 40 Silver badge

      Exactly, in line with Moore's Law and the general increase in bandwidths of the backbone for the same price over time, the prices should be going down 10% a year.

      What I do, is to vote with my feet. Usually the next contract for the same b/w is 40-50% cheaper.

    2. Anonymous Coward
      Anonymous Coward

      I wish merit rise was inflation + 3.9%

      Merican’s don’t seem to get Cost of Living rises at all ?!

    3. NeilPost

      They should legislate the same as for Car and Home Insurance - where new customer prices and renewals are legally required to be the same.

      In contract price rise by +10%, new contract should rise +10% too.

    4. Tron Silver badge

      Inflation rises are an inevitable necessity.

      Any company that cannot increase its prices by inflation will go bust. If you have a crappy government that delivers inflation (Brexit took Sterling down 25%, which explains the inflation we have seen over the last couple of years), you have no choice but to follow suit. Over and above inflation however, is profiteering.

      Being forced to peg your prices, not knowing what inflation was going to be, suggests that the government know nothing about economics. But the Tories have been proving that for years.

      Price fixing is not a solution to bad government. It just sees anyone with any sense quit the market.

      Perhaps we will all have just one ISP in the future - the government. They won't have to ask anyone's permission to spy on everyone then. And standards will match those of British Leyland.

      1. I could be a dog really Bronze badge

        Re: Inflation rises are an inevitable necessity.

        It means that providers that don't understand economics go bust - like we've seen in the energy supply market.

        Many energy providers sold fixed price tariffs, but didn't forward buy "hedge" their inputs. Hence they found themselves with negative profit margins when input prices went up and they couldn't raise output prices.

        While telecoms/internet provision is somewhat different in terms of inputs, they have the same options in terms of balancing terms they offer punters with terms they get from their suppliers. So if they can't get fixed prices from their suppliers for (say) 24 months, then if they offer 24 month fixed price contracts then they are taking the risk. If they are forced to fix price rises for customers, then I suspect we'll see more shorter contracts on offer - or longer contracts becoming (relative to 12 month contracts) getting more expensive to cover the risk.

        1. DaveKsailing

          Re: Inflation rises are an inevitable necessity.

          Exactly! They're the ones that keep extending the terms of their "contracts". 20 years ago many of the best ISPs offered monthly rolling contracts priced on bandwidth and data usage and following the switch to broadband the early increases in speed from 0.5 to 2Mbps were passed-on to the customers at no extra cost but then we had the "up to 8Mbps" followed by "unlimited downloads" marketing nonsense with undeclared traffic-shaping/throttling which OFCOM did sod all about.

          Around this time many ISPs were bought/sold out and monthly rolling contracts started to become expensive and disappeared from most ISPs offerings leaving mainly 12 month contracts. Then some new ISPs offered "genuine unlimited" and hoovered up new customers so the other ISPs upgraded and started to follow but contracts started getting longer at 18 months with false special deals that they called discounts on your bill so that when your contract term ends they drop the discount and start charging you £5-£15 more per month than what they're offering exclusively to new customers (at or before this point I usually switched ISP and/or wasted 30+ minutes on the phone negotiating another deal)

          Before most urban areas started to achieve 8Mbps we started receiving offers to upgrade to FTTC or "standard fibre" with continued "up to" marketing nonsense. I ignored that half-arsed fibre tosh and waited for FTTP or "full fibre" to become available. By this time my standard broadband was achieving 12Mbps which was more than adequate for streaming 4K TV and sofa-surfing on a mobile. I received weekly calls from my ISP trying to persuade me to pay an extra £5-£10 a month for a faster connection I didn't need. "But it's much faster", they kept telling me. "But I don't need it. There's only me in the house!" I would reply. I nearly switched once when the monthly prices started to match, until I was told I would lose my house phone.

          Finally, last autumn I was forced to upgrade to FFTP with a VOIP enabled router for my house phone. Despite the notification email saying there would be no change to my contract, 2 days later I received emails telling me I was on a new more expensive contract. After some online chat with the ISP/Telecon, rather than switch, I negotiated another discount on a 24 month fixed-term contract that will obviously have an April price rise! I still paid extra for the consortium of BT/Open reach/Talk Talk to upgrade their obsolete kit and 50 year old wiring that until a few years ago OFCOM allowed them to charge £12.99 line rental for before they absorbed/hid the cost. Top job OFCOM!

  2. Anonymous Coward
    Anonymous Coward

    Hey, there's an idea...

    Ban political parties in power who cause inflation!

    1. a pressbutton

      Re: Hey, there's an idea...

      That's all of them.

    2. Anonymous Coward
      Anonymous Coward

      Re: Hey, there's an idea...

      Political parties don't cause inflation silly. Things costing more causes (rampant capitalist greed) inflation coupled with the behaviour of banks and monetary policy.

      1. elsergiovolador Silver badge

        Re: Hey, there's an idea...

        Not true. We have a supply side inflation caused by government and Bank of England.

        If you massively hike taxes and put red tape - the cost of employment and services (IR35 contributed to this massively) must go up. This causes a snowball effect, where people need more money to buy said services and generally to cover the costs of living and that puts further pressure on increase of wages.

        This has been compounded by BoE interest rate hikes - companies have got more limited access to credit and more expensive thus causing even more strain on supply chains and businesses having to raise prices even to keep the lights on.

        This is completely different from demand based inflation where people have too much money.

        But politicians and the media have been taking people for fools on one hand saying that wages rise too quickly and on another that there is cost of living crisis.

        It's a massive con by people who couldn't run a bath, let alone the country.

        Only way to get out of this mess is to lower taxes and scrap some supply side limiting regulation, but the rich don't want that. They want to see people losing their savings, homes in order for them to own nothing and become slaves.

        1. Blazde Silver badge

          Re: Hey, there's an idea...

          This has been compounded by BoE interest rate hikes - companies have got more limited access to credit and more expensive thus causing even more strain on supply chains and businesses having to raise prices even to keep the lights on.

          Not gonna comment on the rest but this part is refutable by studying the chronology of rising inflation, rising interest rates, and then falling inflation: https://www.statista.com/statistics/1311945/uk-inflation-rate-central-bank-interest-rate-monthly/

          Let's try it like this: "companies & individuals have got more limited access to credit and more expensive thus causing them to buy less stuff, reducing demand and therefore also reducing inflation"

          This is the trouble with economics - always two sides to the coin, no matter how much the coin is worth.

        2. Anonymous Coward
          Anonymous Coward

          Re: Hey, there's an idea...

          Central bank interest rate rises do not cause inflation, they are the thing keeping it in check. Raising interest rates suppresses demand and (usually) increases the relative value of your currency, which makes imports cheaper. Both of which help fight inflation.

          This is why the US has one of the lowest interest rates globally at the moment. The Fed hiked rates earlier and more aggressively than most other central banks.

          The main causes of inflation globally over the last few years are:

          * Surge in demand after COVID coupled with the reduction in supply during COVID leading to supply shortages.

          * Shortages exacerbated by China staying locked down and not helped by a ship getting stuck in the Suez canal.

          * OPEC+ pumping less oil than they could to try keep the oil price high. High oil price factors into all prices.

          * Russia invading Ukraine leading to grain & cooking oil shortages as well as countries moving away from Russian oil & gas.

          Inflation is a measure of rate of price change though. It shouldn't be a driver. Prices should be based on cost of supply, not artificially bumping them up just because some other products are increasing in price. That is price gouging which will keep the inflation rate higher than it should be.

          1. Richard 12 Silver badge

            Re: Hey, there's an idea...

            Wild inflation spirals are directly caused by these "Inflation + some amount" price rises.

            Any fool can see that widespread "Inflation plus 3.9%" forces inflation to be at least 3.9% the first year, then at least 7.8%, then...

            And looking around, every single mobile telco is doing exactly this figure. It looks very much like collusion, really.

            At the moment it's only telco contracts doing that - it's banned for every other consumer market.

            There's no need for any consultation. Ban the practice. Loading all the risk onto the consumer is usually illegal, so why does Ofcom accept it here?

            The telcos employ economists, consumers do not.

            1. Chris Evans

              Re: Hey, there's an idea...

              "At the moment it's only telco contracts doing that - it's banned for every other consumer market."

              I don't think it is banned, though my only other regular contract I have is Energy and that is currently highly regulated. A friend has a flat rent contract of Inflation + 3%. I can't think of any other common long term consumer agreements.

              Whilst Ofcom may not be able ban quantified in contract rises, the government could!

              1. Blazde Silver badge

                Re: Hey, there's an idea...

                I can't think of any other common long term consumer agreements

                Well mortgages would be the biggie. About 1/4 in the UK are variable-rate, but even for fixed-rate in the long-term a lot of people are forced to mortgage at rates heavily influenced by inflation.

            2. Anonymous Coward Silver badge
              Holmes

              Re: Hey, there's an idea...

              It's not collusion per se. It's that the regulator ruled that inflation+3.9% was the maximum they could increase without triggering contract breaks. They basically said "yeah, that's near enough the same price" and then inflation shot up.

              So this is all just backpedalling from ofcom really.

            3. Tom Chiverton 1 Silver badge

              Re: Hey, there's an idea...

              Every single telco? Nah. GiffGaff seems to be sticking to simple monthly prices.

          2. Chris Evans

            Re: Hey, there's an idea...

            For my small business (Not registered for VAT) Brexit has put up my buying prices from the EU by 20%

            1. Anonymous Coward
              Anonymous Coward

              Re: Hey, there's an idea...

              My imports from the US have gone up rather more than that. And that's got zero to do with Brexit. Inflation + vast increases in transport costs.

            2. Anonymous Coward
              Anonymous Coward

              Re: Hey, there's an idea...

              Brexit was a particularly idiotic act of economic self harm that didn't help. The extra non tariff impediments to trade with the EU as well as the collapse in the value of the pound was an extra layer of pain for the UK on top of the global issues causing inflation.

        3. TheMeerkat

          Re: Hey, there's an idea...

          > This has been compounded by BoE interest rate hikes

          Actually, it is low interest rates that cause inflation, not the other way around.

          Low interest rate means more money created.

          1. Alan Brown Silver badge

            Re: Hey, there's an idea...

            People are under the illusion that the BoE and government control money supply

            They don't. Banks do. Money is a measure of _debt_, not asset and is essentially "created out of thin air" every time banks issue loans

            Back in the late 70s the BoE was frantically taking money out of circulation but banks were creating it faster than the BoE could absorb it by increasing their gearing (this is a ratio of deposits to loans).

            After 2011 the BoE was franctically pouring money into circulation and banks used it to reduce gearing

            Interest rates are mostly a measure of how much people are willing to pay for financing. The entire economic model is broken in any case as productivity has risen over 50% since the 1990s whilst wages have barely shifted. Someone's trousering the extra and it isn't the lower 95% of the population

            Or to put it another way: The gap between rich and poor is now greater than it's ever been in human history - including the infamous "gilded era" of the late 19th/early 20th century - and it shows in the way the rich are buying their trinkets

            Stuff like "mid contract rate hikes" are only legal in Britain and you have to wonder who paid who to allow it to happen. OFCOM isn't fit for purpose - and in any case this kind of behaviour SHOULD be a matter for the Competiton and Markets Authority to enforce. How a technical regulator ended up in charge of financial and competition regulation is the kind of thing which underscores how rotten the entire structure is

            1. SundogUK Silver badge

              Re: Hey, there's an idea...

              This isn't actually true. The supply of money is far more complicated than that (https://en.wikipedia.org/wiki/Money_supply) and governments/central banks do have significant control over it through absolute control of the M0 and MB supply and by legal restraints on banks gearing of M1 and above.

              1. DaveLS

                Re: Hey, there's an idea...

                It's certainly complicated by modern financial instruments and practices, and there is —arguably inadequate— state regulation of the creation of money by banks. Nevertheless, banks create around 80% of money in the UK economy, according to the Bank of England. See, for example: https://www.bankofengland.co.uk/explainers/how-is-money-created

                and for more detail: https://www.bankofengland.co.uk/-/media/boe/files/quarterly-bulletin/2014/money-creation-in-the-modern-economy

                1. SundogUK Silver badge

                  Re: Hey, there's an idea...

                  That's the M1 I mentioned. The ratio is controlled by the central bank.

        4. hoola Silver badge

          Re: Hey, there's an idea...

          However most of the inflation has been caused by instability in energy prices, mostly gas.

          You can bang on about IR35 forever but IR35 did not cause the wind to stop blowing in 2021 so Germany used huge amounts of gas reserves in the summer and Putin invading Ukraine impacting the gas supplies.

          It is not the entire cause of inflation but is probably the largest.

        5. Jaybus

          Re: Hey, there's an idea...

          Demand based inflation isn't caused by people having too much money. It is from people having too much credit. Interest rates are increased with the goal of decreasing inflation by decreasing the buying on credit.

          But there is another type of supply-side inflation that is caused by there being too little of a needed commodity. For example, a shortage of diesel causes an increase in the cost of diesel, and so an increase in every commodity that requires diesel to make, ship, or store.This also includes gas used in electricity production, heating of facilities and office buildings, etc. Any shortage of energy supply is a big inflation driver, because it affects the price of everything everything that requires energy to make, ship, or store, which is....everything.

  3. Bertieboy

    Price rises

    I know they've never been the cheapest but I pretty sure I've never seen a price rise from A&A since 2014. In fact, last month the price dropped by £10 as I've migrated to FTTP.

    1. A Non e-mouse Silver badge

      Re: Price rises

      I'm an A&A customer and I've had both a price cut and a quota increase during my time with them.

    2. Recluse

      Re: Price rises

      Oh A&A do put their prices up !

      I seem to recall them increasing their monthly line rental on VOIP lines (SIP Number service) from £1.00 to £1.20 per month.

      Mind you it was their first price increase in over ten years and if you contrast them with the grasping main players (BT/Virgin et al) I consider their SIP services a bargain.

    3. Alan Brown Silver badge

      Re: Price rises

      I've never seen a mid contract rise from ANY supplier except the large ones with market dominance, or the shells of small companies they've hoovered up (If you value customer service, it's time to look for a new provider when these start happening)

  4. Lazlo Woodbine

    It's amazing isn't it, Ofcom rules allow phone contracts to increase by a maximum of CPI + 3.9%, and they're surprised when everybody increases their contracts by CPI + 3.9%

    1. juice

      Shocked, of Hamel Hampsted

      In truth, the general principle of raising prices by the current CPI does make sense to me; after all, costs for the telco will be rising in much the same way as for everyone else.

      On t'other hand, I'd be more impressed if more of those price rises filtered through to their employees.

      And as I've previously ranted, one thing that really annoys me is that if you have a "handset + airtime" contract, most telcos[*] apply the price hike to the combined cost of these, despite the fact that the handset has already been paid for and delivered.

      Quite how the logic for that works (other than "Because money") is beyond me...

      [*] O2 is the exception to this rule, and has maintained free EU roaming, to boot. Methinks I'll be switching, come the next contract expiry...

      1. Julian 8

        Re: Shocked, of Hamel Hampsted

        O2 wont tell you when your contract has expired and let you stay paying whatever.

        If you do say anything, their new price is complete crap (about £10 less)

        Had it recently where someone here (MiL's other half) had a 5/6 year old phone and was still paying £40 odd quid for it. He eventially spoke to them and got a "good deal" of £25 after he bought a Galaxy tab. No idea why, he has no broadband and being ripped off again (but he does this a lot).

        We have been telling him for years to get a new phone or contract or move to one of the SIM only deals - he never bothers. Any to make it worse, he has 2 contacts. One for him and one for the MiL !

        (they have now upgraded to the latest iphone and Galaxy, so not quite so bad - but he was still ripped off for years)

        1. Aladdin Sane

          Re: Shocked, of Hamel Hampsted

          Was that direct from O2 or from a reseller? Direct they lock you in for 3 years but then drop the device part of the pcm when paid off. Reseller it doesn't change after the lock in period unless you ask.

        2. druck Silver badge

          Re: Shocked, of Hamel Hampsted

          O2 wont tell you when your contract has expired and let you stay paying whatever.

          If you buy your phone directly from O2, they drop the price automatically as soon as your phone is paid off.

          If you buy from someone like Carphone Warehouse, you'll be paying the higher price for years until you eventually realise and cancel the contract.

        3. Alan Brown Silver badge

          Re: Shocked, of Hamel Hampsted

          The mobile companies are being taken to court over this right now - the argument (and it's hard to refute) is that once the finance charges are paid off (the contract period), it should be illegal to keep taking loan repayments until the client notices (This was something some retailers pulled on computers back in the 1990s-2000s - and they were very thoroughly stomped for doing it)

          If sucessful the mobe companies are facing having to make payouts of £3billion or so in refunds

          1. Lurko

            Re: Shocked, of Hamel Hampsted

            "If sucessful the mobe companies are facing having to make payouts of £3billion or so in refunds"

            It would be nice to think that'll happen, but the reality is that Ofcom have been complicit in these rip-off arrangements for many years, and the legal action is by a single activist and a small law firm. The telcos will be throwing serious money at Magic Circle law firms to make sure this gets thrown out.

      2. Anonymous Coward
        Anonymous Coward

        Re: Shocked, of Hamel Hampsted

        Naaah.

        The telco should factor inflation into account when pricing the contract, or if they can't do that, - shock-horror - not make contracts so long!

        The contract is very one sided if they can just change the agreed on price.

      3. Brewster's Angle Grinder Silver badge

        Re: Shocked, of Hamel Hampsted

        "In truth, the general principle of raising prices by the current CPI does make sense to me;..."

        First, it should be RPI, not CPI.

        Second, if everybody, everywhere does that with their prices, then "inflation" is locked in. (Or, more likely, spirals upwards.) This is supposed to be a market; they are supposed to compete. If it's a conveyor belt inflation rise with prices much of a much, we might as well have a national, not-for-profit provider.

        1. Richard 12 Silver badge
          Alert

          Re: Shocked, of Hamel Hampsted

          No.

          RPI is explicitly obsolete since 2013, and should not be used by anyone, according to the Office for National Statistics. It's also usually higher than CPI or CPIH due to an inbuilt bias.

          I'm hoping they stop publishing that figure soon, if only to stop companies using it.

          CPIH is their preferred measure at the moment, as it includes housing, and so is far more representative of real people (as opposed to corporations).

          The government prefer CPI, because it's lower - by excluding housing.

          As of Oct 2023:

          CPIH 4.7%

          CPI 4.6%

          RPI 6.1%

          1. Lurko

            Re: Shocked, of Hamel Hampsted

            They shouldn't be allowed to use ANY index, because no consumer index reflects the costs big telcos face, and even old produce price index doesn't really apply. It shouldn't be consumer's responsibility to shoulder the inflation risk for multi-billion corporations.

            If they want to put prices up to reflect rising costs, let them do it ONLY outside any fixed term.

      4. James Turner

        Re: Shocked, of Hamel Hampsted

        Vodafone are also an exception. The device is a separate loan repayment unaffected by increases to the airtime contract.

        1. juice

          Re: Shocked, of Hamel Hampsted

          > Vodafone are also an exception.

          Hmm. I'm on Vodafone, bought my phone/contract in February and got hit with a 14.4% price increase on the entire contract in March. Which was an unpleasant surprise; if nothing else, having a price increase so soon after the contract started feels more than a touch disingenuous.

          Having said that, I got my phone via Carphone Warehouse (since they offered a better trade-in value), so perhaps the fact that they applied the price rise to the "whole" is due to the contract being via a third party. Still not a good thing!

      5. Alan Brown Silver badge

        Re: Shocked, of Hamel Hampsted

        "after all, costs for the telco will be rising in much the same way as for everyone else"

        Speaking as someone involved in Telcos for many years - "No, they don't, not even remotely in the same way"

        They're doing it because they can.

        Bear in mind that it used to cost upwards of $3/min for international calls in the 1960s and I'd hate to think what that would be now if that was inflation linked - let alone monthly line charges

        1. Anonymous Coward
          Anonymous Coward

          Re: Shocked, of Hamel Hampsted

          @juice: It's worth taking a look at the big telco's accounts before assuming their costs rise like yours might, and seeing what their average cost per customer has actually changed by.

          Taking Three UK, and their YTD Q3 2023 figures, their cost* per contract user went DOWN by 15% on the same period ending Q3 2022, but of course Three put their prices UP by 13.4%. Does this seem reasonable to you, or reflective of their costs? Similar maths apply to both Virgin Media and O2 as I've done them in the past, I suspect that on a customer-attributable basis its the same for Vodafone and BTEE.

          * Simply difference between total margin and sales

          1. SundogUK Silver badge

            Re: Shocked, of Hamel Hampsted

            Prices are not connected to costs, except insofar as you don't want to price something lower than your costs. Prices are what the market will bear/what someone is willing to pay. We get these prices for mobiles because people put up with them, or don't understand them, or don't care about them. Which isn't entirely surprising: ignoring hardware, the contract for air-time/data is going to be the same for a billionaire as it is for a pauper.

        2. Roland6 Silver badge

          Re: Shocked, of Hamel Hampsted

          >Bear in mind that it used to cost upwards...

          Glad X.25 seems to have disappeared; sending 4 x1.44M floppy disks of data to Rio Janeiro in the 1993 cost more than the Concorde return ticket.

          I note this webpage, with all of its attachments is a 5.7MB download (with 6297.infield.js accounting for 4.9MB of that)...

          1. Roland6 Silver badge

            Re: Shocked, of Hamel Hampsted

            Interesting, that 6297.infield.js seems to be part of LastPass...

    2. Lee D Silver badge

      I refer you to council tax for the last 50+ years.

      Always by the exact maximum they're allowed to put it up, so why bother to call it a maximum at all?

  5. A Non e-mouse Silver badge

    Pity the poor mobile phone providers. Since the rise of buying hardsets separate to airtime contracts and the drop in roaming fees, they've got to keep the trough filled up with cash somehow.

    </sarcasm>

    1. Anonymous Coward
      Anonymous Coward

      They don't need pity, they've got Ofcom to help them.

      Ofcom have stood idly by whilst the telcos filled their boots with totally unwarranted "inflationary" price increases, now Ofcom propose to ban inflation linked price increases, and then it turns out that they're doing exactly that, in the most moronic, literal and least effective manner possible. All that's changing for customers is how big their next unjustified price increase will be, and how it will be communicated. I work for a regulator, amongst regulators Ofcom are a laughing stock. Slow, ineffectual, and completely captive to the industry they're supposed to regulate. The responsible minster could sort this out, but with the current shower of piss what's the chance of that?

      Any idiot could have told Ofcom that the answer here is "fixed price for a fixed term", but that's completely beyond them. Useless bunch of talent free parasites, led by a CEO who is a career civil servant, has drifted around different departments and is now paying herself a third of a million quid a year to oversee the fiasco that is Ofcom.

      For anybody that cares you can respond to the Ofcom consultation, and you'll observe that it's been structured so that an online response is not possible (donkey post or emailing a form, FFS).

  6. a pressbutton

    Ofcom have made it clear that saying

    Cost go up by cpi = bad

    Cost go up by 2.50 = OK

    So I expect the near future sales focus to be on low cost contracts say 20pm that increase at only 2 pm each year over the 5 year contract term.

    1. Richard 12 Silver badge

      That would be fine.

      If you can calculate the cost of the entire contract up-front, then you know what you're getting into.

      Your "horror story" is £240 + £264 + £288 + £312 + £336 = £1440, or £24 pcm on average.

      Price comparison sites can trivially tell you this.

      "inflation + 3.9 percentage points" means price rises are totally unpredictable. For a £20 pcm initial cost, the price rise is anywhere between £1.18 pcm per year (2% inflation) and £3.62 pcm per year (14.2%)

  7. s. pam Silver badge
    Flame

    Utter Boll Lox

    You can bet your bottom that if this goes through, all the providers will raise their fees max amount 1min before new regulations take effect!

  8. munnoch Bronze badge

    No sympathy

    Its really not that arduous to figure out these terms ahead of time and either not sign up or sign up in full knowledge that there will be an unpleasant surprise mid term.

    Same thing for mobile contracts with the cost of the mobile built in that keep going at the same level after the minimum term. You didn't take out a plan to buy the phone separately from the airtime, you took out a contract for airtime that throws in a phone for free.

    Work on the basis that everyone is out to rip you off in one way or another. Its your responsibility to PAY ATTENTION. Who do you think is paying for those big budget TV ads?

    Let the down-votes begin...

    1. Martin Summers

      Re: No sympathy

      The flaw with that argument is simply that you cannot escape it, everyone is doing it. There is nothing wrong with wanting to pay the same contracted price you signed up for, for the duration of the contract. Or do you think it's OK for someone to just extort more money out of you mid way through and have to go through the hassle of moving to someone else who is just going to do the same?

      Yes you could go pay as you go, just to get ripped off there too.

      As for contracts, anyone who was paying attention as you say, knows they just don't get a phone for free, especially the operator who will just cream off the pure profit from those suckers who keep paying when the contract period has ended.

      They're sharp business practices and they're getting away with it because they can. Not because they need the money. Do their staff see the same percentage pay rise every year I wonder?

      1. elsergiovolador Silver badge

        Re: No sympathy

        knows they just don't get a phone for free,

        It's often much cheaper to buy refurbished phone outright and a sim only contract.

        1. cookieMonster Silver badge
          Thumb Up

          Re: No sympathy

          Thats what we’ve been doing for the past few years.

      2. Alan Brown Silver badge

        Re: No sympathy

        "The flaw with that argument is simply that you cannot escape it, everyone is doing it."

        ie: Cartel Behaviour

        Active collusion doesn't need to be proven but the fact that no large company has broken ranks in order to attract more clients is a strong pointer that it's happening behind the scenes

    2. Knightlie

      Re: No sympathy

      What a load of BS. To avoid this predatory behaviour, the only answer is not buy any of the services offered? You do realise they're all doing this?

      But you said "let the downvotes commence," so you're just begin disingenuous anyway.

    3. John Robson Silver badge

      Re: No sympathy

      Offer me a contract for 1,12, 24, 36 months - and I can choose what I'm willing to pay over that time period.

      Short contracts are likely to be more expensive - there is some fixed cost for setting up a new customer.

      Long contracts should have an element of security for both parties in the contract - the consumer gets a predictable cost, and the supplier gets a predictable income stream.

      Long contracts with "oh, but we'll increase by more than the rate of inflation" are bad (and the current volatility in inflation has highlighted this). You could write long contracts to have an "increasing by 2% each year on the date of the contract".

      Or if they really don't want to raise the cost by more than inflation, just don't offer longer contracts...

      What they do now is offer a rate that is then upped in April, even if you only bought the contract in March...

    4. Julian 8

      Re: No sympathy

      a lot of people get confused by maths, exspecially percentages, and how do you know what the increase will be. Before Truss, inflation was low, post Trussonomics mini budgets, it was and still is, high

      1. Anonymous Coward
        Anonymous Coward

        Re: No sympathy

        It was 10% when she took office. Personally I don't regard that as low.

    5. Richard 12 Silver badge

      Re: No sympathy

      @munnoch What is the rate of inflation in October 2024?

      State it. Now.

      If you're wrong by 2 percentage points, you don't eat for a week.

      Would you willingly take that bet, or only if you cannot possibly avoid it?

    6. Alan Brown Silver badge

      Re: No sympathy

      "You didn't take out a plan to buy the phone separately from the airtime, you took out a contract for airtime that throws in a phone for free."

      Courts have already ruled that the fact that the same plan is available as a SIM-only contract shows that the phone is a financing deal (Hire purchase contract) and there's a new case winding its way through the legal system at the moment about the gratuitous overcharging once the contract has expired - which exposes mobe companies to £3billion in refund liabilities

  9. Patrician

    "planned increases in price in pounds and pence, and the date which these would take effect."

    So the providers will just pull an amount out their ar*es that is guaranteed to be above inflation with a bit on top.

    Just ban mid-contract price increases

    1. elsergiovolador Silver badge

      The only thing this is going to achieve is that they hike the price from the start, so you will end up paying even more.

      1. Brewster's Angle Grinder Silver badge

        Sure they'll price it in. But they might price it wrong. (Would they have priced in 10% inflation before Ukraine was invaded?) And its makes then compete up front.

      2. Alan Brown Silver badge

        The simple counter-argument to "mid contract increases" being justified by inflation is that NEW contracts at the time of the rate hike are cheaper than the old ones originally were

        This alone points out the fallacy of inflation-linked rate increases and demonstrates they're doing it because they can

    2. dgeb

      I think clarity to the purchaser is the important part - I see no issue with a 2-yr contract advertised as £20/mo for 1yr then £25/mo, if both numbers are equally prominent.

      The issue for me is when that is obfuscated, e.g. buried in T&Cs such that (a) many people never notice it, and (b) even if you did, you are now far enough through the process that you don’t reevaluate all the other options again fully. (See drip pricing).

      Inflation linked price rises during the contract term should never have been allowed in the first place - it shifts all of the burden of the contract to the consumer, and all of the benefit to the supplier.

  10. Knightlie

    “All telcos are struggling to generate new forms of revenue."

    That's not my problem. Turn the heating down or chuck stuff on eBay like the rest of us have to. I enter into a contract for a fixed price, and one that has some random "we want more money" increase halfway through is not acceptable. I don't get the luxury of reducing my payment, they should not be able to do the reverse.

    1. TonyJ

      "...I don't get the luxury of reducing my payment, they should not be able to do the reverse..."

      Agreed! The whole point of a contract is both parties are aware of what it costs. Even a fixed % increase would be better than this bollocks.

      It should act as a break clause. They can increase by say 2% each year. Or they can increase by inflation but the consumer has a right to cancel at that point at no penalty.

      1. elsergiovolador Silver badge

        I think it is a break clause. I believe you can exit the contract without penalty if they change the price in the middle.

        1. Cereberus

          Option to walk

          The contract break exists if the Telco increase prices above a certain percentage (can't be bothered to look it up) without sufficient notice. As ever there is a loophole here as they learned the hard way that people would terminate contracts and the Telco lost money on the deal because a rumour would get out they were putting up prices. People would go and take out contracts with the most expensive phones then 2 weeks later get a letter or email saying the prices are going up and as such you have the right to cancel your contract - you then got to keep the phone with the only cost being to get it unlocked for other networks.

          The loophole is that this only applies if you are not informed prior to taking out the contract. If they tell you we will put the price up by CPI + 3.9% every year and you then sign the contract you can't leave because that cost occurs as you took the contract knowing that would happen.

          The problem, as other have mentioned, is that all the companies do this, the regulator lets them, and there is no downside as 'where do you go?'

          I don't accept that operational costs rise by CPI + 3.9% for a Telco every year so can only assume this is price gouging and they get away with it year on year. Telcos should have to demonstrate their increased costs to justify increases to the consumer and Ofcom should review these and have to sign off on them before they can come into force.

          1. elsergiovolador Silver badge

            Re: Option to walk

            I don't accept that operational costs rise by CPI + 3.9% for a Telco every year so can only assume this is price gouging and they get away with it year on year.

            I don't know, we had a massive tax hikes and other regulatory costly burden. Businesses have to pay much more to skilled workers to make a difference in their net pay, especially after income tax thresholds got frozen. Independent contractors also had to up their rates by at least 30% just to keep going. Then you have higher energy costs and so on.

            I think the 3.9% figure is pretty small. Looking at the sad state of the economy, more realistic would be 15% + CPI.

            1. Alan Brown Silver badge

              Re: Option to walk

              If there really was inflationary pressure on Telcos, NEW contracts would cost more than the older ones.

              When was the last time you saw this happen?

              1. elsergiovolador Silver badge

                Re: Option to walk

                We have a supply side inflation. It's actually more expensive to get a new customer than retain the old.

                Since people have no money and existing customer base can be milked, there is no reason to bother with new contracts at this stage.

                Well, I can't remember when last time we had such a shower of incompetence in the government and BoE.

    2. Anonymous Coward
      Anonymous Coward

      At least you didn't have your contract arbitrarily replaced with a completely different one.

      The telcos entered into long term contracts for supply of network equipment.

      Then the government then decided a certain supplier wasn't politically acceptable and caused those contracts to be cancelled.

      As the pool of suppliers was then smaller, the replacement kit was more expensive.

      And more money had to be spent to remove the existing equipment.

      Who did you think would be covering those costs?

      1. Alan Brown Silver badge

        In that case (and in all such cases), telcos sucessfully forced the government to cover the cost difference AND the costs of breaking the original contracts

        So the answer is "the taxpayer did"

  11. TonyJ

    Ofcom...

    I changed my contract with EE January this year, for a less expensive SIM only deal (I have only had SIM only for the better part of 15 years now)

    At the same time, I added an extra SIM for my son. I was told, and read the details, that I could gift him any of my [unlimited] data up to a maximum of 100GB per month.

    What they didn't say. What their own helpdesk didn't know, was that any data out of the first 100GB per month that I personally used, was taken off of the 100GB I could gift.

    So, for example, if I used 10GB, I would only have 90GB left to gift...

    I complained. I showed umpteen screen shots and emails that showed beyond all doubt that this wasn't made clear at any point nor was it clear in the contract (read: didn't exist in it).

    I was told, repeatedly, by both the ombudsman and EE that it was very clear that I could only gift 100GB of data a month...note that wording. At no point was it clear that this would decrease.

    So EE got away with (and I assume still are) misselling to customers and the ombudsman are ok with that. They completely failed to understand the core problem that I raised - either on purpose or simply because the were too stupid.

    In fact, EE's own web pages STILL make no reference to this con: https://ee.co.uk/help/mobile/manage-use/pay-monthly/data-gifting

    Oh and to top it off, the ombudsman allowed a terms and conditions document to be used as suitable evidence by EE that was dated more than 3 months *after* I signed my contract... not the one that was actually in force at the time.

    No... I don't believe that any mobile company, or the ombudsman, give one toss about their customers and will use every possible method in their arsenal to rip us off. Just look at roaming charges, how long they kept charging people the same for a contract + phone despite the phone part being paid off, etc etc...

    1. elsergiovolador Silver badge

      Re: Ofcom...

      and the ombudsman are ok with that.

      You are discovering that most UK services are only a facade and we pay a fortune in taxes for this *unpleasant organic matter*-show.

      1. TonyJ

        Re: Ofcom...

        Yes and no.

        I once had recourse to complain to the FCA - FSA as it was then.

        They seriously kicked arse. Long story short, but it was Alliance and Leicester at the time. I was working in Europe, on a secure site. So secure that you couldn't take mobiles onto it so I was at work before they opened and still there when they closed and they refused to use their secure messaging service, saying (quote) that "emails aren't secure..." eh?

        Anyway, once I had complained and still got nowhere I went to the FCA and they took no prisoners. Not only did I get the complaint sorted, a written apology but a pretty chunky sum of compensation - which I hadn't even asked for.

        Ditto Ofgen. I've had to go to them twice over the past twenty or so years. The first time, we moved into our new build house just as one energy company sold to another (might've been Elf to EDF I think) and somehow our meter never existed on the system.

        After regular emails and even letters, I went to ofgen. Amazingly within around a month, they found the meter. Ofgem wouldn't let them backdate more than that month because I'd been trying for over a year to get it resolved. I'd even put the money into a savings account, just in case, so that was a nice bonus. Oh and again, they made them pay a bit in compensation to boot.

        I had to go to Ofgen about two years ago, but I can't recall why. I do know it was, once again, sorted pretty quickly in my favour.

        I will say that the FCA are brutally on the side of a consumer. To the point it costs an FCA registered company the moment you make a complaint to the FCA. I worked for an insurance company around 15 years ago and they would do everything to avoid it because it was something like £250 just because they got a complaint.

        1. Aladdin Sane

          Re: Ofcom...

          When I worked for a large bank anything that went the Ombudsman cost £250 in fees, so the complaints team had that level of authority to credit accounts. Cheaper in the long run.

        2. Jamie Jones Silver badge

          Re: Ofcom...

          Thanks. That's interesting to know.... Our dealings with the ombudsman went nowhere.

          Now OVO have attempted to change my direct debit from £14 to £1,768 a month (!) (for a one person flat!) I will have to call on them!

          (Original details here: https://forums.theregister.com/forum/all/2023/10/23/millions_of_smart_meters_will/#c_4747614

          1. Alan Brown Silver badge

            Re: Ofcom...

            This kind of utter incompetence is WHY I won't let energy companies have direct debit authority on my accounts

            1. Jamie Jones Silver badge
              Thumb Up

              Re: Ofcom...

              Good thinking.

              Anyway, lesson learnt!

              At least I did cancel the direct debit the moment I got that email!

          2. Anonymous Coward
            Anonymous Coward

            Re: Ofcom...

            Jamie Jones: "Thanks. That's interesting to know.... Our dealings with the ombudsman went nowhere."

            Well, can't speak for your case, but many people think the ombudsman is just a sort of complaint escalation service. In reality alternative dispute resolution services such as the various Ombudsman services are there as an alternative to taking the matter to court, and to get a decent outcome it really does pay to have put as much work into an Ombudsman complaint as if you were going to court.

            So being clear on the process the ADR service require you to follow. Making a very clear argument, being in possession of and clearly presenting the facts (eg not just what you've got to hand and what you think was said, but by wading through a DSAR response from the company) and being very clear on the grounds of your complaint (contractual law, regulatory obligations, or statute law).

            1. Jamie Jones Silver badge
              Thumb Up

              Re: Ofcom...

              Thanks, anon. I'll bear that advice in mind

        3. elsergiovolador Silver badge

          Re: Ofcom...

          Services today and then is a different matter. Massively underfunded where funding is needed and over funded where money flows to certain big corporations.

          I had unpleasant chance to deal with multiple institutions in the last few years and they are useless at best.

    2. Roland6 Silver badge

      Re: Ofcom...

      Should of visited the EE Community forums…

      Basically, to gift 100GB each month, gift on the first day of your contract month, you will then be able to use your unlimited data allowance for the rest of the month…

      1. TonyJ

        Re: Ofcom...

        "...Should of visited the EE Community forums…

        Basically, to gift 100GB each month, gift on the first day of your contract month, you will then be able to use your unlimited data allowance for the rest of the month…"

        I did (*have*, not (*of*) visit them. At the time there was nothing I could find.

        Since then, gifting it on the first day is precisely what I do.

        1. Roland6 Silver badge

          Re: Ofcom...

          Probably the posts I remember reading are a 3+ years old now and thus buried, the search facility whilst useful does tend to return a long list of stuff which you have to wade through...

          FYI, if you've not found it yet, this add-on might be useful

          https://community.ee.co.uk/t5/Offers-Add-ons/The-Free-CALL-ABROAD-Add-on-for-Cheap-Calls-Texts-from-UK/td-p/687707

          I find this useful for ad-hoc calls, particularly to mobiles.

    3. Chris Evans

      Re: Ofcom...

      But where does the 100GB of data come from? You get it from the Teleco and you use some of it yourself. It could have been better worded though.

  12. Ste Van De Mull

    If it's got OF in title going to get RIPPED OFF

    If It's got "Of" in the title of the Authority, you know you're going to get "Ripped Off"

    Of Wat

    Of Gen

    RIPPED OFF

    1. Aladdin Sane

      Re: If it's got OF in title going to get RIPPED OFF

      Only Fans...

      Wait, somebody's still getting screwed. Carry on as you were.

  13. elsergiovolador Silver badge

    Hammer and sickle

    While I understand that mid-contract price rises are inconvenient - there is an ability to terminate the contract without penalty when it happens.

    That said, price controls never result in the intended effect.

    What is going to happen is that telcos will have to factor in possible inflation to the starting price of the contract and very likely we will be paying more that we are currently paying.

    I wonder if OFCOM entered a contest with CMA on which is the most useless organisation.

    1. TonyJ

      Re: Hammer and sickle

      "..While I understand that mid-contract price rises are inconvenient - there is an ability to terminate the contract without penalty when it happens..."

      Yes and no.

      Yes if the price rise is not in the contract when you took it out.

      No if it is in the contract.

      1. elsergiovolador Silver badge

        Re: Hammer and sickle

        What I am saying is that if company won't be able to change price, they will go to their principal tea leaves teller to predict what kind of inflation they are going to expect in the coming two years and they'll just add it to the price bringing the price hike forward.

        The thing is that the prediction might likely not materialise, but you still get a price with the hike that otherwise would have not been applied.

        1. doublelayer Silver badge

          Re: Hammer and sickle

          Which means that, when you're looking at contracts, you know what they will charge. If it's a higher number, you can look around for the person charging the lower number. If it's a lower number which will increase by an unpredictable amount, you can't make that comparison. Adding in expected inflation is exactly what I want them to do: they decide how much they want to charge for the service, I see all the data before signing up, and we can quickly agree on whether I'm willing to accept that or not. If the contract allows them to change the prices, then it usually does not allow me to cancel the contract because they did, and I am now required to pay whatever amount they come up with.

          If they don't like that, they're free to not have any contracts. I have various plans that work like that. They can raise the price any time and by any amount they like, and I can leave them at any time. This is fine with me because, at worst, I pay the higher price for one month to give myself some time to get a new provider, then they lose my business. In my experience, they know that people will do that and therefore avoid doing anything too egregious that would make a lot of customers want to.

    2. R Soul Silver badge

      the most useless organisation?

      These tossers aren't even close to winning that prize. Their uselessness loses out (in no particular order) to: the banks, HMRC, the thieving utility companies, TalkTalk, train companies, the FA/FIFA, mobile telcos, Beardienet, fixed line telcos, the post office, the passport office, Liz Truss, Land Registry, the current government, Dixons/PissyWorld, M$ customer support, any call centre, Kier Starmer, your local council, DVLC, etc, etc.

      1. Alan Brown Silver badge

        Re: the most useless organisation?

        It's not as if this is recent.

        All of the above (and more) is WHY "made in Britain" and "british services" have been regarded as toxic warning labels across the Commonwealth since the late 1960s (or earlier)

      2. Jamie Jones Silver badge
        Happy

        Re: the most useless organisation?

        "Love to the family, Colin"

  14. Missing Semicolon Silver badge

    Inflation?

    Ok, I could kinda see an inflation-based rise could be justified. But inflation plus 3.9%? Where's the justification for the above-inflation rise?

    1. Roland6 Silver badge

      Re: Inflation?

      It was supposed to be used to fund network enlargement to support full national coverage.

      1. Alan Brown Silver badge

        Re: Inflation?

        "supposed to be" - except that as in the USA, excuses were constantly found not to do it and regulators failed to hold telcos to account (Fat brown envelopes changing hands on Golf Courses, etc)

  15. The commentard formerly known as Mister_C Silver badge

    Here's a draft of future contracts

    "Your future contract price will be subject to annual fluctuation as follows:

    RPI is between 0% and 2.5% - your contract will increase by N pounds per month

    RPI is between 2.5% and 5% - your contract will increase by 2N pounds per month

    RPI is between 5% and 10% - your contract will increase by 4N pounds per month"

    They've specified the rises exactly, as required, and will still advertise "fixed price contracts" until the advertising regulator finally gets round to noticing

  16. Rich 2 Silver badge

    Hobson’s Choice

    “Ofcom’s proposals won’t stop service providers raising prices mid contract, Megabuyte said, but by having to explicitly set it out in the contract, buyers will hopefully be able to factor it into their decision making”

    But if they are all doing it (and they are) then where does that leave the “decision making”?

    1. HT7777

      Re: Hobson’s Choice

      "But if they are all doing it (and they are) then where does that leave the “decision making”?"

      Buy the phone sim free - on a seperate credit agreement if required - and purchase a monthly sim only deal seperately.

  17. FirstTangoInParis Bronze badge

    Mortgage

    I can get a fixed rate mortgage for N years that stays at that rate and hence monthly payment until it ends. If banks and building societies can do this, why can’t mobile operators?

    Btw Vodafone separately bill for device and service, meaning you can renegotiate your SIM deal without impacting the phone, and when the phone deal expires, payment will end.

  18. Lost in Cyberspace

    About time

    I've always thought this increase to be highly unfair.

    You can sign up for something - £22 for 24 months for example. Small print: prices may change.

    Er, they WILL INCREASE. Not 'may change'. And you can't figure out the actual amount unless you sign up in February/March, in which case the prices will increase almost immediately after signing up.

    I'd much rather see £22/month until March, £24/month for 12 months, then £26 for the remaining 10 months. I'm willing to bet it'll be at least as much as inflation, though.

    It definitely shouldn't be down to the customers to shoulder an unpredictable increase though. The businesses should have at least some idea about their business costs for the next 24 months. Commitments should work both ways.

    Or better still, just offer 12 month contracts instead and just fix the price.

  19. shazapont
    Pirate

    Enrichment at any cost…

    What hope do we have to thwart scammers, phising and candlelighting when the gatekeepers are at it too, pushing, squeezing, wringing. They can’t be trusted so we have impotent regulators. We’re alone, unsupported and are being sold and resold.

    Complain?

    Who remains to listen and act on complaints when any semblance of support has been eroded by years of deceit, shrouded in warm nostalgic advertising drivel that has come to define the cultural backdrop of civilisation.

    What an embarrassing mess.

    — Shaz Dubois —

  20. jollyboyspecial

    "Ofcom notes that during 2023, all of the providers increased their charges by at least 12.5 percent, with some going as far as 17.3 percent."

    Ofcom must have an interesting definition of "all" since the price of my SIM increased not one jot in 2023

    1. HT7777

      "Ofcom must have an interesting definition of "all" since the price of my SIM increased not one jot in 2023"

      Ditto.

      I can't recall my £10 a month sim only GiffGaff deal increasing over the many years I've had it. The only increase has been the data allowance.

      I've had the same sim only deal for well over ten years.

      1. Spazturtle Silver badge

        I think the providers forget about some plans, I have been on a £10 a month deal with Three for almost 10 years now too, it still includes global roaming as well.

  21. MrGreen

    Regulator for Who?

    OFCOM, another regulator to ‘protect’ company profits.

    That’s why there is 90 regulators in the UK. Masses of red tape keeps the plebs away and the plebs tax is funding it.

  22. heyrick Silver badge

    I don't understand the price rises

    I have an all in one (mobile, phone, internet) from Orange (France) and while it is expensive, the price hasn't actually changed in the time I've had the contract (circa 2012). I started off with 500MB/month mobile and free calls to EU landlines from my landline. Now it's something like 200GB/month mobile and free landlines calls to landlines in most countries and mobiles in the USA (and maybe the UK, not looked to see if Brexit broke that as I don't call anybody). Plus free SMS/MMS to any mobile in France. It's a repeating 24 month thing, and every two years I can get a new phone for a reduced price (the non-phone price is the same, so I might as well...).

    In short, every so often I get more and the price doesn't change. What's so different about the UK market that prices need to go up in the middle of a contract?

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