By Paul Sandle
LONDON (Reuters) – Britain’s telecoms regulator said on Thursday it was concerned that inflation-linked hikes in broadband and mobile bills were causing uncertainty for customers, as it launched a review of in-contract price rises.
Many consumers are facing prices rises of above 14% in the coming months under the terms of contracts with suppliers such as market leader BT.
Regulator Ofcom said its research showed that about a third of mobile and broadband customers did not know whether their provider could increase prices mid-contract, while around half did not know how rises were calculated.
It said it would examine if tougher protections were needed.
“Customers need certainty and clarity about what they will pay over the course of their contract,” said Ofcom’s Director of Telecoms Consumer Protection Cristina Luna-Esteban.
“But inflation-linked price rises can be unclear and unpredictable. So we’re concerned that providers are making it difficult for customers to know what to expect.”
BT raises prices by inflation plus 3.9% every year, equating to 14.4% on March 31. Vodafone and TalkTalk will impose similar increases. Virgin Media plans to increase bills by an average 13.8% in April or May, and has said it will move to inflation-linked rises next year.
BT said it was surprised by the move, given that it had moved from unplanned and unannounced price changes to a clear, single contracted rise in April each year in line with Ofcom’s fairness commitments.
“We have followed Ofcom’s previous, and new, EECC (European Electronic Communications Code) guidance on how to ensure price changes are clear for customers,” a BT Consumer spokesperson said.
“And, while price rises are never welcome, we do feel this year’s increase, of around 1 pound per week for the average customer receiving the rise, reflects incredible value given the cost increases we’re facing, the considerable investments we’re making, and ultimately the additional data that’s being consumed month on month by our customers.”
(Reporting by Paul Sandle; editing by William James, Arun Koyyur, William Maclean)
