Telecoms firms must ditch 'outrageous' price rises that could trap consumers between £60 hikes and £500 exit fees, Which? urges
The consumer champion is calling on telecoms firms to scrap these grossly unfair plans for April 2024 inflation-linked hikes that regulator Ofcom clearly determined cause 'substantial harm' to consumers.
Most of the big broadband and mobile providers are expected to go ahead with unfair and unpredictable price hikes using Consumer Prices Index (CPI) plus an arbitrary figure in April this year.
Based on responses from Which?’s latest broadband survey and analysis of mobile market data, the consumer champion has calculated how much an in-contract BT, EE, Plusnet, Shell Energy Broadband, TalkTalk, Three or Vodafone customer could see their payments rise by.
Which? found that, across the board, the CPI-linked hikes faced by affected consumers work out as customers essentially paying close to a whole extra month on top of their existing contract, yet they do not benefit from any additional services for this extra cost.
The inflation-linked price hikes come just 12 months after many of these firms imposed price increases of more than 14% on their customers.
BT, EE and Plusnet have already confirmed they will be going ahead with price hikes of 7.9% for customers this April (the latest CPI figure of 4% plus an arbitrary 3.9%). BT has said it will implement Ofcom’s proposals in the summer but Which? believes it is cynical to try to claim too much credit for a change they would likely have been forced to make later this year by the regulator. BT has the power to make this change now rather than waiting until the summer.
Out of the providers using CPI to calculate increases, the impact of BT’s hike will be the biggest for broadband - according to Which? analysis it is predicted to be £35.92 annually for an average BT customer.
The average BT customer will already be paying £37.89 a month on average. If they wanted to switch to another provider they would face an exit fee of £218.64 assuming they had 12 months remaining on their contract.
Meanwhile, the average Vodafone Sim-only mobile customer faces the biggest annual price hike of the major mobile providers. Its expected 7.9% (CPI+3.9%) increase means the average customer paying £28.89 a month would face a £27.36 annual price hike from April 2024. A Vodafone customer wanting to avoid this scenario would face an eye-watering £339.75 fee to exit the contract early.
A customer who faced both of these respective price hikes would be looking at a combined £63.28 price hike or the alternative of a total of £558.39 in exit fees.
Which?’s research found that the average EE broadband customer pays £34.05 a month on average, but faces price hikes this April of £32.28 or an exit fee of £132.38.
Vodafone broadband customers pay £31.16 a month on average, however they face annual price hikes of £29.54 this April versus exit fees of £121.42.
TalkTalk has confirmed customers on its variable plans will face a slightly lower April percentage hike of 7.7% (CPI+3.7%). However, according to Which?’s research, it is predicted that this would still result in a £29.53 yearly hike, while it would cost £122.40 to leave the contract. These figures are disputed by TalkTalk.
EE mobile customers face a £24.84 hike or a £289.64 exit fee, while Three mobile customers face a £19.20 hike or a £235.24 exit fee.
Plusnet broadband customers face an annual hike of £28.31 or an exit fee of £141.81, while Shell Energy broadband has confirmed it will be going ahead with a 6% (CPI+2%) annual price hike for customers that could result in a £18.46 increase or an exit fee of £222.
O2 and Virgin Media use RPI as the measure for their price hikes. RPI is announced in February and is often even higher than the CPI+3.9% figure.
Which? believes it is unconscionable that broadband and mobile providers are planning to go ahead with inflation-linked price rises this April 2024, which will impact millions of people, after the regulator declared this practice causes substantial consumer harm and proposed a ban.
Which? is concerned that consumers taking out a 24-month broadband or mobile contract between now and Ofcom making its decision on new rules could still face unfair and unpredictable price hikes. In some cases this could even result in unpredictable price hikes in April 2026 as they will have signed up to those terms and conditions.
The consumer champion is calling for all providers to scrap this year's above inflation hikes and implement Ofcom's proposals as soon as possible so new customers are not trapped in these unfair contracts.
Rocio Concha, Which? Director of Policy and Advocacy, said:
“It’s outrageous that telecoms firms could yet again trap their customers between inflation-busting price hikes and punitive exit fees this April, despite Ofcom declaring this practice causes substantial consumer harm.
“Telecoms providers must do the right thing by halting unfair price hikes immediately, rather than piling more misery on their customers.”
Notes to editors
Which? ‘The Right to Connect’ campaign
Access to the internet has become a basic necessity to life in the 21st century – for everything from work and school to socialising, shopping, banking, and accessing essential government services. Which?’s ‘The Right to Connect’ campaign is calling for clearer and fairer pricing for telecoms customers, because when it comes to basic necessities like a reliable mobile or internet connection, consumers deserve clarity.
Methodology for broadband
Price increases
Based on the average amounts paid by customers in a December 2023/January 2024 survey of 3665 people who had a contract for a home broadband service (including broadband and phone). Data includes a nationally representative sample.
Exit fees*
To calculate the exit fees payable for broadband consumers, Which? took a hypothetical consumer who has 12 months remaining on their contract at the point where prices are set to rise. This makes the figures for annual price increases and exit fees comparable.
Calculations for BT, EE, Plusnet and Vodafone are based around exit fees faced by a customer paying the average amount as per Which?’s nationally representative survey (for broadband) or market analysis (for mobile). For these companies, Which? followed the example calculation for early termination charges displayed on their website, which is:
- Price paid per month x number of months remaining
- Remove VAT
- Subtract business cost savings
- Subtract discount for early payment
- Apply VAT
To get representative figures, Which? substituted in our average price paid per provider, and scaled the business cost savings deducted according to the difference between this price and the example price.
TalkTalk and Shell Energy Broadband have fixed exit fees which were calculated for a customer with 12 months remaining at the point where prices rise. TalkTalk charges £10.20 per remaining month for the majority of tariffs. Shell Energy Broadband charges £18.50 per remaining month for the majority of tariffs.
Methodology for mobile
Price increases
This is an estimate of the average price of a new Sim-only contract calculated using a market database and weighted using Ofcom data on providers' market share and the amount of data individuals have with their contracts. The overall market average represents our estimate for at least 95% of the UK mobile network market. The data was collected on 5 January 2024 and doesn't include out of contract prices.
Exit fees*
Exit fees have been calculated using the providers’ terms and conditions:
- EE’s terms and conditions for calculating exit fees are – remaining monthly charges, minus VAT (20%), minus 4% and then plus VAT (20%).
- Three’s calculations for exit fees are the total monthly charges remaining during the minimum term minus 3%.
- Vodafone calculates exit fees using the outstanding monthly charges for the remainder of the contract minus 2%.
*Note that exit fees may also sometimes be waived or are not payable in individual cases, for example where there have been persistent faults with the service or where the provider is in breach of another significant term of the contract.
Right of replies
A BT Consumer spokesperson (covering BT, EE and Plusnet) said: “Our annual March 31st price increase of CPI + 3.9% is going ahead and we have been clear and transparent with our customers around this. For most customers, this increase will be around £3 per month. This rise reflects the considerable investments we're making into our network, while also protecting customers in financial hardship and digital exclusion, through our market-leading social tariffs.”
“Starting in early summer 2024 and ahead of the implementation of Ofcom’s final ruling, we’re introducing a pricing model aligned with Ofcom’s approach, moving away from a price rise calculation based on percentage figures and CPI, and instead offering our customers a predictable long-term view of their contract terms. Annually we expect this price increase to be £1.50 for mobile customers and £3 for broadband customers.”
A Shell Energy Broadband spokesperson said:
“We work hard to keep our costs down, but unfortunately we experience the same inflationary cost pressures as everyone else. We have kept our 2024 price increase lower than our terms and conditions allow for, and much lower than the current price rise commitments of other providers.”
TalkTalk
TalkTalk disputed the research but did not provide a comment. The company said that it calculated the average annual increases for affected customers as £26.64.
Three and Vodafone did not provide comments for inclusion.
About Which?
Which? is the UK’s consumer champion, here to make life simpler, fairer and safer for everyone. Our research gets to the heart of consumer issues, our advice is impartial, and our rigorous product tests lead to expert recommendations. We’re the independent consumer voice that influences politicians and lawmakers, investigates, holds businesses to account and makes change happen. As an organisation we’re not for profit and all for making consumers more powerful.
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