Grayshott Gigabit Team
Jan 112 min
Updated: Jan 12
In a recent ITV interview with Martin Lewis, UK Chancellor Jeremy Hunt discussed the issue of mid-contract price hikes by broadband ISPs. He suggested involving the Competition and Markets Authority (CMA) to investigate these practices. Jeremy Hunt's comments came amidst discussions on inflation-linked price increases by providers and the complexity of these policies for consumers. Ofcom has proposed a ban on such hikes, to be introduced in the second half of 2024. although this will be too late for many consumers for 2024. If you look at the following table, most providers have a standard increase of 13.4%-14.4%that was applied in 2023 (based upon a CPI of 10.5% that was set in January 2023), and there is anticipated increases of 3.9% on top of CPI planned for 2024, which will be in place for many before the Ofcom proposed ban.
Grayshott Gigabit and other ISP's like Zen Internet & Hyperoptic, have not adopted these unfair practices as they can have the following impacts:
Lack of Transparency: Often, these price rise policies are buried in the fine print, making them confusing and misleading for consumers who may not fully understand the implications of terms like CPI or RPI.
Inconsistency with Inflation Rates: Linking price increases directly to inflation can lead to significant hikes, especially during periods of high inflation, disproportionately affecting consumers.
Challenges in Budgeting: Consumers enter contracts with a certain budget in mind. Mid-contract price rises can disrupt their financial planning, especially for those on fixed incomes.
Consumer Trust: Such practices can erode trust between consumers and providers, as consumers may feel that ISPs are taking advantage of the contract to impose unfair price increases.
Market Competition: Mid-contract hikes might not reflect the actual costs of service provision and can distort the competitive landscape, disadvantaging smaller providers who don't adopt such practices.
We often advise consumers to look at the fine print of any contract, as they can be unaware that some offers may be too good to be true. Many consumers are not aware of the increases post contract that they are charged. BT have a standard policy of increasing all contract prices by £5/month for all of their broadband service tariffs, after the initial term. Gigaclear, who last year added 14% on their consumer contracts with their mid-contract price rises, also jack up the prices at the end of the 18 month term and customers are left unaware that their broadband prices can increase by 155%!! For example, Gigaclear pricing for 400Mbps & 900Mbps increase to £51/month & £82/month after 18 months, and that is without any additional mid-contract price index rise that they plan to apply in 2024.