Broadband and phone suppliers have faced increased criticism for hitting users with bill rises that many have deemed unpredictable and unfair. Recent hikes have used a system of taking the Consumer Price Index (CPI) and then adding a set percentage on top. That may sound pretty simple but with inflation running at record highs in recent years, it’s meant some customers have seen things rise by over 10 percent.
The current method can also get very confusing as CPI is constantly changing, which means millions of users have been left uncertain about exactly how much extra they will have to pay each year.
It’s something telecoms regulator Ofcom has been trying to improve via its “Fairness for Customers” commitment and BT has now confirmed it’s changing things up.
From this month, the company says it will no longer adjust things by CPI plus its own 3.9 percent charge.
Instead, it will now add a standard amount to bills so users know exactly what’s coming and how much extra they’ll need to budget for.
BT says that for new and re-contracting mobile customers, this annual increase will be an extra £1.50 a month. It will be £1.50 a month for connected devices (including laptops, tablets and smart watches), £2 a month for TV customers, and £3 a month for broadband customers. Out-of-bundle services will be subject to an annual 5 percent increase.
The update affects all users including BT-owned EE and Plusnet customers.
“In January, we announced that we would move away from inflation-linked price rises for our mobile, TV and broadband customers,” said Marc Allera, CEO, BT Group’s Consumer division.
“We acted after an Ofcom consultation proposed that when people sign up to a phone, broadband or pay TV contract, they should be clear and certain about what they will have to pay throughout its duration. The regulator said price increases being linked to future inflation created too much uncertainty for consumers.”
It’s now hoped more suppliers will follow and set price rises to make things clearer.
In response to the news, Rocio Concha, Which? Director of Policy and Advocacy, said: “It’s positive that new and re-contracting BT and EE customers will no longer have to face unpredictable inflation-linked price hikes. However, a lot of existing customers will still be reeling from the inflation-busting hikes they were hit with at the beginning of this month, and will be eager to get out of their contracts as soon as possible – while Plusnet customers will still face these hikes for the time being.
“This move shows there’s nothing stopping other major broadband and mobile firms from following suit to banish unpredictable price hikes as soon as possible. Ofcom must stick to its proposed timeline for implementing a ban, and ensure there are no delays, to prevent more consumers being stung with these unpredictable increases.”
