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We expect the cost of millions of mobile phone and broadband contracts to skyrocket, with the poorest users facing the steepest price increases of up to 11%.
This year, mobile phone and internet users faced rip-off price increases of up to 7.9% as carriers passed on the cost of inflation, typically with an additional 3.9%.
However, the bill increases that broadband and mobile phone providers like BT, EE, and Vodafone already anticipate will dwarf those price increases for some customers.
Last week, regulator Ofcom banned inflation-linked price increases beginning January 17, 2025, claiming they caught many customers off guard.
Instead, phone and broadband service providers must prominently display mid-term price increases in pounds and pence.
Ofcom did not set any restrictions on how much these companies may charge.
As a result, many broadband and mobile phone companies have already adopted their interpretation of the new system, which predicts even bigger mid-term price increases than the old one.
So far, all of the communications companies that have announced price changes have switched to a flat fee, essentially a poll tax in which everyone pays the same amount regardless of the cost of their cell phone or broadband plan.
The concern is that individuals on lower-cost cell and internet plans, who are more likely to be low-income, will experience proportionally harsher price increases than those on higher-cost plans.
James McQuillan, the country manager for Lyca Mobile UK & Ireland, stated: “Providers will now charge customers a flat increase in ‘pounds and pence’ rather than ‘3.9 percent plus inflation,” putting those on lower-cost agreements in danger of paying even more.
For example, an across-the-board £1.80 increase is much less for someone paying £40 per month than for someone spending only £10.
‘Customers may no longer be concerned about surprise price hikes, but flat price increases will have an equal impact.’
Here’s how every major phone and broadband provider plans to increase their prices—at least those that have already made an announcement.
In mobile phone arrangements, the portion of the bill that increases mid-contract, not the handset cost.
Mobile phone bills grow.
Vodafone charges £1.80.
This implies that someone on the cheapest Vodafone package, a Dorro 8100 at £18 per month, will experience a 10% increase.
Someone on the most costly package, a Samsung Galaxy ZFold5 with international roaming for £90 per month, would only notice a 2% increase.
EE: £1.50
This means someone on a cheaper EE mobile plan, such as a Motorola G14 for £15 per month, will experience a 10% price increase.
Someone with a Samsung Galaxy Z Fold6, which costs £69.88 a month, would pay 2.14 percent more.
EE offers fixed-price contracts with no mid-term cost increases.
Major mobile phone companies O2 and Three continue to raise their prices in line with inflation. Sky Mobile also implements annual price increases, albeit independent of inflation.
Some providers, such as Lyca Mobile, do not raise pricing in the middle of a contract.
Broadband prices grow.
Internet deal rates vary depending on your location in the country.
EE: £3
This level of price increase means that a 37MB/s download speed internet contract on the lower end of the EE spectrum, which costs £29.99 per month, will jump by around 10%.
A more expensive option, such as a gigabit contract with 900MB/s for £44.99, would increase in price by 6.6%.
PlusNet: £3
This implies that a plan priced at £25.99 per month, one of Plusnet’s cheapest alternatives, will increase in price by 11.5%.
A more premium full-fiber 900 plan, priced at £37.99 per month, would increase by 7.8%.
Inflation affects the costs of Virgin Media and TalkTalk’s broadband plans, but Sky sets its own price increases independently of inflation.
Many smaller broadband providers, such as Cuckoo, Hyperoptic, and Zen Internet, do not change their pricing mid-term.
An Ofcom representative stated: “Inflation may be low now, but as we’ve seen in recent years, it can be extremely volatile, and we don’t believe consumers should bear that risk.”
‘Our intervention ensures that clients have certainty and clarity about the costs they will pay, allowing them to compare options and choose the best deal for them.
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‘For those receiving certain benefits, there are less expensive packages known as social tariffs, which do not include any mid-contract price increases.’
What do corporations say?
A Vodafone representative stated, “In line with Ofcom’s consultation, we are moving away from inflation-linked price increases for our consumer customers and some small business customers beginning July 2, 2024.
We will inform a customer of the exact cost of their contract in pounds and pence, along with the date of the price increase, before they enter into a new contract or re-contract with us.
‘We’ve created two new mobile tiers, with a more equitable, lower price increase of £1.00 per month for our Basics plans. Our commitment to supporting disadvantaged consumers is evident in our decision not to raise costs for our social tariffs or clients identified as financially vulnerable.
Ofcom regulations prohibit mobile phone companies from increasing social tariff costs mid-term, and they mandate proper treatment of the vulnerable.
