How to beat broadband and mobile phone price rises

Households across the UK are set to be hit with yet another bill increase as broadband and mobile phone prices soar.

Providers including BT, EE, O2, Plusnet, Shell, Sky TalkTalk, Three, Virgin Media and Vodafone are hiking prices by up to 17.3% from April. And with average internet bills already at around £40 per month, “millions” of customers can expect to pay almost £100 more than “they had bargained” for during their contract, said the Daily Mail.

Many customers are trapped in “a lose-lose situation”, consumer watchdog Which? warned, and face a choice of either accepting "exorbitant mid-contract price increases" or paying exit fees that can be more than £200. But there may be ways to help cut how much you pay out.

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Why broadband and mobile prices are going up

The hikes come amid council tax increases, rising interest rates on mortgages and higher energy prices that have hit people and businesses nationwide.

Some broadband and internet providers are blaming their price hikes on “underlying and operating costs going up substantially as a result of regulatory requirements, higher energy prices and increased network costs”, said MoneySavingExpert.

Providers can increase their prices mid-contract “by the rate of inflation plus an extra amount on top (usually around 4 percentage points), as set out in their terms and conditions”, the site explained.

And “they may use the higher Retail Price Index (RPI) rate of inflation”, said The Money Edit, rather than the “slightly lower and more commonly used” Consumer Prices Index CPI).

How much are prices increasing by?

Most affected customers will see their price increase by around 14%, Which? reported. The broadband bills of many of these customers increased by almost 10% last year, so “this is another blow for those looking to keep spiralling costs under control”, the site said.

Price rises vary by provider and the type of product and contract. But since “almost all of the biggest providers” are using either the December CPI or the January RPI rate of inflation for their price rise calculations, said MoneySavingExpert, “we know the exact price hikes most providers will implement”.

For example, 02 pay-monthly and Sim-only users with mobiles, tablets and/or smart watches who took out a deal or upgraded on or after 25 March 2021 face increases of up to 17.3%, while the increase for those who had deals before then is up to 13.4%.

Virgin Mobile users may also be hit with hikes of up by 17.3%, while Virgin Media broadband and TV customers face an average increase of 13.8%.

How to find the best mobile and broadband deals

Mid-contract price increases are applied to affected customers' bills “even if they are within their minimum contract period”, Which? said. And because providers “have to let you know that your price will rise when you take out a new contract“, the hikes are included in the terms and conditions, so customers now have “little choice but to accept” them or face paying an “eye-watering” exit fee.

Industry regulator Ofcom recently launched an investigation into mid-contract price hikes,“amid concerns telecoms providers aren’t being clear enough about what customers can expect to pay” over the course of their plans, said MoneySavingExpert.

There may be a way out for some customers in the meantime though. Under Ofcom rules, said The Money Edit, if your provider “tries to impose a price rise that’s more than it says in your contract, or if there’s nothing in your contract about price increases”, you can “leave penalty-free”.

Millions of customers may also be out of contract, said MoneySavingExpert, and have been automatically rolled on to “often pricier tariffs” without signing up for them. “If that’s you, you can leave at any point penalty-free – and given the best broadband and mobile deals tend to be for newbies, there’s a good chance you’re overpaying anyway.”

So check prices elsewhere and switch if you can get a cheaper deal. Before swapping, however, it may be worth trying to haggle with your current provider.

Whether you’re likely to successfully negotiate a better deal “depends heavily on which provider you’re with”, said price comparison site Cable.co.uk. Sky, for example, is “renowned for giving a little ground to customers they want to keep”, but BT reportedly “has a bit of a reputation for saying no”.

But regardless of who you are with, “this is still the best thing to try” if you want to stay put, the site added, “since no provider will let an existing customer switch onto a new-customer deal”.

People on low incomes should also check whether they qualify for discounted deals, known as social tariffs, for broadband and phone packages. For example, Three has a social tariff for mobile phones that “could save customers over £200 a year”, according to The Money Edit.