Bonkers billing: what’s going on with broadband and mobile price hikes

At the start of this new financial year people are bracing for further rises in inflation and soaring costs for basic goods and services.

With so much going on it can be hard to make sense of confusingly high bills and what precisely we are being charged for and why. 

In this article, we explain a growing scandal in the broadband and mobile sector, where extreme price hikes are squeezing households that are already under immense pressure. 

A broadband and mobile billing scandal

Like everything else, the price of broadband and mobile services is going up and up… and up! But this month may bring a particularly nasty shock to customers. 

In many broadband and mobile phone contracts there is a clause that states that a firm can increase their rates in April, regardless of whether a customer is only part-way through their contract. Such practices could not happen with your mortgage provider or car insurer, but it is a peculiarity of the telecoms sector that millions of households will now be feeling. 

When getting your broadband or mobile bill this month, you may be facing a rise of more than 14%, with reports of some price hikes as high as 17.3%. The explanation given to you is likely to be some variation of ‘needing to keep up with inflation to ensure that we can provide the best service possible.’ However, a closer look makes it clear that broadband providers are actually charging extra on top of inflation. 

The recognised measure of inflation is the consumer price index. But the amount that broadband bills are being raised by is not in line with this. In fact, there is another measure, known as the retail price index. This is much higher and seems to be how firms are calculating their price hikes.  

A big squeeze

In short, not only are consumers being expected to absorb the rising costs of living but broadband and mobile customers are now being further squeezed to ensure big firms’ profitability.

Unfortunately, even if you decide to leave your current provider you are likely to be faced with a huge charge to pay as a penalty for leaving your contract early.

These penalty charges can be hundreds of pounds and are yet another practice that people are speaking out against at a time when those trying to find affordable broadband and mobile rates would otherwise change their provider. 

As became clear in the Covid-19 pandemic, having a reliable internet connection is not about luxury or leisure but is an essential part of people’s home and work lives.

While the UK government and the regulator Ofcom have not taken any action to scrutinise or prevent these unjustified price hikes, when you get to the end of your contract you may want to consider switching to a provider who is not complicit with this squeeze on customers who are already struggling. 

If you have any thoughts on this topic, or any other consumer issues you would like us to cover, feel free to get in touch with us at support@resolver.co.uk