Ofcom has rolled out new consumer protection rules requiring telecom providers to clearly state any future price rises in pounds and pence in their contracts. This move is set to provide customers with more certainty and transparency about their telecom bills.
Why the Change?
In recent years, many UK phone, broadband, and pay TV companies have linked price rises to future inflation rates. This practice has left customers uncertain about their bills and unfairly burdened by unpredictable inflation.
Starting January 2025, any price increases in customer contracts must be clearly outlined in pounds and pence at the point of sale. Providers must also specify when these price changes will occur.
What This Means for Customers
With these new rules, customers will no longer be caught off guard by unexpected price hikes. Instead, they will have a clear understanding of their monthly costs, making it easier to compare deals and make informed decisions.
Cristina Luna-Esteban, Ofcom Telecoms Policy Director, explained, “We’re stepping in on behalf of phone, broadband, and pay TV customers to stamp out this practice. People can be certain of the price they will pay, compare deals more easily, and take advantage of the competitive market we have in the UK.”
The Competitive Landscape
Over the past five years, the UK’s competitive telecom market has driven down average prices for broadband and mobile services, even as companies have invested heavily in upgrading their networks. Full fibre availability has increased tenfold, and average speeds and data usage have doubled.
Current Rules and Future Changes
Under current rules, providers must notify customers of any price increases at the start of the contract. If they fail to do so, they must give customers one month’s notice and allow them to exit the contract penalty-free.
However, with the new rules effective from January 2025, telecom companies will no longer be able to include inflation-linked or percentage-based price rise terms in new contracts. This change ensures that consumers will have clear and predictable pricing information.
Some providers, like BT and Vodafone, have already started implementing these changes ahead of the deadline.
Industry Impact
This shift aims to enhance consumer confidence and transparency in the telecom market, ensuring that customers can shop around without worrying about unexpected price hikes.
Many ISPs who operate with alternative networks have pushed for this policy, and others launched with 30-day rolling contracts, with no mid-contract increases, from the very start. Cuckoo is a great example of this.
Sarah Howells, Managing Director at Cuckoo, has added her views on the matter: “This ban from Ofcom is long overdue, and we welcome the move, however at Cuckoo we’ve taken this one step further. Yes, bringing more transparency to these increases is key to avoid consumer confusion, but at Cuckoo we’ve never raised prices mid-contract.
“Mid-contract price rises are a tactic that the big six broadband providers have been using for years, leaving customers confused and shortchanged.
“Major providers are still squeezing consumers unfairly. While a number of brands have moved to comply ahead of the Ofcom guidance by clearly communicating their mid contract price rises in ‘pounds and pence’, at the end of the day they are still raising prices mid-contract, and these increases will differ depending on who your provider is”
“Imagine you buy a ticket for a football match, but then at halftime you’re told you’ll have to pay more to watch the second-half – and then you’re fined if you want to leave.
“As an industry broadband needs to be more transparent, more customer focused and fairer. It’s something we’re striving to do at Cuckoo. Today’s Ofcom ban is a welcome step in the right direction, but mid-contract price rises are bad full-stop.”
