Jan 2023 Inflation Figures Confirm Huge UK Broadband Price Hikes UPDATE

Most of the major UK broadband ISPs can now confirm how much their annual price hikes will be after the Office of National Statistics (ONS) published their latest UK inflation figures, which saw the Consumer Price Index (CPI) hit 10.5% (up from 5.4% in Jan 2022) and the Retail Price Index (RPI) reach 13.4% (up from 7.5%).

In case anybody has forgotten. Most of the biggest broadband, phone and mobile providers tend to base their annual price rises off inflation figures – CPI or RPI – as “published” in January each year (this is actually the rate for December), which is then introduced to consumer bills between March and April of that same year. The exceptions being, at least for now, Sky Broadband and Virgin Media, which adopt a different approach.

For example, BT, EE, Plusnet and Vodafone all adopt a policy that says their average prices will rise by the level of CPI inflation, as published in January, plus an additional 3.9% (plus 3.7% on TalkTalk and “up to” 3% on Shell Energy). But a few others, such as O2 and Virgin Mobile, adopt the steeper RPI rate, as published in February, plus the usual 3.9% (i.e. we’ll have to wait until next month to know the figure for them).

Suffice to say, the new CPI rate of 10.5% means that those providers adopting the CPI + 3.9% policy will shortly be increasing their prices, on average, by 14.4% (up from 9.3% last year). The only good news here is that inflation has been falling for the past couple of months (i.e. CPI peaked at 11.1% in October and so did RPI at 14.2%), thus the latest CPI rate is down again from 10.7% last month (14% for RPI) and it’s expected to keep falling.

Confirmed 2023 Price Hikes % for UK Telecoms Providers

BT 10.5% CPI + 3.9% = 14.4%

EE 10.5% CPI + 3.9% = 14.4%

Plusnet 10.5% CPI + 3.9% = 14.4%

Vodafone 10.5% CPI + 3.9% = 14.4%

O2 / Virgin Mobile = TBA (February Announced RPI + 3.9%)

TalkTalk 10.5% CPI + 3.7% = 14.2%

Shell Energy 10.5% CPI + 3% = 13.5%

Three UK 10.5% CPI + 3.9% = 14.4%

Naturally, if you’re already outside your existing contract term, then the best way to save money is to switch ISP (where viable alternatives exist). But those who are happy with the service they receive, or who perhaps have no other viable options, may prefer to try haggling for a lower price when the hike hits (Retentions – Tips for Cutting Your Broadband Bill), although your mileage may vary (it’s mostly the big ISPs that engage in haggling).

Alternatively, there are a lot of smaller ISPs out there that only very rarely increase their prices, if at all, and quite a few of those have also adopted price freezes. In particular, if you’ve recently been covered by a new alternative full fibre (FTTP) network, then the aggressive market competition that currently exists often ensures that your prices should remain low.

Finally, those who are on benefits (Universal Credit etc.) may also have the option of taking a cheaper Social Tariff, which is another way to cut your costs – see our article on this: A Quick Guide to UK Social Tariffs – Getting Broadband for £15. But you won’t always be able to access the fastest speeds or most advanced routers / service features with a social tariff.

In playing devil’s advocate, it’s also important to point out that broadband and mobile operators are NOT immune to cost increases. Most ISPs are suffering under the burden of rising supplier and lease costs, as well as energy prices and the ever-rising levels of consumer demand for data.

Internet providers are also frequently adding all sorts of new services (e.g. FTTP), developing new systems, adopting new networks and implementing costly new Ofcom rules, which means that price hikes, especially in a market of extremely high inflation, are hard to avoid. But if you really want to fight against this, then vote with your feet and switch, if you can.

UPDATE 10:59am

We’ve had a response from Ofcom on all this.

An Ofcom spokesperson said:

“While Ofcom doesn’t set retail prices, companies must treat customers fairly – particularly during an exceptional period of hardship for many households. Our rules are clear: everyone must be told upfront about any future price rises before they sign up, and we’re investigating whether phone and broadband firms are sticking to this.

We’re also concerned about the transparency of inflation-linked price rises in contracts, and how well they’re understood. We’re examining this issue to ensure customers’ interests are protected.”