Broadband ISP Plusnet to Introduce New UK Price Hikes Policy
Low-cost focused UK broadband ISP Plusnet, which is a BT Group (EE) sibling, is to follow their parents by introducing a new pricing model, which moves away from the old percentage (%) figures and inflation (CPI) approach to annual price hikes. Instead, from 9th July 2024, they’ll introduce a “clear and simple” view of future price rises, expressed in “pounds and pence“.
The change is designed to reflect Ofcom’s recent move to BAN broadband ISPs and mobile operators from doing mid-contract price hikes that are linked to confusing inflation and percentage-based changes (here). But the regulator’s change was never designed to stop mid-contract hikes (i.e. it’s more about making future package pricing clearer and simpler), which means that providers must now tell customers precisely what any future price increases will be when they sign up (“in pounds and pence“).
The first broadband and mobile providers to announce their intention to adopt this approach became BT and EE during April 2024 (here), although at the time it was stated that sibling broadband ISP Plusnet would, for whatever reason, “follow later this summer.” As expected, Plusnet has now revealed when they’ll introduce the same change.
For all new contracts signed up on or after 9th July 2024, a price rise of +£3 per month will be effective each March from 2025 onwards. Existing customers who want to re-contract their package will also become subject to the same change of terms / pricing policy (if you don’t re-contract and joined before this date, then the old CPI + 3.9% terms will still apply). Finally, out of bundle services will increase by 5% on 31st March each year (these aren’t covered by Ofcom’s policy).
A Plusnet spokesperson told ISPreview:
“Our focus is to provide Plusnet customers straightforward broadband at straightforward prices. From the 9th July 2024, we will be introducing a pricing model aligned with Ofcom’s approach, offering our customers a predictable long-term view of their contract terms. These new contracts will make it simpler for our customers and provide more certainty on what annual price changes will be.”
We are very supportive of Ofcom’s recommendation to show upfront pounds and pence amounts for price change and remain committed to supporting all our customers, especially those who are financially vulnerable.”
On the one hand this approach, which other providers will have to adopt too, is clearer. But on the other hand, it does still continue an approach that will most likely see new and re-contracting customers being hit with an above inflation increase in their monthly prices (i.e. given how quickly inflation has fallen in the past year and the presumption of it staying low by March 2025).
In addition, the £3 increase seems to apply no matter how much you’re paying today (i.e. it doesn’t scale with different monthly rentals), which effectively means that it will hit those on the cheapest and often slowest packages the most.
Admittedly, this does help to protect ISPs from the inherent difficulty of trying to balance mid-term price rises against unknown increases in future network costs and inflation, but it’s also unlikely to damped calls from those who believe there should be an outright ban on mid-contract hikes – something we’d support. Speaking of which, if broadband ISPs can now predict this, then it arguably increases the case for just baking the hikes into a fixed price contract.
However, it’s worth remembering that not all providers adopt the same approach as the biggest players and many smaller ISPs, particularly newer alternative networks, often already promote packages with simple fixed price terms.
Mark is a professional technology writer, IT consultant and computer engineer from Dorset (England), he also founded ISPreview in 1999 and enjoys analysing the latest telecoms and broadband developments. Find me on X (Twitter), Mastodon, Facebook and Linkedin.
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£3 a year?? That’s more than a 10% increase every year for a 80mbps down product.
I think this is a failure in regulation. This will only drive inflation higher if the rate doesn’t change.
Yes I totally agree that it’s a failure in regulation… if they can fix the increases for two years they can offer a fixed price contract. It’s a con by the ISP just to squeeze more money out of customers… they are effectively still hiding the average monthly price (the customer has to do the maths to work out what the average monthly costs will be, but at least they can do it now.)
Any contract over 12 months should be fixed price, and really anything 12 month and under should be too.
They’re just copying BT and EE’s price rises. IMO it’s not a failure in regulation — it’s for customers to decide if they want a fixed price or a (predictable) increasing price.
The price rises are just pathetic and companies have proven that they’re completely unnecessary, take Yayzi, no price rises for 3 years, they’re not struggling at all
Mobile example would be giffgaff, they’re also not doing rises
How about banning the mid contract price hikes altogether?
Currently, the broadband contract lengths are getting longer and longer. Essentially locking you in to prevent you from finding a better deal and moving away. They dangle a cheap contract price at the beginning and then they lock you in.
If the Ofcom was to ban the mid contract price rises I believe the providers would think twice about offering long term contract and would instead need to offer new prices every year. This would result in people being able to switch on a yearly basis and there would be more competition thus cheaper prices.
There are providers offering 12 month contracts and / or contracts without price increases. Choose one of them if that would make you happier.
And some providers offering 1-month contracts. The usual suspects like Andrews & Arnold and IDnet
‘…then it arguably increases the case for just baking the hikes into a fixed price contract.’
So instead of £20 this year, £25 next year, just charge £22.50 for two years?
They will never do that. When we launched New (sic) EE last year, we offered the first 3 months free. It was wildly popular but if you did the maths, you then paid more over the next 21 months than you did over 24 months of the concurrent BT/old EE pricing (and then had a higher base for the %-based price rise as well).
People only ever look at the headline price and ignore the small print. After all, £9.99 is so much cheaper than £10, yes??
How about a crazy idea.. we go back to fixed price contracts being fixed… None of this “we can increase your prices but you can’t do anything about it” rubbish.
12 months contracts would be nice too…
Monopolistic barstewards
Roll-on HamWans as in the states.
What’s stopping them from keeping prices fixed for duration of contract, even more so what stopped Ofcom from enforcing it that way?
Cant help but feel Ofcom probably ask around the group what they would find acceptable before making decisions, it all feels far too cosy.