Ofcom confirms exact date for mobile and broadband bill review

Ofcom has set a firm date for banning “confusing” inflation-based price increases in ongoing contracts for mobile and broadband customers. The telecoms regulator is changing regulations to require mobile and broadband providers, including big names such as EE, BT and Vodafone, to specify annual cost increases in clear “pounds and pence” terms to their customers.

This adjustment will affect contracts initiated from 17 January 2025. Under the current framework, mobile and broadband firms are allowed to increase prices during the term of a contract based on inflation rates in March and April, with an additional allowance of up to 3.9%.

The usual benchmarks for setting these increases are the December Consumer Price Index (CPI) or January Retail Price Index (RPI) inflation figures; This year’s increases ranged from 7.9% to 8.8%.

However, consumers have been hit with significant bill increases over the past two years due to high inflation, with some seeing increases of up to 17.3% last year. Earlier in the year, Ofcom expressed concern that many consumers did not fully understand the implications of these escalations for their finances, prompting the watchdog to examine the practice.

In April 2024, Ofcom concluded that around 60% of customers were locked into contracts with such inflation-related price adjustments, the Mirror reports. Recent Ofcom research has shown that a significant majority of broadband customers (55%) and pay-per-month mobile customers (58%) do not understand inflation rates such as CPI and RPI.

A small percentage of broadband customers (16%) and mobile phone users (12%) are aware of and can identify their provider’s price increases as inflation-related. Amid changes in the telecoms industry, BT and Vodafone have updated their approaches and other providers have until January to adjust their contracts.

Cristina Luna-Esteban, director of telecoms policy at Ofcom, said: “With household budgets tight, people need certainty about their monthly spending. But that’s impossible if you’re bound by a contract where the price could change based on something so heavy. to predict future inflation.

“We’re acting on behalf of phone, broadband and pay TV customers to stamp out this practice so people can be sure of the price they’re paying, compare deals more easily and take advantage of the competitive market we have in the UK. .”