A MAJOR broadband and mobile provider has confirmed that it has axed “unpredictable” price hikes for millions of mobile, TV and broadband customers.
BT and EE has said it will no longer raise prices mid-contract based on a percentage linked to inflation.
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Prices can still go up, but instead, they will be expressed in pounds and pence, giving customers a clearer idea of how much more they might pay,
The move comes ahead of plans by regulator Ofcom to bring in rules making this compulsory for all providers.
The firm will start showing rises in pounds and pence from now on, instead of percentages for BT and EE customers so they are less unpredictable.
For instance just a few weeks ago on March 31, the firm increased prices by the CPI inflation plus 3.9%.
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As the inflation rate can vary from one month to the next, it means it’s unclear for customers exactly how much that rise is until confirmed.
In EE’s case, the rise was based on December’s inflation data which was released in January.
Inflation was 4% which means the bills increased by 7.9% at the end of last month.
BT Group boss Marc Allera said: “We want to act in line with Ofcom’s guidance to move from percentage figures and CPI-linked changes for our monthly plans and provide certainty for our customers on exactly what their price change will be, and when.”
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The provider said Plusnet, which is also part of BT, is due to implement the same changes this summer.
Ofcom proposed a ban last year on inflation-linked prices imposed on customers mid-contract often without them realising.
Inflation – which is a measure of how quickly prices are rising – has run rampant over the past few years.
According to figures from USwitch, the average broadband customer is set to pay an additional £27.19 per year.
Ofcom launched a consultation into the issue last December concluding that price rises are too confusing for customers.
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For many mobile and broadband customers, this has greatly increased their monthly payments.
It also said that consumers have the right to “shop around with confidence.”
Under the new rules, all broadband and mobile providers will need to declare price increases in pounds and pence.
Ofcom has said it will make a final decision on the consultation in spring this year and new rules will come into force four months later.
Ofcom confirmed that analysis of providers’ data shows that as of April 2023, 11million broadband customers and over half of mobile customers (36million) were on contracts subject to inflation-linked price rises.
Which? has welcomed the news but argues Ofcom must implement the proposed ban swiftly.
Rocio Concha, Which? director of policy and advocacy, said: “It’s positive that new and re-contracting BT and EE customers will no longer have to face unpredictable inflation-linked price hikes.
“However, a lot of existing customers will still be reeling from the inflation-busting hikes they were hit with at the beginning of this month and will be eager to get out of their contracts as soon as possible – while Plusnet customers will still face these hikes for the time being.
“This move shows there’s nothing stopping other major broadband and mobile firms from following suit to banish unpredictable price hikes as soon as possible.
“Ofcom must stick to its proposed timeline for implementing a ban, and ensure there are no delays, to prevent more consumers being stung with these unpredictable increases.”
EE added that new customers and those who renew an EE mobile contract will see an annual increase of £1.50 a month on their bill from March 31, 2025.
Users of connected devices, including laptops, tablets and smartwatches, will see the same increase.
TV customers will have to pay an extra £2 a month and broadband customers £3 a month.
Out-of-bundle services will be subject to an annual 5% increase.
The provider has said those vulnerable customers on EE Basics or BT Home Essentials contracts will be exempt from any price rises.
How can I cut my mobile bill?
Haggle a cheaper deal
If you think your bills are too high and want to drive them down, the first thing to do is find out what the cheapest deal on the market is.
You can use this rate as a bargaining tool to get a better offer from your provider or as inspiration to switch providers.
Sites like MoneySuperMarket and Uswitch all help you customise your search based on price, speed and provider.
Switch provider
If you’re not happy with the new charge and any attempt to haggle didn’t go your way – switching providers can be the best way to save money on your telecom bills.
But if you do want to switch, make sure you know if you’re in or out of contract.
If you’re mid-contract though and wish to leave, bear in mind that you could face an exit fee so check with your provider for any charges.
How to save on your mobile phone bill
NOT happy with your current mobile phone deal?
If you’re outside the minimum term of your contract then you won’t need to pay a cancellation fee – and you might be able to find a cheaper deal elsewhere.
But don’t just switch contracts because the price is cheaper than what you’re currently paying.
Take a look at how many minutes and texts, as well as how much data you’re using, to find out which deal is best for you.
For example, if you’re a heavy internet user it’s worth finding a deal that accomodates this so you don’t end up spending extra on bundles or add-ons each month.
Also note that if you’re still in your contract period, you might be charged an exit fee.
Ready to look elsewhere? Pay-as-you-go deals are better for people who don’t regularly use their phone, while monthly contracts usually work out cheaper for those who do.
It’s worth using comparison websites, such as MoneySupermarket and uSwitch.com, to compare tarrifs and phone prices.
Billmonitor also matches buyers to the best pay-monthly deal based on their previous three months of bills.
It only works if you’re a customer of EE, O2, Three, Vodafone or Tesco Mobile and you’ll need to log in with your online account details.
There’s also MobilePhoneChecker,which has a bill monitoring feature that recommends a tariff based on your monthly usage.
If you’re happy with your provider then it might be worth using your research to haggle a better deal.
Check if you can get a social tariff
If your household is on a low income it’s also worth investigating social tariffs.
These broadband packages and discounts have been created for people who are receiving certain benefits.
They’re often available to those on income support, Universal Credit, or disability allowance.
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Around 4.2million households are eligible for these cheaper tariffs but only 55,000 are making use of them.
Voxi and SMARTY both offer these cheaper mobile phone contracts and prices start at £10 a month.
Do you have a money problem that needs sorting? Get in touch by emailing [email protected].
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