Telecoms price rises – what are your rights?


INSIGHT
Published
Jul 19th '23
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Published: 20 January 2023 | Last updated: 19 July 2024

 

Sometimes customers can see their home phone, mobile, broadband and pay TV bills rise.

 

Telecoms contracts often include terms that increase the main monthly price during the customer’s contract period. These price rises usually happen once a year in March or April.

 

In recent years, many providers have linked these in-contract price rises to inflation.

 

However, from 17 January 2025, Ofcom rules will ban providers from signing up customers to new contracts that include price rises linked to inflation or that are set out in percentages.

 

Instead, new and renewed contracts must set out clearly in pounds and pence exactly what customers will pay throughout their contract period. Any price rises must be clear before the customer signs up. The provider must also say when any increases to the main monthly price will take place.

 

Contracts signed before 17 January 2025 might include inflation-linked terms.

 

Some providers tell customers that prices might go up during the contract, but don’t specify in advance what the price rise will be. In these cases, customers have the right to exit without being penalised if the price goes up.

 

Providers might also increase the main monthly price when your contract ends. To get the best deal when a contract ends, customers should re-contract or shop around for another provider.

 

What providers must do

Providers that include prices rises in their contracts must make this clear before you sign up.

 

If you don’t think your provider did this, you should complain to them. If you’re not happy with how they deal with your complaint, you can take your complaint to the ombudsman who will make an independent ruling on your case. In addition to this, while Ofcom cannot investigate individual complaints, highlighting problems to Ofcom plays a vital part in their work and they might investigate a company if monitoring reveals a particular problem.

 

If your contract doesn’t specify by how much the price might rise and your provider raises the price – or if your provider raises the price by more than what is specified in your contract – you are free to exit that contract and sign up to a new one, or move to another provider, without being penalised. The provider should tell you about a price increase, or any other change that is not to your benefit, 30 days before it happens.

 

If you sign up to a telecoms contract before 17 January 2025, it might include increases to the main monthly price that are linked to inflation. After this date, providers will not be allowed to sign customers up to new or renewed contracts that link increases to the main monthly price to inflation or set them out in percentages.

 

Why do price rises happen?

Ofcom does not set the prices that customers pay for their services. Instead, they support competition in the telecoms sector, as this provides choice for customers with a range of providers, services and packages on offer. This competition leads to providers offering discounts to attract new customers.

 

It’s also important to remember that while average household spend on telecoms services has been broadly flat in recent years, at the same time customers have benefited from better, faster services and are using more data than ever before.

 

And as demand for data , the UK’s broadband and mobile infrastructure is getting a much-needed upgrade. This requires significant investment from telecoms companies, who are also increasing the ability of their networks to accommodate increasing data use.

 

Ofcom regulate wholesale telecoms prices in a way that’s aimed at helping companies to build these faster, more reliable networks. In total, next-generation ‘gigabit-capable’ broadband is now available to 80% of the UK – 24 million homes – and around 92% of UK properties are able to get a 5G signal outdoors from at least one mobile network operator.

 

What you can do

 

If you are on an inflation-linked contract

If you signed up to a contract before 17 January 2025, it might include increases to the main monthly price that are linked to inflation.

 

Once your contract ends, you can ask your provider for new terms that do not include these inflation-linked price rises. You could also shop around for a better deal with another provider.

 

If you want to end the contract early, you may have to pay a fee. This should be set out in your contract.

 

If you are out of contract

If your contract period has ended, you can sign up to a new contract or without any exit fees.

 

Some providers already offer contracts that guarantee the main monthly price will not rise during the contract period. If you’re looking for one of these contracts, use a price comparison tool to find the best deal and terms that meets your needs.

 

Unsure if you’re out of contract? Ofcom has a short guide to help you check.

 

Benefits and social tariffs

If you receive certain benefits, you could be eligible for a social tariff. Social tariffs are cheaper broadband and phone packages for people claiming Universal Credit, Pension Credit and some other benefits.

 

Social tariffs don’t have in-contract price rises or exit fees, making them more flexible.

 

If you are currently in a contract, you could ask your provider if they offer a social tariff you can switch to. If your provider offers a social tariff and you are eligible, you should be able to switch to it at any time, free of charge.

 

More ways to save money

Ofcom has put together some tips to cut your telecoms costs. See if they could help you.

 

What small businesses can do

 

If you are buying services for a small business or not-for-profit

From 17 January 2025, Ofcom rules will require providers to set out clearly to these customers, in pounds and pence, what main monthly price they will pay throughout the contract period, before they sign up. However, Ofcom know that some small business customers prefer to negotiate the details of their contract with their provider and agree terms that best meet their needs, including terms covering price increases. The rules allow for small business customers to agree to other kinds of price rise terms, if they wish.

 

More information on telecoms contracts for small businesses.

 

Source: Office of Communications (Ofcom)

 

About Ofcom

Ofcom is the regulator for the communications services that all we use and rely on each day.

 

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