Broadband customers '£450 worse-off' due to above-inflation price hikes: 'Virgin Media and O2 are the worst'

Broadband customers '£450 worse-off' due to above-inflation price hikes: 'Virgin Media and O2 are the worst'

Inflation rose to four per cent for the 12 months to December 2023

GB NEWS
Patrick O'Donnell

By Patrick O'Donnell


Published: 19/01/2024

- 18:09

Broadband bills are set to rise even further in April in a blow to struggling customers

Broadband customers were “£450 worse-off” during the cost of living crisis due to above inflation price hikes, according to new analysis.

Virgin Media, O2 and BT are among the firms under fire for raising prices on families during a turbulent economic time.


Bills are expected to rise even further in April with suppliers choosing to base rate increases on either the Consumer Price Index (CPI) or Retail Price Index (RPI) rates of inflation.

BT and EE are set to raise prices by up to 7.9 per cent which is based on December’s CPI inflation rate plus 3.9 per cent.

Virgin Media and O2 logos and woman looking stressed at broadband bill

Broadband suppliers are under fire for raising prices during the cost of living crisis

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In comparison, O2 and Virgin Media will hike prices based on the RPI rate for January which is yet to be announced, with 3.9 per cent also added. Experts at money saver platform http://Nous.co warned that households have already lost £450 over the last two years.

The firm’s CEO and cofounder Greg Marsh described the price increases from broadband and mobile companies as “despicable”. The savings expert highlighted that consumers trapped in pricey contracts have lost £450 during the cost of living crisis.

He explained: “It’s cynical, it’s grasping and it’s immoral. Virgin Media and O2 are the worst – they base their price rises on the higher RPI inflation figure in order to charge customers even more.

“On top of that, customers are often locked into these more expensive contracts and face extortionate exit fees if they want to leave. Our Nous analysis suggests that a typical household is more than £450 worse off over the last two years as a result.

“Ofcom needs to speed up their work to crack down on this unfair behaviour, and suppliers should do the right thing and cancel this year’s price rises.”

Last month, the media regulator proposed a ban on inflation-hiked price rises during the middle of broadband and mobile phone contracts. Telecoms consumers have to be informed upfront in pounds and pence about any price rises their provider includes in their contract, under new consumer protection plans by Ofcom.

On EE and BT’s price hikes, Marc Allera, the CEO of BT Group’s Consumer division, said: “Our annual price change is never an easy conversation to have with customers, particularly when so many people are dealing with the increasing cost of living.

“But it is a necessary conversation to have to help us manage our own rising costs and investments we’re making into networks and customer service, while also protecting those customers in vulnerable circumstances, suffering from financial hardship or digital exclusion.”

Man helps set-up a new broadband connection for a customer

Expect to see your monthly broadband bills rise in the coming months

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A spokesperson for Virgin Media and O2 told GB News: “Unlike many other providers who use the CPI figure published earlier this week to calculate customers’ price increases, we will be using the RPI number published in February.

“As such, nothing has changed for our customers this week. I’m happy to provide more details and a comment on how our customers may be impacted once next month’s inflation figures are published. Until then, anything else in terms of numbers would be simply speculation.

“It’s worth noting that many, including vulnerable customers on our Talk Protected landline plans or social broadband tariffs, will be exempt from any price increase this year. And on the mobile side, unlike many other providers we only apply price increases to customers’ airtime plans, not their device plans.

“This means that the average effective price increase for O2 customers will be lower than the headline RPI amount. For example, last year the effective rate was in fact below inflation whereas other providers were pushing through bigger, above-inflation increases.

“We are always fully open and transparent with our customers and, once February’s inflation figures are published, will be writing to them directly to explain when, why and how any price increases may come into effect.”

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