Big UK Broadband ISPs Can Now Confirm Huge 2022 Price Hikes

[dutchman]

The Office of National Statistics has today published the latest UK inflation figures, which sees the Consumer Price Index (CPI) hit 5.4% and the Retail Price Index (RPI) reach 7.5%! Many of the country’s biggest broadband ISPs base their annual price rises off the figure published in January, thus we now know how huge the hit will be.

Annual price hikes are of course nothing new in this and other markets. Often there are legitimate reasons for prices to go up, not least because ISPs are frequently adding all sorts of new services (e.g. FTTP), developing new systems, facing higher charges from suppliers, implementing costly new Ofcom rules and consumers are gobbling significantly more data every year. But 2021 was more unusual than most, which is partly due to the rapid return to normal economic activity post-COVID-19 and various other factors.

At the end of last year we warned (here) that the recent surge in inflation, which largely reflects the rising cost of living (i.e. high gas prices, more expensive products etc.), would hit customers of BT, EE, Plusnet, Vodafone, O2, TalkTalk, Shell Energy and others the hardest because of how closely they’ve linked their annual increases to inflation. Lest we forget that such providers have also been affected by rising costs.

Nearly all the aforementioned ISPs typically inform customers that they will increase prices by a set rate of 3.9% (3.7% on Talk Talk and ‘up to’ 3% on ShellEnergy) + the CPI rate of inflation as published in January each year (February for O2, who also happen to use the steeper RPI figure instead of CPI).

Back in December 2021 we predicted that consumers could be facing annual price hikes of around 9%, which are often formally introduced to customer bills from around the March-April period. So where did we end up? This is what customers of the aforementioned providers, and others that link to CPI or RPI, can expect:

Summary of 2022 Price Hikes by CPI Linked UK Telecoms Operators

BT 5.4% CPI + 3.9% = 9.3% Price rise (up from 4.5% last year)

EE 5.4% CPI + 3.9% = 9.3% Price rise

Plusnet 5.4% CPI + 3.9% = 9.3% Price rise

Vodafone 5.4% CPI + 3.9% = 9.3% Price rise

O2 [February RPI rate TBA]

TalkTalk 5.4% CPI + 3.7% = 9.1% Price rise

Shell Energy 5.4% CPI + 3% = 8.4% Price rise

Virgin Mobile (New Customers) [February RPI rate TBA]

No doubt customers of Virgin Mobile and O2 will be particularly worried about next month, given the massive increase in RPI, although the total for that is not too dissimilar to the wider CPI + X% rates being planned by other providers above.

We should point out that the % price rises predicted above should be seen more as an average, with the increases for particular packages and services tending to vary.

[rebbonk]

Society has been driven to rely on the internet during the scurrilous restrictions that were placed on it by a government that hadn't got a clue (except about how they would line their supporters' pockets!). I forecast that we will get many smaller ISPs spring up that will disrupt the current market.

[dutchman]

I just paid 12 months in advance for mine and got a huge discount compared to paying monthly.