UK broadband customers could see price increases of £113 next year, warns Which?

Costs for millions of broadband consumers to climb by 14% mid-contract

The cost of broadband in the UK could rise by up to £113 in the next year, according to consumer group Which?.

The increase will occur if the UK's biggest telecom firms decide to go ahead with inflation-busting pricing increase in 2023, including for customers who already have a contract.

Many of the major ISPs in the UK, including BT, Vodafone, EE, TalkTalk and PlusNet, currently have mechanisms in place that automatically raise customer fees each year by the amount of inflation, as determined by the January consumer prices index (CPI), plus 3.9%.

According to the Bank of England, inflation will be slightly over 10% in January 2023, which will cause costs for millions of broadband consumers to climb by 14% mid-contract.

The latest broadband survey by Which? found that a typical BT subscriber would see the biggest increase—a rise of £113—over what they were paying in January 2022. This would be closely followed by EE customers who could incur an additional cost of £105.46.

Customers of TalkTalk and Vodafone might pay an additional £90.15 and £92.35 per year, respectively.

Plusnet, which is owned by BT, is likely to have the smallest hike of £87.15.

These changes, if they happen, would follow hefty price hikes that broadband customers have already been subjected to in 2022. According to Which?, the average BT customer saw their broadband prices rise by £42.93. Other customers saw their bills rise too: EE fees saw the next largest rise at £40.04, followed by Vodafone (£35.06), TalkTalk (£34.11) and Plusnet (£33.09).

The increases means an average customer on a two-year contract with these companies may wind up paying as much as £120 to £156 more than they initially agreed to when signing up, by the time the next round of price increases takes place in 2024.

The telecoms regulator Ofcom has advised ISPs to "think hard" before continuing to make significant price increases "when the finances of their customers are under such pressure." The regulator has reported that a record 8 million households have already experienced difficulty paying their telecoms bills.

Which? is also urging all broadband providers to carefully assess the level of price increase that can be justified in the current economic environment, and to permit customers to leave their contract and switch to another provider without incurring penalties if prices are increased in the middle of a contract.

The group says it would also like to see the government lower VAT on telecommunication services (broadband, mobile, and landline) to bring it in line with those of other essential services.

"We also believe that no VAT should be applied to social tariffs," Which? said.

"If the big providers cancelled their planned price rises in 2023 and there was a VAT reduction on broadband bills, customers could save between £102 and £133 as a result, depending on their broadband provider."