UK mobile and broadband firms plan huge price rise for existing customers

theguardian.com:

Britain’s biggest telecoms providers are preparing to launch inflation-busting price increases for broadband and mobile contracts this spring, hitting consumers with a combined bill worth £600m more than if these deals had matched the cost of living.

BT, EE, Vodafone, Virgin Media, O2 and TalkTalk are to increase bills for tens of millions of customers under “mid-contract price rises” from April and May.

The telecoms firms use a range of methods to ratchet up the annual cost of bills to take account of inflation part way through an agreed fixed term, in a practice not allowed in other utility sectors such as electricity and gas.

With the consumer price index (CPI) measure of inflation at 10.5%, charities are warning that millions of people will face unaffordable price increases this spring.

Official figures on Wednesday are expected to show that inflation fell to about 10.2% in January, although it will remain among the highest rates in four decades.

Some telecoms providers also use the retail price index (RPI) measure of inflation, which is typically higher. Many firms are set to increase prices above inflation, with some adding up to 3.9 percentage points on top of the official rate.

BT and Vodafone add 3.9 percentage points to the rate of the December CPI. Virgin Media is pushing through an average 13.8% rise, although customers will have a month to decide whether they want to leave.

This week O2 will reveal the scale of its price rise, which is based on January’s RPI plus 3.9 percentage points. Given RPI in December was 13.4%, a typical customer could be facing a 17%-plus annual rise. The company said the real increase would be closer to 9-10% as it applied to calls and data only, not the significant cost of payments for