UK broadband industry to see huge increases in tariffs in April 2023

Days after regulator begins scheme to make service switching easier, majority of UK’s largest broadband providers announce double-digit price increases in April 2023 leading to calls that UK broadband is broken.

Just as they were having to deal with substantial inconvenience due to two major network outages, Virgin Media broadband users were hit again on 4 April when their supplier announced a 13.8% increase in broadband prices this April – a figure that is in line with that of other major UK providers, according to home services price comparison firm

In recent weeks, the impact of crippling, 40-year-high inflation on the broadband industry has come to the fore, with all of the sector’s firms pushing through price hikes as high as 14.4% from April. This latter figure is what Uswitch said would be seen by customers of Vodafone, BT, PlusNet and EE. However, in its research, Uswitch noted that EE customers had experienced some of the most consistent bills on the market – out-of-contract deals have not been changed at all in the past two years, while in-contract customers have seen just one change on average, less than a fifth of those at PlusNet (5.2) and a quarter of those at BT (4).

In contrast, Vodafone customers have seen an average of 7.6 alterations in the past 24 months, and in-contract customers will also face a significant increase this year, as prices go up by 14.4%, costing an estimated additional £60 a year for Vodafone’s fastest broadband package.

TalkTalk and Gigaclear customers will see increases of 14.2% and 14% respectively, while Virgin Media’s 13.8% increase is almost matched by Community Fibre (13%). Some way behind was Sky, at 8%. Now Broadband and Zen Internet announced no April 2023 price increases.

The hikes come as UK communications regulator Ofcom initiated its One Touch Switch broadband programme, which is designed to make switching providers easier so customers can swiftly move to a cheaper deal, a faster package or change if they’re unhappy with their broadband service.

Ofcom assures that under the One Touch Switch process, broadband subscribers will only need to contact a new home broadband provider to switch, without needing to speak to their current provider before making the move. The process will apply to all UK home broadband users, including cable and full-fibre customers. This means users could switch between different networks or technologies – for example, from a provider using the Openreach network to one using CityFibre, or from Virgin Media to Hyperoptic – allowing them to take advantage of more competitive deals.

Yet as prices were going up among the large suppliers, full-fibre altnet 4th Utility announced it was dropping its prices, specifically reducing the cost of its Social Tariff to £13.99 a month.

“There should be better access to more affordable options for everyone... If you cannot consistently deliver high quality for the price you are charging, then the consumer should not be expected to continue paying when there are better options out there”
Tony Hughes, 4th Utility

“Digital inclusivity is hugely important in helping reduce the digital divide across the nation. That’s why it is vital broadband providers offer competitive prices and initiatives like a Social Tariff for consumers on lower incomes,” said the company’s CEO, Tony Hughes.

“At 4th Utility, we believe there should be better access to more affordable options for everyone. That’s why we proudly offer a Social Tariff for those most in need, and we are consistently shouting about our offers to make all eligible tenants aware. As a company, we believe if you cannot consistently deliver high quality for the price you are charging, then the consumer should not be expected to continue paying when there are better options out there. If people don’t like the service, they should be able to leave and not be tied in for months, or in some cases years. Consumers should have flexibility and choice.”

Other voices expressed their dismay at the broadband price rises more vocally. Tucker George, CEO of Rebel Internet, went as far as to say that the market power on display and widespread adoption of “underhand profiteering tactics” by the larger broadband providers had left the industry rotten at its core.

“Broadband is broken, in more ways than one, so the news of big broadband companies doing their best to avoid letting their customers leave contracts and switch to a better alternative is not surprising, just disappointing,” he added.

“Big broadband traps customers in long-term contracts then maximises profits through annual above-inflation price hikes. Switching and the power of consumers to act in their own best interest is an existential threat to the big broadband providers. They will drag their feet until absolutely forced to comply. Their reluctance to support customers is just a further illustration why the UK needs a national challenger to the big broadband providers.”

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