Why are broadband prices going up?

Broadband providers have increasingly taken to raising their prices each year using a method based on inflation.

However, with the cost of living crisis taking its toll on household finances we've also seen consumer sites, charities, and even Government figures speak out against mid-contract price rises.

Yet, despite this, providers including BT and Virgin Media have already confirmed their intentions to go ahead with annual price rises in 2023.

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How much are prices increasing by?

The actual amount a broadband bill will be increasing by varies between providers, as some use different ways to calculate inflation, as well as adding different amounts on top.

BT have confirmed prices of customers with BT, Plusnet, or EE fixed line broadband and phone services will be increasing by 14.4% from 31st March 2023.

Virgin Media have also confirmed the prices for their broadband, TV and phone customers will be increasing by an average of 13.8% from their April or May bill.

While last year we saw KCOM waive annual fee increases, we've so far not had any announcements from any providers they may be opting to do the same.

As such, we can assume the following contractual price increases will be going ahead:

Certain providers take the Consumer Price Index (CPI) value at different times, which can cause variations in how much prices increase by. In addition, when the price rise comes into effect is also sometimes implemented at different times, although most often around April.

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Broadband price rise calculator

Each broadband provider has a different way of calculating annual price rises. Use our simple broadband price rise calculator below to find out exactly how much your broadband bill will be increasing by this year.

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Can I leave my contract if prices are raised?

Usually the unfortunate answer to whether you can leave your broadband contract early if prices are increased is no, or at least not without paying early leaving fees.

This is because Ofcom currently allow providers to increase prices of both in-contract and out of contract customers as long as the price increase is clearly specified at the point of sale and in the terms and conditions.

This is true therefore of all the providers listed in the table above where they specify that prices will increase, whether or not they give an actual amount. So, this includes BT, Plusnet, TalkTalk, Sky, NOW Broadband, and Vodafone.

Virgin Media

The one exception to this has been Virgin Media, because they specifically allow customers to leave early if they increase prices. Their terms and conditions state:

We may increase our charges under this agreement at any time. We may also change these terms and conditions, the equipment, and the services that we have agreed to provide to you.

Subject to the exceptions explained below, if we do any of these things and the changes are not exclusively to your benefit, we will notify you of this and inform you of your right to cancel this agreement without paying an early disconnection fee by giving us notice in accordance with Section N.

Section N relates to ending the contract by giving Virgin Media 30 days' notice.

However, as a result of merging with O2 in June 2021, Virgin Media have recently stated they'll be adopting O2's pricing terms and implementing contractual price rises of Retail Price Index (RPI) + 3.9% from April 2023.

It's a strange move from Virgin Media considering RPI is due to be phased out by 2030 and all other providers have now switched to CPI, except for O2. So, it's likely we will see Virgin Media O2 pricing terms update again.

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Further details: Price rises by provider

Some customers may be free from price rises depending on when they took their current contract out.

Here's the details of each broadband provider's annual price rises.

BT, Plusnet, and EE

BT has already confirmed the prices for broadband and phone customers of BT and BT owned subsidiaries Plusnet and EE, will be increasing by 14.4% from 31st March 2023.

Customers with these providers who are still within their minimum terms won't be able to cancel their contracts early without penalty as the providers all include the CPI + 3.9% increase in their terms.

TalkTalk

TalkTalk have yet to confirm their price rises but they went ahead with them in 2022 so we expect them to do the same this year.

TalkTalk increase prices by CPI + 3.7%. They use the January figure of CPI, which is 10.5%, and prices are increased in April. TalkTalk customers can expect prices to rise by 14.2% in April 2023.

Sky and NOW Broadband

Sky and subsidiary NOW Broadband state that "prices may increase" during a minimum term. While it's not specific, it means customers of these providers can't leave their contracts early if they increase prices.

In 2022, we saw Sky increase prices for broadband customers by around 10% on average, while Sky TV prices increased by £1. In 2021, they also increased prices between £1 and £3 for broadband customers.

We can expect to see some level of price increase from Sky and NOW Broadband this year, although neither provider has confirmed how much they'll be increasing prices by yet.

Shell Energy Broadband

Shell Energy use the CPI + 3% calculation to increase prices. This means customers of Shell Energy won't be able to leave their contract early without penalty because the increase is baked into their contracts.

We expect to see Shell Energy broadband prices increase by 13.5% in or from April 2023 as the provider uses the January figure of CPI.

Community Fibre

Community Fibre switched to annual price rises in late 2021 and now reserve the right to increase prices by CPI + 2.9% in their contracts.

Community Fibre use the January figure of CPI, and increase prices in April of each year. We expect to see them increase prices by 13.4%.

Customers who take out a Community Fibre broadband contract between January and April are free from mid-contract price rises until the following year.

Gigaclear

Customers who signed up to Gigaclear before 1st March 2022 aren't subject to mid-contract price rises as their contracts were taken out when the provider was offering fixed prices.

However, anyone who's signed up to Gigaclear since 1st March 2022 will be subject to annual price rises of CPI + 3.5%.

Gigaclear are slightly different from most other providers in that they increase prices in October, rather than April. They also use the July rate of CPI which has yet to be announced for 2023, so we can't say specifically how much Gigaclear prices will rise by yet.

Vodafone

Vodafone's fixed line broadband contracts include an annual price rise of CPI + 3.9%, so customers won't be able to exit their contracts early if prices go up.

Vodafone use the January figure of CPI and increase prices in April of each year. We expect then to see Vodafone broadband prices increase by 14.4% in 2023.

Customers who took out a contract before 2nd February 2021 will be subject to RPI + 3.9% increases instead. These may be slightly higher, but because they use the RPI figure published in March, we can't be specific with the actual amount yet.

Virgin Media

Virgin Media have so far taken a different approach to annual price rises, leaving them out of their contracts entirely and giving customers the right to exit their contracts penalty free if they do increase them.

That means that, while Virgin Media have confirmed annual price rises of 13.8% on average for their broadband, TV and phone customers, these customers have the right to give 30 days' notice and leave their contracts early without extra costs.

However, from April 2023, Virgin Media has also announced they will be adopting partner company O2's pricing terms and will use the RPI + 3.9% going forwards.

This means in future Virgin Media customers won't have the option to exit their contracts early if prices are hiked by RPI + 3.9%. In addition, RPI is higher than CPI, which means price rises will be more expensive with Virgin Media than any other broadband provider.

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Regulating mid-contract price rises

As a result of soaring inflation and the cost of living crisis, in December 2022 Ofcom began investigating whether prices have been increased without providing enough transparency to customers at the time they signed up.

Current regulation states that broadband providers can increase prices during a contract as long as they inform the customer that prices may increase, or provide a specified increase, at the time they take the contract out.

However, Ofcom guidelines state that price increases must be sufficiently prominent and transparent and that the "subscriber can properly be said to have agreed on an informed basis".

The regulator will be investigating contracts taken out between 1 March 2021 and 16 June 2022, and will look into whether or not messaging regarding price rises was clear enough to meet their guidelines.

The move follows on from the Committee of Advertising Practice (CAP)'s consultation into mid-contract price rises.

The consultation ran from 8 September 2022 until 17th November 2022, and while anything has yet to be announced, it's likely we may see changes to way broadband and mobile contracts are advertised to ensure enough clarity around mid-contract price rises.

Yet, it still feels as though Ofcom and other regulatory bodies like CAP are moving slower than they should on the issue. For example, even ensuring transparency doesn't protect consumers from price rises that could become unaffordable.

Consumer groups, charities, and even some providers, have been campaigning for an end to mid-contract price rises as it's debatable whether customers should be subject to price rises during a contract that lasts only 18 to 24 months on average.

With households struggling in the cost of living crisis, we've even seen the Government warn providers against increasing prices above inflation when Michelle Donelan, the Culture Secretary said, "At a time when families are struggling to pay their bills, imposing above-inflation price hikes is not the right thing to do.".

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Fixed broadband prices

While the majority of broadband providers have now implemented annual price rises there are still a small selection who offer fixed prices.

Fixed broadband prices mean the provider contractually promises not to increase prices during a customer's minimum term. If they do so, the customer would be allowed to leave their contract early without penalty.

The three providers still offering fixed broadband prices include Hyperoptic, Zen Internet, and YouFibre. However, Zen Internet is the only nationally available provider and they tend to have higher prices to start with, so customers may not necessary save more by opting for a fixed price broadband provider.

Read more on fixed prices and who offers them in this guide.

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Summary: mid-contract price rises need further regulation

Mid-contract price rises have become the norm in both the broadband and mobile sectors over the past few years, with very few providers left offering fixed prices.

Yet with inflation soaring as high as it has customers have been left in a sticky situation where broadband bills could become unaffordable without any way to exit the contract without being subject to early termination fees.

While Ofcom are investing how transparently providers are communicating these annual price rises before customers sign up, it's important to consider whether CPI and RPI based price rises are themselves transparent enough to ensure customers can be said to have signed up on an "informed basis".

For example, in June 2021, CPI was only 2.5%, yet a customer who took out a 24-month contract then could now be subject to mid-contract price rises as high as 15%.

Read more in our campaign to improve the regulation of mid-contract price rises.