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How to beat the price-hiking broadband providers that are a rule unto themselves

Broadband
Broadband

Broadband providers have been accused of restricting access to a vital service as they prepare to bump up prices by an inflation-busting 14pc.

Most major operators will increase fees above the Consumer Price Index (CPI) in March or April, costing the average family roughly £60 extra this year. Some will end up paying almost £100 more.

The industry is estimated to see a windfall of between £1.4 billion and £1.7 billion, but it will heap pressure on households, around a third of whom were struggling with their broadband bills last autumn.

Michelle Donelan, the culture secretary, has asked companies not to raise prices but was labelled “weak” by her opposite number as they showed no sign of complying.

If inflation-beating increases are set out in a contract, customers will have to pay a hefty penalty for swapping provider. Ofcom launched an investigation last month over concerns that these terms were being buried in the small print.

As prices soar, multiple measures show that customer service has cratered, with broadband users significantly more likely to complain than in 2016.

BT and its subsidiaries, EE and Plusnet, will raise fees by CPI plus 3.9pc, as will Vodafone. This is slightly lower at TalkTalk (CPI plus 3.7pc) and Shell Energy (CPI plus 3pc).

Last week, Ms Donelan said: “At a time when families are struggling to pay their bills, imposing above-inflation price hikes is not the right thing to do.”

Providers have not heeded the call. According to consumer platform Which?, EE will bring in the biggest increase (£66.89 per year), followed by BT (£65.59), Vodafone (£54.86), TalkTalk (£54.22), Plusnet (£52.67), and Shell Energy (£49.51).

Lucy Powell, the shadow culture secretary, criticised government inaction as she pledged to cut costs for those being squeezed by the cost of living crisis.

She told The Telegraph: “Huge rises in broadband prices are about to hit just as families are facing the largest hike in energy prices ever, and eye-watering inflation in food and fuel prices.

“The Government has the power to do something about this, by forcing companies to offer social tariffs, and cracking down on runaway wholesale prices, but they are too weak to act.”

Data from comparison site Uswitch shows the product with the steepest increase is Vodafone’s Pro II Full Fibre, which will see users stumping up an extra £95.04 per year.

A government spokesman responded that ministers could not set wholesale prices. It was thanks to Ms Donelan that companies had “committed to provide help with bills for customers who ask”, he added.

Howard Jones, of broadband provider Hyperoptic – which does not alter costs throughout a contract’s term – said raising prices was not “the right thing to do”.

He continued: “You might say it’s an incredibly important product in people’s lives and therefore you shouldn’t increase charges. The companies would say it’s an incredibly important part of people’s lives and therefore they’ll understand we’re increasing charges.”

In December 2022, regulator Ofcom began an investigation into whether broadband providers had fulfilled their legal requirement of clearly setting out mid-contract price rises.

It began another probe this week into BT, citing “suspected breaches” by its subsidiaries – EE and Plusnet – in providing proper contract information before customers signed up.

Providers found to have broken Ofcom rules could be fined up to 10pc of their relevant turnover. Users whose terms were not set out clearly may be able to change provider without being penalised.

BT said it is “fully engaged” during the investigation and insisted that its contract information was “upfront, clear and transparent”.

Mid-term fee increases are significant enough, but long-standing customers who renew their contracts are likely to shell out even more in an industry notorious for its loyalty penalties.

Those who do not shop around could “fall foul of some quite significant price rises”, according to Uswitch commercial head Ernest Doku. By contrast, users who switch provider save £160 on average.

Despite mounting charges, households have little to show for it. Ofcom research from 2022 shows that one in five had “reason to complain”, up by more than 50pc in five years.

Helpline call queues are 39 seconds – 40pc – longer than in 2018. TalkTalk, BT and EE have all seen wait times lengthen since before the pandemic.

BT also came off badly in repair times. A tenth of all faults lasted longer than three weeks, accounting for just 1pc or 2pc among other providers.

Jan Campbell, an account manager from Dumfries and Galloway, encountered a “comedy of errors” as the company took almost seven weeks to fix her broadband.

She said: “Every day I was on the phone and every day they were very nice, but nothing ever got fixed. Then I’d have to start over again – ‘Have you tried turning it on and off?’”

A BT Consumer spokesman said: “We understand that price rises are never wanted nor welcomed, but recognise them as a necessary thing to do given the rising costs our business faces.”

He added that the average rise – from which 3 million customers are exempt – was around £1 per week, and that BT data shows just 1pc of faults last longer than three weeks.

Shell Energy said it had a £20m Helpfund to support the vulnerable, and would move customers to cheaper tariffs “wherever possible”.