Broadband price rises 2024: What to expect and how to avoid them

Dan Howdle • January 18th, 2024

Ofcom is to set new rules for mid-contract broadband price rises in 2024

Broadband pricing can be confusing. This is largely thanks to the way providers raise prices for existing customers both in and out of contract, and the many ways they make their packages appear cheaper to new customers. Ofcom is going to be cracking down this year, but how exactly? Will customers pay less, and will we finally see an end to mid-contract price gouging?

A bit of price-rise history

For a couple of decades now internet providers have gotten away with whatever they can when it comes to making customers pay more than they might think they're going to pay. And to make this year's price rise changes make sense, we need to first go on a little history detour.

Up to 2016: The 'free broadband' years

Only a decade ago providers were allowed to advertise their broadband packages for £0.00. Amazing deal, right? Free broadband! But of course, it wasn't free. Providers had merely shifted the monthly cost into something called 'Line Rental' – a not entirely honest descriptor of what ended up being your monthly broadband bill.

In 2016 the Advertising Standards Agency (ASA) put the kibosh on this, labelling it as – rightly – misleading and demanding the following changes:

• Show all-inclusive up-front and monthly costs; no more separating out line rental
• Give greater prominence to the contract length and any post-discount pricing
• Give greater prominence to up-front costs (such as delivery fee, activation fee, installation fee)

2016 to 2018: The 'unregulated price rises' years

Between 2016 and 2018 there was nothing to stop broadband providers raising the price of your broadband deal as often as they liked. In fact, BT famously raised its prices for existing customers three times in one particular year, and customer had little recourse but to pay. This was of course wholly unfair, and indeed in the middle of 2019 Ofcom introduced some new rules to prevent or limit such rises.

The way this worked was that providers would have to inform their customers of upcoming price hikes, and customers would then have to option to switch to another provider. And for a while this worked, though the interim problem was getting the message out to customers they could just up sticks and leave if they didn't like the price change.

2019 to 2023: The 'getting around the rules' years

Companies will do whatever they think they can get away with, and here's the proof. Rather than simply do better for their customers and cease their price hikes, instead broadband providers began writing their price hikes into the contract agreement. Customers would have to agree to annual price rises of CPI inflation plus 3.9% at the outset, voiding both the provider's responsibility to inform them it was happening (though many did anyway), and the customer's ability to leave for free.

If ever there were a perfect example of 'not in the spirit of how the rules were intended, this is it.

New broadband price rise rules for 2024

It was only a matter of time, but Ofcom has been onto the providers and their little contract agreement scam for quite some time now, citing 'confusing price rise terms' that 'risk undermining a competitive market'. The essence of the rule change coming in is to prevent these sorts of unpredictable price rises.

Price rises are not outright banned

This is very important. Ofcom is not proposing a complete ban on mid-contract price rises in 2024. Rather, it is proposing changes that represent a toughening of existing rules, designed to prevent providers from including inflation-linked or percentage-based price terms in their new contracts. Providers will have to state in their contracts moving forward the price customers will pay throughout the length of the contract in pounds and pence.

This means that, for example, a £30 broadband deal with a 15% annual price rise will have to be advertised as something like: £30 per month until March 2024, £31.50 from April 2024, £33 from April 2025. The final formatting of this sort of advertising is as yet undecided, but it's likely it'll be something approximating that format according to Ofcom.

Whether that is more or less confusing for customers without a degree in broadband pricing methodologies remains to be seen. But you can't argue that it isn't at least clearer what specifically customers will be paying and when, when inflation is a variable figure, especially across the last few years.

When will Ofcom's new broadband price-rise rules apply?

It is not fully decided whether the proposed changes will indeed take place. Wait, what? This might not even happen? Yes, it might not. However, we wouldn't waste your time telling you all about it if we weren't 99% certain the changes will go through. It is rare that providers can mount any meaningful challenge to this sort of regulation, especially when it's so clear that the way price rises are currently managed is so opaque.

• 13 February 2024 – Marks the end of the consultation period. Consultation is where the regulator gathers input from any parties that have vested interests in these changes (providers, resellers, customer advocacy groups and so on)
• Spring 2024 – This is when Ofcom will publish its final decision. If it does indeed find these rule changes to be the right course of action, those rules will usually be put in place with a few months grace to allow providers to get their chips in a row
• Autumn/Winter 2024 – We expect any new rules to be in place by the end of 2024

How to avoid the sting of broadband price increases in 2024

If you've read this far then you'll no doubt be fully aware that avoiding annual price rises is very, very hard as things currently stand. However, there are a few ways of diving around them if you're just a little bit savvy going in. They are:

Find a provider with a price fix

This is relatively uncommon now. Up until a few years ago, one or two of the bigger providers advertised 'no mid-contract price rises' to test the water and see if it would bring them more customers, usually in exchange for signing up to a longer (two-year) contract. Evidently, this didn't work because you don't see them very often now.

Check providers in your area

But altnets do still offer these. An altnet is a small, local provider (examples being Zzoomm, Hyperoptic, Lightspeed, BeFibre, Lit Fibre, Fibrus and many, many more). And we would say about 90% of altnets will not raise their prices mid-contract. We don't list many altnets in our broadband comparison because most of them are unable to provide up to date postcode information.

Opt for a provider with a shorter contract

We're genuinely irritated at the way providers are steadily gravitating towards longer contracts. Long contracts mean less choice, and where once a two-year contract would get you a lower monthly price and even a price freeze, that's no longer the case. BT, EE, Vodafone and Plusnet have all gone to the dark side on long contracts, and so doing your best to avoid price hikes does to some extent mean avoiding them – a situation of their own making.

12 month contracts can still be found with NOW Broadband, with the added benefit that NOW also doesn't carry out any credit checks. Though you may still hit a price rise mid-contract, you won't be stuck with it for an extra year.

Haggle with your existing provider

Most broadband providers don't want you to switch away, so provided you have that option (you're out of contract or you've received a price rise notification via a letter), you can usually – attempt at least – to haggle the price down on your existing contract.

This tactic depends heavily on which provider you're with. Sky, for example, is renowned for giving a little ground to customers they want to keep. BT, on the other hand, has a bit of a reputation for saying no. If you want to stay with your current provider and aren't happy about the price rise, this is still the best thing to try though, since no provider will let an existing customer switch onto a new-customer deal.

Some closing comments

We're pretty certain Ofcom's new changes will come in by the end of 2024. It won't change anything for those of us who are facing price increases this coming April 1, but it will mean that, from the end of the year, it will be absolutely clear what you're going to be paying and when, and providers will be prevented from moving those goalposts.

Another thing we're certain of is that providers will already be busing themselves behind closed doors to come up with ways they can still raise prices beyond those advertised without technically breaking the rules. That's why we chose to give you a little bit of history here. That's just what they do.

In the meantime our advice is to avoid two-year contracts where possible, and if you do need to be with one of the providers where long contracts are mandatory, at the very least take some time to get a good grasp of what you'll actually be paying across the entire length of it.

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