Ofcom’s decision to prohibit mid-contract inflation-related price increases on mobile and broadband services starting in 2025
The regulator announced that plans originally proposed in December 2023 will be implemented in January of next year.
Ofcom confirmed that mobile phone carriers and broadband providers will be prohibited from tying prices to high inflation figures in the middle of customer contracts starting Friday.
The new regulations from the UK’s broadcast, telecommunications, and postal services regulator will require providers to clearly inform customers about any price increases in their contract in pounds and pence.
These rules will come into effect on Jan. 17, 2025, solidifying the plans that the regulator had been considering since December last year.
Many major phone, broadband, and pay TV companies currently link their price increases to future inflation rates, which Ofcom deems unfair as it puts the burden of inflation costs on customers.
Ofcom stated that people are unable to predict inflation and often do not fully understand it, leading to the decision to ban this practice.
The regulator explained that more than half of broadband customers (55%) and pay monthly mobile customers (58%) are unaware of what inflation rates such as CPI and RPI measure.
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“And of those who are with providers that use inflation-linked price rises, very few broadband customers (16%) or mobile customers (12%) were both aware of the price rise and able to identify that it was inflation-linked with an additional percentage.
“We also found that, even when people do consider future inflation-linked price rises when choosing a contract, they often do not understand them fully and find it difficult to estimate what the impact could be on their payments.”
Cristina Luna-Esteban, Ofcom’s telecoms policy director, said, “With household budgets squeezed, people need to have certainty about their monthly outgoings.
“But that’s impossible if you’re tied into a contract where the price could change based on something as hard to predict as future inflation.
“We’re stepping in on behalf of phone, broadband, and pay TV customers to stamp out this practice, so people can be certain of the price they will pay, compare deals more easily, and take advantage of the competitive market we have in the UK.”
The regulator ruled that since Radio 2 targets older listeners, it could have a significant effect on independent radio stations, such as Boom Radio, which targets the same 55 years and above demographic.
PA Media contributed to this report.
