(qlmbusinessnews.com Thurs, 18th Jan, 2024) London, UK —
“Telecom Turmoil: UK Customers Brace for 8% Price Hikes Amidst Inflation Surge”
In the wake of a surprising surge in inflation in December, millions of UK mobile and broadband customers are bracing themselves for potential price increases of approximately 8%. Vodafone, a major telecom provider, is set to join others in passing on in-contract rises, drawing criticism from consumer watchdog Which? for what it deems “unacceptable” practices.
Many leading telecom operators have clauses in their contracts that tie bill increases to the Consumer Prices Index (CPI) for December. Typically, these increases amount to CPI plus 3.9 percentage points, resulting in an overall rise of 7.9%. While this is a lower hike than last year's, which saw increases of up to 17.3%, concerns persist about the impact on the cost of living.
This round of inflation-linked price hikes may also be the last, as the regulator Ofcom proposed banning such increases in December, citing consumer confusion. On Tuesday, BT became the first major telecom company to scrap inflation-linked rises, but not before pushing through a final increase for this year, meaning its customers will face a 7.9% rise from April.
Vodafone and Three, however, have confirmed their intentions to implement the rises outlined in current contracts, resulting in the same 7.9% increase this year. Vodafone estimated that about half of its customers would experience a rise of “a few pounds a month,” while Three stated that the average increase would be less than £1.50 a month.
A Vodafone spokesperson justified the move, stating, “We know no one likes to see prices rise, but, like all industries, we face inflationary pressures that raise the cost of running and investing in our network.” The spokesperson also expressed support for Ofcom's work and emphasized the company's commitment to freezing prices for vulnerable customers.
While other mobile companies have yet to announce their decisions on price increases, consumer group Which? has strongly condemned the potential moves. Rocio Concha, the director of policy and advocacy at Which?, labeled it “completely unacceptable” and urged telecom providers to abandon plans for above-inflation price hikes, particularly after Ofcom's proposed ban.
Virgin Media, relying on the typically higher Retail Prices Index (RPI) inflation rate and using January’s figure, has not disclosed its stance on potential price increases.
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