Original article ISPreview UK:
In news that will not come as a great surprise to ISPreview’s readers. A new MSE survey of 47,000 tariffs – all from UK mobile and broadband providers with the biggest market share – has found that Ofcom’s latest policy to improve the transparency of mid-contract price hikes actually seems to have resulted in consumers paying more for their service.
At the start of last year the UK telecoms and media regulator, Ofcom, began requiring telecoms providers to adopt a new approach to mid-contract price hikes, which finally did away with the old and sometimes confusing percentage and inflation-based model – replacing it with one that require providers to set out such price rises “clearly and up-front, in pounds and pence, when a customer signs up” (here).
NOTE: Under the old policy, prices would rise each year by 2-4% plus the rate of annual inflation, as measured via either the Consumer Price Index (CPI) or Retail Price Index (RPI). The UK CPI annual inflation rates for the past 12 months fluctuated between a peak of 3.8% in the summer of 2025 and a low of 2.8% in the spring of 2026.
On the surface this seemed like a good idea, not least because it made annual price hikes clearer and more transparent. On the flip side, it also made it more difficult for providers to balance price rises across lots of different packages, which resulted in many providers adopting a flat price rise – set at the same level for every package.
For example, BT were the first to jump by increasing the monthly broadband price that customers pay by a flat £3 extra – effective from March or April each year (the level of increase varies a bit between providers), which was later increased to £4 after inflation remained higher than forecast (here). Many other providers have since adopted a near identical approach.
The problem with this approach, which we’ve raised many times before on these pages, is that it has a tendency to hit those on the cheapest broadband and mobile packages the hardest (i.e. if you pay £20/month then a £4 rise equates to a 20% price hike each year), while only giving a reprieve to the smaller portion of consumers who take more expensive packages (e.g. if you pay £60 then a £4 rise equates to a 6.67% increase) – not very fair to those on cheaper packages.
Results of the new study
According to the new study of 47,000 tariffs from UK mobile and broadband providers, which was conducted by Martin Lewis and MoneySavingExpert (MSE), some three in four were found to be worse off under Ofcom’s new system than they would have been under the previous inflation-linked approach.
In addition, in almost all cases, “all customers faced above-inflation price rises under the new system” and “those who suffer most are those who have tried to keep their costs down by choosing cheaper tariffs“.
Impact on a selection of broadband contracts
| Broadband contract type |
Original price |
Price rise under the ‘pounds and pence’ system |
Price rise under the old ‘inflation-linked’ system |
Current CPI |
| Basic (150 Mbps) |
£18 |
22% |
7.1% |
2.8% |
| Medium (500 Mbps) |
£26 |
13% |
7.3% |
2.8% |
| Super-fast (900 Mbps) |
£34.99 |
11% |
7.3% |
2.8% |
Martin Lewis said:
“This was frustratingly predictable. Let’s be plain, it provisionally looks like the regulator’s intervention resulted in most contracts costing more. Transparency only goes so far, we don’t want customers overpaying just because they were told about it first.
The solution has always been bleedin’ obvious. Just ban above-inflation mid-contract price hikes. Of course, many, including me, would prefer a ban on any mid-contract rise, as the price you sign up for should be the price you pay over the length of the contract. Yet that risks possible market distortion, as firms may lift initial prices as a provision against unexpected costs mid-contract.”
Sadly the government has, thus far, only seemed inclined to pay lip service to this problem, such as through their soft voluntary Telecoms Consumer Charter (TCC), while at the same time saying they have “no plans to ban in-contract price rises” for UK consumers taking broadband, mobile and phone services (here).
One difficulty for the industry is over the question of how you ban mid-contract hikes without also disrupting the ability of providers to offer a diverse range of attractive first-contract-term style service discounts. In a competitive market this can help to attract or retain customers, while also supporting the growth of new alternative networks against established incumbents.
Finding a balanced approach that preserves some discounting, while still being easy to understand and apply in a way that’s fair across lots of different package tiers, is not an easy task. But much like MSE, we remain broadly in favour of a ban on mid-contract hikes. Finally, inflation has since fallen back a bit over the past year, so we’re waiting to see if any big providers reduce their mid-contract hikes later in 2026.
Take note that there is some choice in the market, so not all providers adopt a policy of mid-contract hikes, although the current system is common amongst the largest players and most consumers use those.
