BROADBAND AND PHONE BILLS SET TO SOAR AGAIN AS FIRMS EYE POLL TAX-STYLE PRICE RISES

The cost of millions of mobile phone and broadband deals is set to soar, with the least well-off customers seeing the biggest price hikes of up to 11 per cent.

Mobile phone and internet customers suffered rip-off price increases of up to 7.9 per cent this year as providers passed on the cost of inflation, often with 3.9 per cent on top.

But for some customers, those price hikes will be dwarfed by the bill rises broadband and mobile phone firms such as BT, EE and Vodafone are now planning.

Last week regulator Ofcom banned inflation-linked price rises from 17 January 2025, arguing that these caught many customers unaware.

Instead, phone and broadband firms have to display mid-term price rises in pounds and pence in a prominent way.

Ofcom did not impose any cap on how much these firms were allowed to charge.

As a result, many broadband and mobile phone firms have already moved to their interpretation of the new system - where mid-term price hikes will be even higher than under the old one.

So far, all the communications firms that have announced price changes have moved to a flat fee - effectively a sort of poll tax, where everyone pays the same amount regardless of the cost of their mobile phone or broadband deal.

The problem is that this means those on cheaper mobile and internet deals - who are likely to be the least well-off - face proportionally steeper price hikes than those on more expensive ones.

Lyca Mobile UK & Ireland country manager James McQuillan said: 'Providers will now charge customers a flat increase in 'pounds and pence' rather than "3.9 per cent plus inflation," which means those with budget constraints on cheaper deals are now at risk of being charged even more than before. 

'An across-the-board £1.80 increase, for instance, means a lot less to somebody paying £40 a month than a user paying just £10. 

'Customers may no longer live in fear of unexpected rises, but flat price increases will be no less impactful.'

Here is how all the major phone and broadband firms plan to raise their prices - at least, all the ones that have already declared.

For mobile phone deals, the part of the bill that goes up mid-contract is the airtime, the cost of data and minutes, rather than the cost of the handset.

Mobile phone bill increases

Vodafone - £1.80

This means someone on the cheapest Vodafone deal - a Dorro 8100, paying £18 a month, would see a 10 per cent rise.

Someone on the most expensive deal, a Samsung Galaxy ZFold5 with overseas roaming, costing £90 a month, would see only a 2 per cent increase.

EE - £1.50

This means someone on a cheaper EE mobile contract, with a Motorola G14 paying £15 a month, would see a 10 per cent price rise.

Someone with a Samsung Galaxy Z Fold6, paying £69.88 a month, would pay 2.14 per cent more.

EE does have fixed-price contracts with no mid-term cost increases.

Major mobile phone firms O2 and Three still have inflation-linked price rises. Sky Mobile also has yearly price increases, but these are not tied to inflation.

Some providers, such as Lyca Mobile, do not raise their prices mid-contract. 

Broadband price increases

Internet deal prices vary according to where you are in the country.

EE - £3

This level of price increase means a 37MB/s download speed internet deal costing £29.99 a month, on the cheaper end for EE, would rise by around 10 per cent.

A more expensive one, such as a gigabit deal with 900MB/s, costing £44.99, would go up in price by 6.6 per cent.

Plusnet - £3

This means a deal costing £25.99 a month, one of Plusnet's cheaper options, will rise in price by 11.5 per cent.

A more expensive full-fibre 900 package, costing £37.99 a month, would increase by 7.8 per cent.

Virgin Media and TalkTalk's broadband deal prices are inflation linked, while Sky sets its own price rises independently of inflation.

Many smaller broadband firms do not raise their prices mid-term, including Cuckoo, Hyperoptic and Zen Internet.

An Ofcom spokesperson said: 'Inflation might be low now, but as we've seen in recent years it can be incredibly volatile, and we don't think consumers should bear that risk. 

'Our intervention means customers will have certainty and clarity upfront about the prices they will pay, so they can compare offers and select the best deal for them. 

'For people claiming certain benefits, there are cheaper packages available known as social tariffs, which don't include any mid-contract price rises.'

What the firms say 

A Vodafone spokesperson said: 'In line with Ofcom's consultation, we are moving away from inflation linked price rises from 2 July 2024 for our consumer customers and some small business customers.

'Before a customer takes out a new contract or re-contracts with us – from 2 July 2024, they will be told exactly what their contract will cost in pounds and pence, and when that price rise will occur.

'We have introduced two new mobile tiers with a fairer, lower price rise of £1.00 per month for our Basics plans. We are committed to protecting vulnerable customers, and we do not increase prices for our social tariffs or for customers registered as financially vulnerable.'

Mobile phone firms are not allowed to raise prices mid-term on social tariffs under Ofcom rules, which also state the vulnerable must be treated fairly.

EE and Plusnet did not comment.