What are mid-contract mobile and broadband price rises – can you beat them?

A mobile phone and broadband router (images: Getty Images)

Once a year, mobile, broadband, TV and landline providers hike their prices in line with inflation. With the scale of 2024’s set of mid-contract price rises now becoming apparent, what are your rights – and can you beat the increases? We explain all in this guide.

Millions of households are set to see their prices shoot up this spring as a result of the controversial practice. So far, we know BT, EE and several other providers will be hiking bills by 7.9% from the end of March. Shell Energy, which was recently bought by Octopus and is reportedly being sold on to TalkTalk, has just confirmed its own 7% hike. It’s likely other providers, such as O2 and Virgin Media, will put up prices by even more.

Ofcom is seeking to ban inflation-linked hikes. Under the industry regulator’s plans, providers will have to show exactly how much their prices will change over the duration of a contract. It means there will no longer be any spring surprises for consumers. BT and EE have already said they will bring in Ofcom’s proposed changes from summer 2024.

The best way to save on your mobile and broadband is to switch once your deal comes to an end. Head to our best broadband deals and cheapest mobile deals guides to find out how you can save. Our comparison tools for broadband and SIMs can help you save £100s.

How are mid-contract price rises currently set?

Every year, broadband and mobile phone prices tend to go up every March or April. We usually start finding out about the scale of the hikes in January. This is because the inflation metric by which most providers set their increases by – December’s Consumer Prices Index (CPI) – is published then.

Providers take the inflation percentage figure (4% this time around) and add an additional percentage on top of it. This extra figure is 3.9% for most firms. So, for spring 2024, your monthly bills will rise 7.9% if your firm calculates its increases this way.

Other providers use a slightly different method to calculate their hikes. They may use January’s Retail Prices Index (RPI), which measures inflation in a different way to the CPI. They then add the industry-standard 3.9 percentage points on top.

RPI tends to track higher than the CPI, so prices are likely to rise more steeply using this method. We don’t know what January 2024’s figure is yet, but we know the measure hit 5.2% in December 2023. So, if mid-contract hikes were being calculated with this figure, people would see their prices rise 9.1% from March or April.

There is one provider that operates as a bit of an outlier when it comes to these price increases: Sky. Along with its sister-brand NOW, it doesn’t usually put up its prices in line with inflation. If it does opt to hike prices, it allows many of its customers to quit their contracts penalty-free. In 2023, the provider’s average price rise was 8.1% – much lower than the 14.4% implemented by most suppliers as a result of record levels of inflation. Here’s how all the biggest providers change their prices every year:

Provider Price hike method 2024 price hike
BT December’s CPI + 3.9% 7.9%
EE December’s CPI + 3.9% 7.9%
Plusnet December’s CPI + 3.9% 7.9%
NowTV No hike in contracts 0%
O2 January’s RPI + 3.9% TBC
Shell Energy December’s CPI + 3% 7%
Sky No hike in contracts TBC
TalkTalk December’s CPI + 3.7% 7.7%
Three December’s CPI + 3.9% 7.9%
Virgin Media January’s RPI + 3.9% TBC
Vodafone December’s CPI + 3.9% 7.9%

Why are providers allowed to do this?

Under current Ofcom rules, providers are allowed to hike prices mid-contract so long as they set out the formula for how they do so within the contract. Ofcom also says they should set out these future rises “prominently and transparently at the point of sale”.

So, what you’ll see in your mobile, broadband, landline and TV contracts is a clause that will tell you:

  • What measure of inflation your provider uses to set price rises
  • Which month they take the inflation figure from
  • The extra percentage they will add on top of the inflation figure

If this clause doesn’t appear in your contract, you will be able to break out of your minimum term without paying exit fees (see more in the ‘can I escape mid-contract price rises’ section below). Sky customers should check their contract as the provider tends to not write annual hikes into its contracts.

Providers that do implement mid-contract hikes say they do so to ensure they can continue to maintain their existing level of service and invest in their infrastructure. For example, ahead of 2023’s price hikes, EE said it needed to raise its customers’ prices by 14.4% (December 2022’s CPI of 10.5% plus and extra 3.9%) to make up for an 80% hike to its energy bills and a further 20% increase in the production costs of its Home Hubs.

Telecoms regulator Ofcom has also defended having some form of annual price rise in place given the country’s mobile and internet infrastructure is in the midst of a major upgrade. For example, the old copper wire network is currently being replaced by fibre cabling.

Ofcom recently said: “Telecoms providers – like all businesses – face a range of cost rises. Network investment is one of these costs. While average household spend on telecoms services has been broadly flat in real terms in recent years, at the same time customers have benefited from better, faster services and are using more data than ever before.

“And as demand for data continues to accelerate, the UK’s broadband and mobile infrastructure is getting a much-needed upgrade. This requires significant investment from telecoms companies, who are also increasing the capacity of their networks to accommodate increasing data use.

“We regulate wholesale telecoms prices in a way that sets the right conditions for companies to build these faster, more reliable networks.“

The Ofcom logo appears on a mobile phone (image: Getty Images)

Will mid-contract price rises be banned?

The good news for consumers is that Ofcom is planning to ban inflation-linked mid-contract price hikes. It says the current system creates “uncertainty” about the costs customers will face over the lifetime of a contract as no one (not even top economists) can know exactly what will happen to inflation in the future.

The industry regulator wants providers to spell out any mid-contract price rises in pounds and pence at the point of sale. If this is brought in, it will mean you will know exactly what your monthly costs will be for the duration of your deal. Not only does Ofcom believe this will provide cost certainty, it also expects it will increase competition in the mobile and broadband markets.

Its consultation lasts until mid-February. While it means we will have to put up with another spring of hefty price hikes this year, it may well be the last time. Look After My Bills will update this piece as soon as Ofcom announces what it will do.

What have BT and EE said?

Ofcom’s proposals have been boosted by BT and EE who have pledged to set out future price hikes in pounds and pence from summer 2024 onwards.

The pair say they will increase prices for new and returning mobile customers by at least £1.50 a year, and £3 a year for people signing up for a new broadband contract. Prices will remain frozen for vulnerable customers on BT Home Essentials and EE Basics.

An EE and BT store (image: Getty Images)

Can I escape mid-contract price rises?

As mid-contract rises are usually written into contracts, most people will not be able to avoid spring 2024’s price hikes. This is because exit fees from the minimum term of a mobile or broadband contract tend to be very expensive. Your provider will seek to cover most of the money you would have paid them over the rest of the deal.

Below, we’ve set out your options depending on where you are with your contract. It’s also worth reading our guide on how to haggle with your broadband provider, as you may be able to get a better deal. We have specific guides for mobile and TV providers too.

  • Out-of-contract

You are likely to be able to avoid mid-contract price hikes if your deal has expired. If you haven’t signed up for a new contract for two or more years, you’ll almost certainly be free to leave your provider without facing a penalty.

It’s better to sign up for a new contract as deals for newbies often work out £100s a year cheaper than rolling post-minimum term arrangements. See our best broadband deals and cheapest mobile deals guides to see what’s out there.

Say you decide to take out a new contract in January or February, be sure to check with your provider whether the mid-contract price hikes in the spring will still apply to you. If they will, haggle with them before signing up as you may be able to get out of any increases.

  • Minimum term close to ending

Those whose minimum term is drawing to a close (ie, will be ending between now and early May) should be able to beat this spring’s price hikes. It’s worth looking into the deals that are available now to give yourself the best chance of maximising your savings on a new contract.

Roughly a month before the end of your minimum term, you will be in a strong negotiating position with your current provider. If they can’t beat the top deals you’ve seen, you should consider switching.

  • Minimum term isn’t expiring for several months

If you’re tied into your existing deal until this summer at the earliest, it’s unlikely you’ll be able to do much about the upcoming mid-contract price hikes. Switching would probably land you with a hefty exit fee.

Unless your provider’s not giving you the service they promised, you’ll only be able to switch penalty-free if they hike your bills by a higher amount than they’ve set out in your contract. When this happens, you will be given at least a month’s notice. You’ll then have around 30 days to quit your contract.

You may be able to haggle with your provider and escape the mid-contract rises. But you will be coming from a weak negotiating position and could compromise future negotiations with that supplier. Some providers may offer to buy you out of your contract (ie, they’ll cover the cost of your exit fees). While this may save you some money now, doing so could compromise your efforts to get a better deal in the future.