Is this the end for inflation-linked price rises?

If you follow the industry as closely as we do, you may have come across the latest proposal from Ofcom (our regulator) regarding a possible end to the frankly unfair (at least we think so) ‘inflation linked’ mid contract price rises that so many broadband providers are fond of.

It certainly makes for a great headline, but what’s the truth when we run through things with a fine-tooth comb?

Well, first of all, this is only a proposal at this stage, and that proposal pretty much says this:

Telecoms companies would be banned from linking in-contract price rises to inflation or any other percentage figure.

That’s amazing and is something we’ve been campaigning for for the longest time. We think it’s about time broadband providers were held to account in this area. For too long they’ve been duping customers with great-looking upfront offers followed by year after year of excessive price rises.

Because this is a proposal, it must first be consulted on, and this consultation is likely to take place in February with any final decisions being made in the Spring.

So far so good. And we must say that as believers in fair upfront pricing we do welcome this proposal. However, we feel we ought to point out what the proposal misses out.

That comment about ‘percentage’ figures is an important one not to miss. Because that is only half of the story.

The proposal includes a requirement for providers to be far more upfront with their pricing. Prices must be spelt out in pounds and pence, and any in-contract price rises must do the same. So a customer would know in advance exactly when and by how much their price would be increasing during their contract. So, instead of the ‘inflation plus 3.9%’ that’s all the rage at the moment, price increases would be fixed to an exact amount that the customer already knows is coming.

Great, but…

This proposal still gives providers the option to increase customers’ prices within their contracts and, as far as we’re concerned that’s still unfair. It’s the reason we introduced our Contract Price Promise, because we believe that customers should have the confidence of knowing that the price they pay for their service on day one is the same price they’ll pay for the duration of their contract.

We’ll be making that point during the consultation, though we expect that our opinion still won’t be taken seriously by most of the rest of the industry. But, we would be lying if we said we don’t welcome these changes. At least they’re a step in the right direction.