UK mobile and broadband bills set to rise 9% in 2024, warns watchdog

Unlock the Editor’s Digest for free

Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.

Mobile and broadband bills in the UK are set to rise 9 per cent on average next year, an independent consumer watchdog has warned, as telecoms groups face scrutiny over inflation-linked price increases.

The research comes amid an investigation by the regulator Ofcom into the fairness and transparency of price increases while consumers continue to grapple with higher living costs.

Earlier this year, the government said it was not “right” for some businesses to impose price rises as high as 14 per cent on their customers. However, telecoms groups defended the increases, arguing they were necessary to fund vital investment costs as the demand for data grows.

Providers typically add about 3.9 per cent to the annualised rate of consumer or retail price inflation. The UK annual rate of inflation was 6.7 per cent in September, down from a peak not seen since the 1980s.

Mid-contract payments are cumulatively expected to climb by £770mn, with increases of £660mn for customers who are out of contract in 2024 — £1.43bn in total — according to analysis by Citizens Advice.

It estimated that prices would rise an average of 9 per cent across mobile and broadband next year. For both contracted and out-of-contract consumers, this would amount to an annual £47 increase.

It also found that telecoms bills for a large number of people would, by April 2023, have cumulatively risen more than 38 per cent since mid-2021.

Consumer rights groups, including Which?, have called on Ofcom to ban mid-contract price rises across the telecoms market. Citizens Advice is also demanding the removal of inflation-linked price rises for customers whose agreements have ended.

Ofcom said it would keep a “close eye” on whether companies were “playing by the rules”.

“We’re currently looking at whether tougher rules are needed so that customers can be certain about what they will pay, and at companies’ compliance with our rules,” it added.

The regulator will publish its review in December.

BT Consumer said: “We understand that price rises are never wanted nor welcomed but recognise them as a necessary thing to do given the rising costs our business faces.” It added that BT’s price rises were “contracted and transparent”.

Vodafone UK said the “adjustments we make are essential to help us continually invest in a reliable network throughout the UK, as well as to keep up with the ever-growing demand for data”. The company has also frozen prices for customers registered as financially vulnerable.

Virgin Media O2 acknowledged the backdrop of rising costs but said it was “vital” that the company be allowed to invest heavily in its networks, adding that it was “always open and transparent” with customers.

Three UK declined to comment.