BT Group PLC (LSE: BT.A) has stood by its recent increases in broadband and mobile prices following criticism from the consumer advocacy group Which? who labelled the hikes as “outrageous”.
The telecommunications company, along with its competitors, has implemented significant price rises recently, a move enabled by a pricing structure that ties increases to consumer price inflation plus an additional 3.9%.
In 2023, this formula resulted in a 14.4% increase, and this year, BT has announced a 7.9% rise in prices.
BT has stated that it has been “clear and transparent” about its price increases. In contrast, Shell Energy Broadband, the only other company to respond to Which? claimed its price rises were smaller than those of its competitors.
Industry observers note that other companies often wait for BT’s pricing announcements and then follow suit with slightly lower increases.
Customers who choose to terminate their contracts early to avoid these higher prices are also faced with substantial early exit fees.
Rocio Concha, the director of policy and advocacy at Which? argued that major telecom providers need to alter their policies, urging them to “halt unfair price hikes immediately” instead of adding to their customers’ financial burdens.
Which? has calculated that customers of BT’s mobile division, EE Mobile, will experience an annual increase of £24.84 starting from April. However, terminating the contract early would incur a £289.64 exit fee.
Similarly, BT broadband users are looking at an additional annual cost of £35.92, or an early exit fee of £218.64 if they have 12 months remaining on their contract.
BT explained that using the 4% CPI inflation rate from December, plus the extra 3.9%, would translate to an increase of about £3 per month for most customers. The company justified this by citing its significant investments in fast fibre technology and social contracts.
Ofcom, the telecoms regulator, has announced plans to introduce new regulations in the autumn to address the combination of price hikes and high exit fees.
