Fairer prices for broadband customers
Broadband customers who are out of contract are set to pay fairer prices and providers should better protect vulnerable customers under measures set out by Ofcom today.
As part of our work to ensure fairness for customers, we have looked at broadband pricing practices, particularly the barriers people face when shopping around, and how vulnerable customers are affected.
Around 40% of broadband customers (8.8 million people) are out of contract, and significant savings are available to those who sign up to a new deal with their current provider.
People who sign a new deal with their current provider could typically pay £8-9 less per month than customers who remain out of contract. This is almost as much as the average saving of £9-10 per month made by new customers signing up to an introductory discount with that provider. And a third of those who negotiate a new deal with their provider actually pay less than those on introductory deals.
We challenged broadband companies to make their prices fairer for out-of-contract customers.
As a result of our review, the UK’s biggest broadband companies have made a range of commitments to protect customers and cut prices for those who are out of contract.
- BT, Sky and TalkTalk will allow out-of-contract customers to get the same deals as new customers, when they take out a new contract. (BT will only allow existing customers to access new customer prices when sending end-of-contract and best tariff notifications.)
- The difference that any of Sky's newly contracted customers will pay when their contract ends is no more than £5 per month. From February, BT will cap the difference that existing in-contract customers pay when their contracts expire – it will confirm the amount of this cap soon.
- BT customers who can’t access superfast broadband will no longer pay more than entry-level superfast customers. And BT will provide a one-off automatic price reduction for vulnerable customers who are currently out of contract on more expensive deals.
- TalkTalk and Virgin Media will carry out annual price reviews with their vulnerable customers to ensure they are on the best deal for their needs, providing automatic discounts where appropriate if customers do not respond.
BT, EE, Plusnet and TalkTalk will protect out-of-contract customers from above-inflation price rises.
Most of these commitments will come into effect by March 2020.
From February, broadband customers must also be told when their contract is coming to an end, and shown the best deals available. People who choose to stay with their provider without signing up to a new contract will be given details of their firm’s best deals every year. Pay-as-you-go and SIM-only customers will also get these annual notifications.
Lindsey Fussell, Ofcom’s Consumer Group Director, said: “Broadband customers who are out of contract can make big savings – around £100 a year on average – by picking up the phone to their current provider and signing up to a better deal.
“And in future, everyone will be told about the best tariff on offer. Thanks to the commitments we’ve secured from major broadband firms, many customers – including the most vulnerable – will pay less.”
We have also published a guide on how firms can improve how they treat vulnerable customers.
Simpler to switch
It’s never been simpler to switch your provider or get a better deal with your current one. Find out more about switching, or visit our Boost Your Broadband website to find out how to get more for less from your broadband.