Review of in-contract price rises
This document sets out the terms of reference for Ofcom’s review of inflation-linked in-contract price rises.
Many communications providers include annual inflation-linked in-contract price rise terms in their consumer contracts, typically in the formula of Consumer Prices Index (CPI) or Retail Prices Index (RPI) plus X% (where X is almost universally 3.9%). This, in combination with fast-rising rates of inflation, has led to large and likely unexpected price rises in 2022 and 2023 for many fixed broadband and mobile customers and for some pay TV customers.
We want to assess the impact of inflation-linked price rise terms on consumers, including on their ability to understand and choose the right deals for them, as well as on how this in turn may impact the effective functioning of markets more generally.
We will engage with a range of stakeholders to gather evidence to inform our analysis. As part of this, we plan to issue information requests to providers and will also carry out new consumer research to assess consumer understanding of price rise terms and the impact this has on their ability to shop around and make informed choices.
Our evidence-gathering will take place from now through to early autumn. We will analyse that evidence and set out our findings in a publication before the end of the year, including any next steps. The publication will invite views, before we take a decision about what action, if any, we should take.