Telecoms providers are now required to clearly state upfront any price increases linked to inflation in customer contracts, a move by Ofcom aimed at protecting consumers from the unpredictability of volatile inflation rates.
Starting today, Ofcom mandates that any future inflation-related price hikes must be explicitly included in a customer's contract at the point of sale, as reported by .
While many leading phone, TV, and broadband companies already have terms regarding inflation-linked price rises, the actual costs for consumers have been unclear, leaving them to guess their future bills due to fluctuating inflation rates.
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Ofcom's research revealed that 55% of its 11 million broadband customers and 58% of monthly mobile customers did not understand how inflation rates affected their costs. Even when people took inflationary price increases into account, they often did not fully grasp them, making it challenging to predict their expenses.
From this point forward, however, providers will need to specify any upcoming price increases in "pounds and pence".
Natalie Black CBE, Ofcom’s Group Director for Networks and Communications, commented on the new regulations: "More than ever, households want and need to plan their budgets."
She added, "Our new rules mean there will be no nasty surprises, and customers will know how much they will be paying and when, through clear labelling."
When the policy was unveiled last July, Ofcom’s telecoms policy director Cristina Luna-Esteban remarked: "With household budgets squeezed, people need to have certainty about their monthly outgoings."
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"But that’s impossible if you’re tied into a contract where the price could change based on something as hard to predict as future inflation."
Virgin Media informed CityAM, "New and re-contracting Virgin Media customers will receive a flat increase of £3.50 a month, effective each April, while airtime price increases for O2 customers will be £1.80 a month, with device payment amounts remaining frozen."
"This will give customers more certainty about how their bills may change over the course of their contracts. At less than the cost of a takeaway coffee or a sandwich, this represents excellent value for connectivity that our customers are using more than ever before, at the same time as we invest more than £5 million a day in our networks and services to give our customers the fast and reliable connectivity they increasingly rely on."