Ofcom, the UK communications regulator, will require telecom providers to state any contract price increases in clear pound-and-pence terms, giving customers greater certainty about their monthly bills.
These new rules will take effect on 17 January 2025 and respond to a rising trend among major UK phone, broadband and pay-TV companies to include inflation-linked price rises in contracts. Ofcom found that this approach often left customers unclear about future costs and exposed them to avoidable financial uncertainty.
Cristina Luna-Esteban, Ofcom’s Telecoms Policy Director, said: “With household budgets under pressure, people need to know what they will pay each month. That is not possible when a contract allows prices to change according to something as unpredictable as future inflation.”
From January 2025, any contract clause that allows for a price increase must be displayed prominently and transparently at the point of sale. Providers must also explain clearly when those increases will take effect.
For example, rather than using formulas such as “CPI+3.9%,” contracts must show specific amounts. A provider could present pricing like: “Monthly subscription price: £30.00 until 31 March 2025,” followed by “Increasing to: £31.50 on 1 April 2025” and “£33.00 on 1 April 2026.”
Ofcom’s research highlighted a widespread lack of awareness among consumers about inflation-linked price rises. More than half of broadband customers (55%) and pay-monthly mobile customers (58%) did not understand what inflation measures such as CPI and RPI represent.
Among customers whose contracts included inflation-linked increases, only a small share were both aware of a price rise and could identify it as inflation-linked: 16% for broadband and 12% for mobile customers.
“We are acting on behalf of phone, broadband and pay-TV customers to stop this practice so people can be certain of the price they will pay, compare deals more easily and benefit from the competitive market in the UK,” Luna-Esteban added.
The new requirements build on Ofcom’s strengthened rules introduced in 2022, which already require providers to make specified price rises clear before customers sign up. If providers fail to set out price rises in advance, they must give customers one month’s notice and the right to exit the contract penalty-free when prices increase mid-contract.
Although the implementation deadline is January 2025, Ofcom encourages providers to adopt these clearer practices sooner. Some major firms, including BT and Vodafone, have already revised their pricing approaches following Ofcom’s consultation.
With the new rules in place, consumers can expect greater transparency and predictability in telecom contracts, making it easier to budget and compare offers.
(Photo by Adrian Swancar)
See also: Bridging the digital divide: How a coalition is tackling smartphone affordability
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