Insights Ofcom announces review of inflation-linked telecoms price rises

Ofcom has launched a review to examine whether inflation-linked mid-contract price rises give phone and broadband customers sufficient certainty and clarity about what they can expect to pay.

Ofcom says that it is concerned about the degree of uncertainty consumers face about future price rises specified in contracts based on inflation. The unpredictability of inflation rates means it can be difficult to know, months in advance, what an inflation-linked price rise will equate to in pounds and pence when consumers enter a contract.

Ofcom’s preliminary research has found that around a third of mobile and broadband customers do not know whether their provider can increase their price. Among those who do know their provider can increase their price, around half do not know how this would be calculated, and nearly half of all customers do not know what CPI and RPI measure.

Ofcom says that its review will examine these issues in detail to see whether tougher protections are needed. It expects to publish its initial findings later in the year. To read Ofcom’s news release in full, click here.