Ofcom has urged broadband operators to abandon mid-contract price hikes as a record number of households struggle to afford their communications services.
The regulator’s annual affordability study found 29% of customers, around eight million households, are having problems paying their mobile, broadband and television bills – double the figure from last year.
Operators can increase the cost of monthly tariffs according to inflation each April but given the enhanced role of connectivity in society, Ofcom has questioned whether large price increases can be justified although it will not impose any restrictions.
Broadband affordability
“Of course, we recognise that inflation is a wider, macro-economic problem that affects some wholesale costs, as well as customers,” Ofcom consumer director Lindsey Fussell told the recent Connected Britain event.
“But while Ofcom does not regulate retail prices, we want companies to think very carefully about what is justified during an exceptional period of hardship for many people.”
It has however published revised guidance that has asked providers to proactively emphasise the support available to anyone struggling to pay their bills and do more to promote the availability of ‘social tariffs’ – specially discounted services available to anyone in receipt of universal credit.
Many low-income households are unaware of the existence of social tariffs and although takeup has more than doubled in the past six months, only 3% of eligible households have done so. In addition, Ofcom has called on providers that don’t offer a discounted package to do so and has said the mobile industry follows suit.
One thing that should help is the launch of a new eligibility checker for social tariffs created by the government.
"Good broadband and mobile connections are essential for day-to-day life and telecoms firms must do more to support those struggling to afford their bills,” responded Rocio Concha, Which? director of policy and advocacy.
"Which? is calling on telecoms firms to do a better job of advertising their social tariffs, including how they differ to commercial tariffs, and to ensure customers do not incur any additional charges when signing up to discounted rates.
"Telecoms firms should allow customers on any tariff to leave without exit fees if their costs change mid-contract, regardless of whether or not these increases can be said to be ‘transparent’."
Earlier this year, BT, Sky, TalkTalk, Three, Virgin Media O2 and Vodafone were among those to agree to ensure customers struggling to pay their bills are treated compassionately and are allowed to move to cheaper tariffs without penalty, or agree a feasible payment plan. This followed talks with the Department for Culture, Media, and Sport (DCMS).
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