Churn expected to rise as consumers rebel against April price rises

Telecoms price rises scheduled for April are up to four times the rate of inflation, according to analysis from Uswitch. 

The comparison site says consumers would only tolerate a £2.70 increase before considering switching, suggesting many providers could face higher churn as customers come out of contract this spring.

 BT, EE, Virgin Media O2 and Vodafone are standardising increases that can add up to £48 a year for broadband and £30 a year for mobile, However some providers are positioning themselves as a rise-free alternative.

Players such as YouFibre in broadband and Lebara in mobile are continuing to offer contracts with no in-contract price rises, betting that price certainty will become a key battleground as April approaches.

Mobile users are under similar pressure. One in five surveyed say they would struggle with a £2.50 rise, while 17 per cent say they would not accept any increase at all.

While inflation is currently running at 3.2 per cent, some mobile and broadband customers could see increases of as much as 13.4 per cent, driven by the fixed annual price rises now written into newer contracts, Uswitch reports.

January 17 marked the first anniversary of a major shift in how networks are allowed to raise prices. Under the old system, annual increases were linked to inflation, which could not be known at the point of sale, plus an additional percentage. Providers must now state the exact cash increase a customer will face each year before they sign.

“While the change has improved transparency, it has also locked in steep rises in advance,” Uswitch said.

The sharpest proportional increases on the mobile side are now appearing on lower-value tariffs, where the average mobile bill is £18.60 a month. From April, customers on these plans will face fixed increases of £2.50 a month. This is equivalent to a 13.4 per cent rise.

EE is applying a £2.50 monthly rise on many SIM-only and handset contracts signed since early 2024. Vodafone has set a £2.29 to £2.50 monthly increase across new contracts. Three UK is imposing a flat £2.00 to £2.50 rise, depending on tariff level.

Uswitch says O2 has implemented increases above the levels originally outlined in some customer contracts.

Broadband customers face a similar squeeze. Many of the UK’s largest providers are now applying a £4-a-month increase for new customers.

That represents an 11.1 per cent rise for someone on the current average broadband bill of £35.90 which is more than three times the current inflation rate.