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Ofcom urges telcos (very gently) to resist large broadband price hikes

Ofcom is having its say on the cost of living crisis in the UK, urging telcos to push low-income plans and appealing to their better nature on upcoming broadband price rises.

Smaller operators in the UK have been urging the regulator to step in on mid-contract broadband prices that will likely hit many consumers next spring. The most vocal of late was full fibre provider Hyperoptic, which earlier this month repeated calls to Ofcom to tackle mid-contract price increases alongside a free broadband offer designed to poach customers from its larger rivals.

It seems the regulator is listening… but for now it is shying away from anything approaching action on the matter.

“With the cost-of-living crisis putting an unprecedented strain on household budgets, Ofcom is also pressing firms to consider whether large price rises can be justified at time of exceptional financial hardship,” the regulator said at the end of a statement published to accompany its latest annual affordability study.

It didn’t have much else to say on the subject, but directed us to the text of a speech delivered by Group Director, Networks and Communications  Lindsey Fussell at Connected Britain last week, which also doesn’t give us a lot to go on. Fussell addressed the topic of annual price rises due to come into force in April, but with a heavy helping of classic regulator fence-sitting.

“Of course, we recognise that inflation is a wider, macro-economic problem that affects some wholesale costs, as well as customers,” Fussell said. “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.”

We can’t judge from that whether the watchdog will follow up with anything akin to actual regulation. For now, it’s clearly adopting an ‘ask nicely and see what happens’ approach.

Meanwhile, its data shows that a huge number of people in the UK are eligible for low-cost broadband but are not taking up the offer, while a sizeable and growing portion of the population is struggling to pay bills.

Specifically, 29 percent of consumers, or around 8 million households, are having problems paying for phone, broadband, pay TV and streaming services, the regulator reports. A year earlier – that’s April 2021, incidentally – the figure stood at 15 percent; that growth rate means the number is now at highest level since Ofcom start collecting data.

As of August, just 136,000 UK households had a social tariff, the name given to a broadband plan for low-income customers, typically costing £10-£20. That’s double the 55,000 signed up six months earlier, but still represents just 3.2% of households receiving universal credit. Meanwhile, 69 percent of benefits claimants said they were unaware of the existence of social tariffs back in April.

This time Ofcom is blaming the telcos.

People are missing out on broadband social tariffs “because providers are not doing enough to advertise this support, or are refusing to offer these packages at all,” it said.

It names and shames some pretty big players.

We are disappointed that some providers, including TalkTalk, Shell, EE, Plusnet, Vodafone, O2 and Three have not responded to our call to offer a social tariff,” its affordability report reads. “We continue to urge all providers not offering a social tariff to do so. In the meantime, they should waive Early Termination Charges (ETCs) for customers who wish to switch to another provider’s social tariff.”

But is it going to force the operators to fall in line? It for the time being it appears not.

 

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