Broadband providers set to pocket extra £186m under new regulations

Ofcom’s new rules for broadband mid-contract price rises have backfired on a number of fronts. That’s the finding of new research from UK broadband comparison site, Broadband Genie.

2026 is the first year many broadband customers will see their bills increase under the new ‘pounds and pence’ rules. But the new rules will fail millions of bill payers.

Many broadband customers will see their bill raise by £4 a month. Almost double against what they would have seen under the old inflation-linked system.

For example, under the old regulations, Virgin Media customers would have seen a 7.6% increase to their contract (3.6% RPI plus a 3.9% fixed margin). However, the new fixed amount of £4 added to their average broadband package of £22.86 per month represents a price rise of 18%.

Across all contracts this, on average, costs each customer an extra £2.11 more per month.

Over the next 12 months, some of the largest internet service providers (ISPs) are set to profit by an additional £186m compared to the previous inflation-linked system.

This figure represents just over a third (37%) of the market. It’s because these customers switched or renewed their deals after the ‘pounds and pence’ regulations took effect on 17 January 2025.

Alex Tofts of Broadband Genie said:

The ill thought out regulations from Ofcom have totally backfired. By changing the inflation-linked system, it removed a natural benchmark for what providers could do, leaving the door open for them to further exploit loyal customers.

Providers have not hesitated to raise customers’ prices far beyond the rate of inflation, costing bill payers millions. The only way we can protect customers is to outright ban these absurd mid-contract price rises.

Disproportionate effect on more vulnerable broadband customers

When providers apply a blanket increase across all tariffs, the effect is much larger on cheaper deals. For example, a £4 monthly price rise represents an 8% increase on a £50 deal. But it means a 20% increase on a £20 deal.

Vulnerable customers and those with less disposable income are likely to be on cheaper tariffs. The new regulations will hit these vulnerable customers the hardest.

As is so often the case in the UK’s deregulated hellscape of privatised public utilities, consumers are in the dark. In theory, Ofcom introduced these rules to make it clear what customers were signing up for at the start of their deal.

However, 45% of customers who took out a broadband contract after the introduction of fixed price rises were unaware that their deal included annual increases. 58% do not know by how much their deal will go up in April.

Tofts added:

The rules have clearly not had the intention of making broadband deals more transparent. Not only are customers still not sure what will happen to their bill, but some of the most vulnerable customers will be the hardest hit.

It was always clear, the only way to make things transparent for customers was to ban mid-contract price rises. We believe the price customers see is the price they should pay.

Featured image via the Canary