TalkTalk offer no mid-contract price rises in new deal

TalkTalk are currently offering no mid-contract price hikes for 24 months on their full fibre broadband packages, including Full Fibre 150, Full Fibre 500 and Full Fibre 900.

However, the provider is still keeping their general policy of increasing prices by inflation + 3.7%, which saw customer bills rise by 14.2% in April 2023.

Inflationary-linked price rises are currently under fire, with Ofcom soon to decide their fate with a potential ban on the practice.

No mid-contract price rises

TalkTalk are one of the first broadband providers to come out with an offer of no mid-contract price rises, after previously applying annual increases based on inflation across all deals from 2021.

New customers signing up to one of their full fibre connections from Fibre 150 and up will now receive terms with no mid-contract price rises for the 24-month minimum term.

Customers can also currently benefit from a reduced price for the first six months too, with deals like Full Fibre 150 on offer for as little as £17.50 per month for the first six months, and then a fixed price of £35 per month for the next 18 months until the end of the minimum term.

See the latest deals on TalkTalk broadband.

TalkTalk were quick to point out this is a time-limited deal however, and only applies to new customers joining on some of the full fibre deals in January.

The provider otherwise has an annual price rise clause based on the Consumer Price Index (CPI) + 3.7%, an inflationary measure which saw their prices go up by 14.2% in April 2023.

They moved to inflation-linked annual price rises in March 2021, despite previously championing fixed price deals in 2018. Yet, despite this, they maintained a 'Fixed Price Plus' add-on on some of their broadband deals, although the value this offered was sometimes questionable.

Other TalkTalk broadband deals still subject to the annual price rise clause include Full Fibre 65, Fibre 35, Fibre 65, and the Fast Broadband copper ADSL product, so customers should be careful to check the terms of the deal they pick.

Upcoming ban on inflationary price rises

TalkTalk's new offer is unexpected, but not entirely surprising, considering Ofcom have been reviewing inflation-linked price rises for fairness since February 2023, and announced a proposal to ban them in January 2024.

Despite inflation-linked price rises having been given as acceptable examples of mid-contract price rises in Ofcom guidelines, the regulator has now reached the conclusion these rises are too complicated for customers to easily understand and they have the potential to cause harm with customers unable to plan for inflation-linked rises when they sign up.

Inability to plan for future-based figures is one of the main reasons Choose has been campaigning against mid-contract price hikes since the start of 2022, so it's pleasing to see Ofcom finally recognising this.

However, TalkTalk have criticised Ofcom for creating the issue of inflation-linked price rises in the first place, they say, due to the regulator's decision in 2021 to raise wholesale prices by the Consumer Price Index (CPI). And uncoincidentally, that is the year TalkTalk moved to CPI-based price rises.

Tristia Harrison, TalkTalk Group CEO said, "If Ofcom is to push ahead with tying industry's hands on CPI indexed price inflation, we urge them to urgently review similar CPI inflation for BT Openreach at a wholesale level. The link between the two is obvious; is essential for protecting both consumers and competition, and needs addressing."

Ofcom's proposal does outline how they believe providers are in a better position to calculate potential inflationary rises than consumers are however, and certainly it has been shown in their research that many consumers don't even understand the terms.

Increases to inflation at the start of 2023 saw prices go up by as much as 14.4% on broadband and 17.3% on mobile, figures that would have been very difficult, if not impossible, for potential customers to predict when they took out contracts that became affected by these rises.

The higher price rises seen in the mobile market were due to O2 using the higher Retail Price Index (RPI), instead of CPI as is used by all other providers. However, it's also been worrying Virgin Media decided to adopt RPI-based increases on contracts taken out since April 2023, an issue Which? singled them out for.

Ultimately, it's cheering to see a broadband provider see the benefit to customers of moving away from inflation-linked price rises, even if this is a select offer and hasn't been applied across the board.

While the regulator has suggested still allowing for annual price rises in the future, but only in pounds and pence, this actually raises questions as to the need for mid-contract price rises at all - if in fact, providers can set the price of the increase at the start of the contract, they could be said to be able to set a fixed price for the duration of the minimum term too, making mid-contract price rises somewhat redundant.

This move from TalkTalk very much echoes this point and is hopefully a starting signal to a more positive outcome for customers ahead of the decision from Ofcom in Spring 2024.