At the start of September BT quietly made a subtle yet costly change to its terms & conditions. While previously the company warned customers that “prices would increase by the Consumer Price Index (CPI) rate of inflation each year”, this has now been changed to “Each year we will adjust the amount customers pay per month for their plans according to the Consumer Price Index (CPI) rate of inflation [in January 2021] plus an additional 3.9%” [charged from 31 March 2021].
BT’s explanation as to why it is doing this seems somewhat murky, being wrapped in the usual marketing speak. According to its spokesperson it is due to: “the major growth in data usage seen recently, both at home and on the move”. This is the same BT who boasted just a few short months ago that its networks could cope with whatever was thrown at them because there was plenty of spare capacity. Since capacity isn’t something you can squirrel away, it would simply be unused and unmonetised.
BT further stated it wanted to invest in its networks, products and services, simplify its packages and policies and offer support and flexibility to those “who need it most”.
The changes will affect anyone renewing or signing a new contract with BT after 1 September 2020 and will apply to BT broadband, landline, mobile and Sport customers.
While this is the first price rise for BT broadband and landline customers since 2018 when the company put up its prices twice, it is a worrying sign of things to come. Clearly the company has identified that many people are working at home and saving a little cash by doing so, and has decided to claw back some of that cash for itself.
This raises a key issue. If people are going to use home networks for business, and businesses are willing to subsidise them to do so, will we see rising prices as more telcos follow the money trail? After all, if firms cancel business subscriptions because they’ve moved to distributed working (Work from Anywhere) and no longer need centralised capacity, and if others lay off staff or go bust, how will telcos adjust for lost B2B revenues?
But the other side of this issue is the fact that there is no suggestion that people are using data outside their plans and neither are they getting anything more for the extra cash. If this rise was accompanied by a rise in QoS, reliability and service levels, then BT might find customers happier to part with their cash. But there’s no indication that this will be the case.
What’s even more curious is the timing. With huge numbers of employees facing lay off, shorting working hours and financial stress, it’s an interesting time for BT to put its neck out and indicate it intends to feather its nest just a little more. (see What you need to know about the coming billquake)
More predictably, BT – like most of the telecoms industry – continues to reward disloyalty in the form of better onboarding offers for new customers and price hikes for loyal ones.
Has BT miscalculated? This change is set to be costly for customers, but will it also be costly for BT?
While inertia is a powerful factor, people have more time on their hands than ever before to haggle and shop around because they no longer have to commute, and with lower priced broadband and mobile services readily available, could this hike be the final straw that incentives BT customers to churn?
In another move by BT, its mobile arm EE has redefined its ‘unlimited’ mobile data plans to yes, you guessed it, have limits. From now on anyone using more than 600Gb will be considered to have “non-personal” usage. Now that is an awful lot of data but it’s a 400Gb reduction from last year’s fair use limit. So how about EE stop bending the English language out of shape and call it what it now is: a 600Gb plan. Just an idea for you EE. And I won’t even charge you for it (+ 5%).
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