EE to increase mobile contracts by £1.50 per month, abandoning inflation based rises

BT, the parent company of EE, today announced that the company is moving away from inflation based price increases.

Prices will still increase every year, but will instead be defined in pounds and pence at a fixed rate, and will be specified when signing up for a new contract or renewing an existing contract.

The new model will take effect from today for all new contract signups and renewals across EE and BT. The contract price increase for mobile phones, SIM only, laptops, tablets and smart watches will be £1.50 a month. TV contracts will be subject to a £2 per month increase, and broadband contracts will increase by £3 per month. All out of plan charges, however, will instead be subject to a yearly 5% increase.

The date of the annual increase will stay the same, which is currently 31st March. This means new contracts will see their first price increase on 31st March 2025.

For example, if today you were to take out a new 24-month EE SIM only contract at £10 per month, the price will increase by £1.50 on the 31st March 2025, to a new monthly total of £11.50 per month. The price will increase again by £1.50 in the following year on 31st March 2026, to £13 per month - and so on.

EE and BT previously used the CPI inflation rate of the previous December plus a 3.9% fee to determine annual price increase across all contracts. The lastest price increase, which occurred on 31st March 2024, was 7.9%. This was calculated by using December 2023’s CPI rate, which was 4%, plus the EE/BT fee, which is fixed at 3.9%.

Customers who are on existing contracts that were signed before 10th April 2024 will still be subject to the previous CPI inflation based increases for the entire remaining duration of their contract. However, if they choose to renew their contract once it comes to an end, they will be moved onto the new fixed price increase model.

So what exactly is behind EE’s decision to move away from inflation based price increases? Late last year, Ofcom proposed that telecom providers should no longer subject customers to unpredictable inflation based price increases. Instead, the regulator said customers should know exactly how much their monthly bill will increase every year, defined clearly in pounds and pence, at the time of signing a contract.

The decision is basically all but confirmed at this point, however an official announcement by Ofcom is expected in spring this year, which will define the exact details and specifications that networks and providers must follow. EE has chosen to go ahead early with the expected guidelines, becoming the first provider to voluntarily switch from inflation based price increases to a fixed model - a rather smart marketing tactic.