BT Price increases - Fair?

Hi
Like many others... I am not at all happy about the BT price increases which is just under 15%.
I know their costs are increasing too but I don't agree that their costs are going up by 15% - but what do I know?!
What I do know is..
Last year in their annual statement it shows that in their consumer business BT's operating profit was = £841m
They say the total number of households they have in their consumer business is = 14million
So that's about £56 of operating profit per household on average.
I'm keen to see what their next annual statement will say and while I realise they have to provide a healthy return on investment to their shareholders, I think the price increases are inappropriate.
Please someone tell me I have missed something …

In reply to a post by SpeedyPdA:

Please someone tell me I have missed something …

You have missed the point that those who have signed up for BT and some other broadband providers on the Openreach network have agreed to this increase. There are other providers thats haven't increased their charges to the same level so people should have picked one of those rather than be unhappy with BT when they invoke what the contracts says.

You have already had Hey broadband installed so you have a way out, this issue going forward shouldn't affect you.


***Advice to everyone, read all contracts before you sign them.***

Edited by deleted (Tue 04-Apr-23 16:22:13)

You are right that Hey is now installed at my property and yes my contract did say they could increase prices every April. BT can do many things 'contractually' but it's their choice what they actually do.
What else am I missing?

If a company can increase their price they will.

Supermarkets have made huge profits but the essentials, milk, bread, etc are increasing in price every 2 weeks.

You're probably missing the few bob that BT are putting in to FTTP and 5G build.

You are missing the increases in Electricity prices they have had to pay for the last year, (hopefully these will decrease next year and reduce the increase they could apply. Also the pay rise they are paying to staff and the huge investment in FTTP that has to come from somewhere. Plus the loss of revenue from voice which is now insignificant.,

Food prices have gone up and I can see in most cases the relationship between the increase in costs in agriculture and transportation costs. In some cases, the lack of real competition allows the supermarket end of the supply chain to be very unreasonable with pricing strategies.
Maybe we need more viable competition in the telco/media sector.

Hi FibreBubble
The capital expenditures into infrastructure come out of their Openreach business, not consumer business. For regulatory reasons I believe the two need to be accounted as two different parts of BT group. But ultimately BT , along with TalkTalk and Sky pay Openreach for access to that and in fairness the cost of infrastructure does increase, but again if you breakdown the cost profile some of it is impacted by high inflation, most of it is not from what I can see. But to your exact words, a few bob goes here - yes.

Hi kitcat
In the telco industry the usual benchmark for spending on energy cost is about 8% of the total expenditure. That cost has indeed gone up a lot! But only makes up ~8% of the cost base.
Per other response to a fellow contributor, infrastructure is mainly openreach and that is not part of the consumer business, segmented in specific ways for regulatory and competition reasons.
Openreach wholesale price (which they charge to BT consumer, TalkTalk and others) generally increased but in some areas decreased, for example the newer tech saw a price decrease in real terms (less than CPI) while older servicers e.g. copper took the brunt of the increases. (https://www.openreach.co.uk/orpg/home/products/pricing/loadPricingNotifications.do).
I still don't get the full 15% and where that goes. Eagerly awaiting their next annual accounts.

I don't think fairness comes into it, just whether something is legal or not. If you want fairness then you're looking towards community interest corporations.