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And in both cases, what was there was openly explained, but people chose to ignore it.
OfCom defined the RPI+3.9% - to get TelCos back making money when previously they were very tightly constrained
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M H C
taurus excreta cerebrum vincit
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As has been said, existing contracts not affected, and new ones still allow it, but has to be quoted as a fixed amount increase instead of variable so consumers are not confused.
Ideally they would allow increases when out of contract but not at all when in contract, but Ofcom will always consider those they are regulating, arguably they are potentially in "regulatory capture", so effectively they have changed the rules to satisfy those calling for inflationary increases to be banned but left it possible to still do in contract rises to keep those they are regulating happy.
Edited by Chrysalis (Fri 13-Sep-24 07:02:01)
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The idea here is that there should be some competition on the annual increase, so if BT say £3 and Vodafone say £2 you are able to factor all that in for the term of the contract. I prefer to go with companies that don’t do annual increases.
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(Goes into supermarket)
Me: "I saw your sign, 'Jaffa Cakes from only 10p'. I'd like to buy some please."
Shop: "Certainly. They come in boxes of 24. You can't buy any fewer than that"
Me: "That's fine. So that's £2.40 then?"
Shop: "Well, no. It says 'from' 10p. The first three jaffa cakes in the box are 10p each. The next twelve are 13p each. And the remainder are 16p."
Me: "Ermm, OK, how much is that then?!"
Shop: "Oh, don't worry about that. Just hand me your credit card and I'll charge you the right amount..."
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(Goes into supermarket)
Me: "I saw your sign, 'Jaffa Cakes from only 10p'. I'd like to buy some please."
Shop: "Certainly. They come in boxes of 24. You can't buy any fewer than that"
Me: "That's fine. So that's £2.40 then?"
Shop: "Well, no. It says 'from' 10p. The first three jaffa cakes in the box are 10p each. The next twelve are 13p each. And the remainder are 16p."
Me: "Ermm, OK, how much is that then?!"
Shop: "Oh, don't worry about that. Just hand me your credit card and I'll charge you the right amount..."
TBH , this isn’t a great analogy, to compare buying anything on a contractual basis with a minimum term to a purchase of a grocery item in a shop is unrealistic , but even then it’s presented inaccurately,
To more closely reflect the pricing structure of broadband ( presumably that’s the intention) , the Jaffa Cakes wouldn’t be advised as ‘ from 10p’ , it would say 10p , and the fact that the 10p price isn’t fixed for ever , or even 24 months would be highlighted prominently, also the increase wouldn’t be from 10p to 13p ( a 30% increase ) it would be to 11p ( that’s a more reasonable expression of the relative broadband increase using a worse case broadband scenario, if you bought a bigger box, so more Jaffa Cakes to enjoy , the increase is still only 1p)
The conversation would be more like , You , ‘how much is a Jaffa Cake ? ‘ ,
Shop ‘ they are 10p , but in March next year they will be 11p and the March after that 12p ,
You haven’t had any calculation to make to know the price going forward is , it was presented at the point of sale , it up to you to proceed or take your Jaffa Cake purchase elsewhere, there are lots of outlets to buy them , in fact there may be a shop that sells them today for 11p or 12p , but guarantees not to increase the price for 24 months provided you buy one each month , there may be a shop that sells them for 9p and guarantees to not to increase the price for 24 months provided you also do the rest of your weekly or monthly shop with them , or various other incentives to buy a Jaffa Cake from them , some shops will sell a generic version of a Jaffa Cake , similar packaging, similar ingredients, but it’s not a Jaffa Cake , it may be called a Jiffa Cake to keep the legal side of the business happy , that’s what we supposedly want , a free market with choices ,
Edited by Iniltous (Sat 14-Sep-24 10:25:48)
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TBH , this isn’t a great analogy, to compare buying anything on a contractual basis with a minimum term to a purchase of a grocery item in a shop is unrealistic , but even then it’s presented inaccurately,
....
The conversation would be more like , You , ‘how much is a Jaffa Cake ? ‘ ,
Shop ‘ they are 10p , but in March next year they will be 11p and the March after that 12p , ...
Actually, I think it is a great analogy, with the month by month ISP payment corresponding to a pack of jaffa cakes. When you buy an ISP contract, you are buying a pack and the nonsense is that the price changes as you go through the pack.
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Now try to convince the supermarket to sell you a pack of Jaffa Cakes once a month for the next two years and guarantee you that the price stays the same every month.
Oliver.
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TBH , this isn’t a great analogy, to compare buying anything on a contractual basis with a minimum term to a purchase of a grocery item in a shop is unrealistic , but even then it’s presented inaccurately,
....
The conversation would be more like , You , ‘how much is a Jaffa Cake ? ‘ ,
Shop ‘ they are 10p , but in March next year they will be 11p and the March after that 12p , ...
Actually, I think it is a great analogy, with the month by month ISP payment corresponding to a pack of jaffa cakes. When you buy an ISP contract, you are buying a pack and the nonsense is that the price changes as you go through the pack.
Are the Jaffa Cakes in your Supermarket the same price as they were two years ago , did the Supermarket specifically state you would pay the same for the two years after you bought the first pack ? , what obligation did you give the supermarket to continue to buy them at the same outlet for this promise not to increase the price ? , obviously you can think it’s a great analogy, but IMHO it doesn’t bare close scrutiny.
To torture this analogy further , you buy a pack of Jaffa Cakes , although in my view the analogy was purchasing one per month for 24 months , not 24 months worth of Jaffa Cakes for a one off fee , divided over the period you want to consume them over and paid in equal interest free instalments ( in the same way you can buy broadband from some vendors paying the same price each month of the term ) but that overlooks the fact that the vendor may charge more for that Jaffa Cake ( or Cakes ) in the first place compared to those bought on a visit by visit basis , to hedge against the wholesalers price increases in the price of Jaffa Cakes , or even the factory price increases.
, if bought on that basis , and they may also charge extra for ‘extras’ , like compulsory delivery of the Jaffa Cake ( the installation fee if you will) and as I pointed out , there is choice of where to buy a Jaffa Cake anyway , if you don’t like the Jaffa Cake price in your local supermarket, go to the local market and buy them from a market vendor , of course if you buy one there and get food poisoning, and when you go back to complain ( after you recover ) that vendor has gone bust , or their entire business plan was to sell dodgy products to mug punters , take their money and disappear, then a more reliable vendor may have been the better choice
Edited by Iniltous (Sat 14-Sep-24 12:49:27)
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Now try to convince the supermarket to sell you a pack of Jaffa Cakes once a month for the next two years and guarantee you that the price stays the same every month. It is more like the supermarket saying if you want to buy a pack of jaffa cakes then you must subscribe to buying jaffa cakes every month for the next 24 months but that we are going to increase the price of the jaffa cakes every year. If you don't want a contract then either we will charge much more for the jaffa cakes or you'll have to go elsewhere.
The thing with broadband though is you are probably going to want it every month and so contracts make sense from that perspective and means a provider can have certainty of income making it easier to plan ahead. But, I don't agree with baking in price rises as they could smooth that out over the 2 years of the contract and just have a consistent price (they know how much they are going to put it up by) - the only reason for doing it like they are now is to trick customers with the headline price and hope they don't really get what will happen with the rises. It also means that people who start a contract mid way between rises would actually end up paying more on average than someone that started it just after a price rise.
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The thing with broadband though is you are probably going to want it every month and so contracts make sense from that perspective and means a provider can have certainty of income making it easier to plan ahead.
Yes, I was mainly making a point that Jaffa cakes don't work as an analogy with telecom services.
It also means that people who start a contract mid way between rises would actually end up paying more on average than someone that started it just after a price rise.
I don't follow. They should pay the same rate at time of sign up / re-contracting, and will both be subjected to the annual price increase at the same time.
Edit: But even then, we don't know that the price offered six months later will be equivalent to that of the first contract. Nor do we know what price will be offered to the person with the first contract when theirs expires.
Oliver.
Edited by Oliver341 (Mon 16-Sep-24 11:50:18)
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