Keeping you up to speed

[Kei_M]

As you can imagine, with costs such as energy bills rising fast, our running costs are increasing too. So, to make sure we can keep giving you the service you expect, the price of your package may be going up. If you have been contacted and want to find out more, click below.

https://www.virginmedia.com/help/pricechange2023 

[Anonymous]

See the recent Uswitch guide to what sort of price rise is in store for us and what we can do if/when it happens here

https://www.uswitch.com/broadband/guides/virgin-media-price-increase-what-can-customers-do

Eccerpt "if Virgin Media does proceed with a price hike in 2023, it's likely to be a notably higher amount than the £56.40 per year average amount it increased by in 2022." 

[Andrew-G]

You'll soon enough find out - I'd guess VM will look to make it as high as possible because of their poor (or negative) profitability.  I don't think VM broadband contracts yet include a mandated annual price increase formula, although equally with no formula VM have always put up prices as much as they want when they want, sometimes twice in a year. I wouldn't be at all surprised if VM soon choose to implement a formula in new contracts to track other large ISPs.  They'll certainly be looking carefully at the effect of different price rise formulae on different companies, and working out whether locking in an inflation plus rise would be beneficial.  If they mandate a formula in contract, then during a fixed-term fixed-discount contract, customers have to take that price rise without any option to leave or renegotiate, and that's potentially a lot of money for VM to help themselves to. 

Obviously where the price rise is not detailed in the contract, customers this year can re-negotiate or leave, and VM will have priced that in to their calculations.  Those out of a fixed term contract likewise can choose to leave and not pay the increase at all, but because that "out of fixed term" status means a customer is already paying a lot more than VM's average, many will be price insensitive customers who'll keep paying at the new mongo rates.   In terms of profitability, VM have always been a two speed business, where at a guess 80% of total margin comes from 20% of the customers, and that 20% will be anybody on standard tariffs, customers with loads of add-ons that they pay extra for such as additional channels, rented pods or boosters, regular pay per view, gadget squad victims, landline extras.  Some of the 20% will of course simply be people who re-contracted but didn't manage to cut a good deal, and think that three to seven quid a month represents the most they can hope for.

But none of that applies to me, because my VM contract finishes in a few weeks, and my Aquiss broadband contract has no in-contract price rises or indexation.  🤑

[Anonymous]

Yeah rub it in at the end why don't you 😂

Let us know how you get on with Acquiss and A&A. 

[Bolehill]

After such a long period of low inflation, price rises are going to be with us for a while.  The bigger the price rise, the greater the number of customers engaging their brains and thinking about switching.  Sky and Virgin will think carefully about where they pitch their offerings.

The best time to think about switching is before there's an imperative to do so.  I'm six months into an 18 month contract, and I'm thinking now.  The most critical questions are what do you actually want to buy (not what are Sky/Virgin/BT etc offering), and what broadband speed do you really need?  (I took the 1 Gbps offered because the overall deal made sense, but 250Mbps would be more than enough).

Hopefully, the free ride for sport will end at some stage.  Bundling all sport into one package isn't good for the consumer.  I have Sky Sports, but don't watch F1, Golf or Premier League football.  I do pay for these though, and I suspect that most of my monthly subscription goes to the latter.

I've experimented with a home set up: PC, TV and various content subscriptions.  This works well... just as well as Virgin, and over wi-fi.  Do your own sums to come up with a 'should cost' figure.  When negotiating on the phone have this figure in mind, and the belief that you can achieve this elsewhere if you can't get an acceptable deal.

[Andrew-G]

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@Anonymous wrote:

Yeah rub it in at the end why don't you 😂

Let us know how you get on with Acquiss and A&A. 

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Moi?  Rubbing it in?  Anyway, connections all set up and working (of sorts).  The A&A VOIP configuration of the Grandstream ATA needs some refinement by me due to a few ghost rings, but known genuine incoming and outgoing calls work properly.  I'm expecting to have that sorted in a day or so (if I can't then I'll have to port again to Vonage, but I'm not expecting it to come to that.  The Aquiss broadband, well, see for yourself:

[Andrew-G]

Bring my contribution back on-topic I'll re-post some slightly edited content that I replied to a post elsewhere since it may be useful to people concerned about a possible swingeing price hike:

An important point for everybody negotiating deals with VM at the moment is that unless agreed otherwise, VM deals are fixed discount against the standard price, meaning that VM will honour the discount for the fixed term, but can increase the underlying contract price at any time by any amount.  It's widely expected VM will bring in an inflation busting price rise this year in the region of 11-14%.  If a deal has a standard rate of say £50 a month that you negotiate down to £34, then the 12% rise would apply to the full rate, and be a £6 a month increase.  When that £6 increase is applied the contract £34 a month, that's a 17.6% increase you'll see.  So either factor that into your calculations or try to insist on a fixed price contract.   Be prepared for the possibility that they won't offer a fixed price deal, and think about your options then.  If the price increase is "only" around the 10% of CPI, then I think that Ofcom's interpretation of their own rules mean that customers in a fixed term contract can't cancel or renegotiate, if it's above CPI I think that they will be able to, but as other competitors are eyeing up similar increases, market prices may not be as attractive in a few months time as they are now.

Some small suppliers are still offering both modest incentives and fixed price contracts, although typically for 12 months rather than the 18 months the big players insist upon.  Smaller suppliers don't operate the heavily discounted customer acquisition pricing of the big players (followed by massive hikes), and a fixed price may appeal to some customers.  As a rule, you'd choose a smaller supplier for their excellence in customer service rather than as a means to save money, and the excellent ISPReview roundup is worth having a read of.  Note the differences between small ISP offers and large ISPs - for example Aquiss (who I'm now with) don't provide a router but do offer fixed price contracts, and AAISP (the gold standard for support) offer tiered data allowances for broadband a bit like mobile contracts albeit at much higher levels, although most residential customers won't be constrained by them, and there's other varied differences to the business model of the large ISPs which is vast marketing effort, huge new customer discounts, all the data you can eat, and a free hub.  There's a lot of variety and innovation in the offers in the small ISP market - it's worth checking out even if you then decide to stick with the familiar big names.

[Anonymous]

Thanks Andrew. It's a good point re the small broadband companies. They won't show up on the main price comparison sites like Uswitch but often provide great service and value. Clearly Uswitch and co also have a vested interest in stirring things up a bit too here re switch commissions etc. 

[Bolehill]

City Fibre's web site also has links to those ISP's using their network, and as Cardiffman281 has pointed out, nearly all of them don't appear on Uswitch!

[Andrew-G]

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@Anonymous wrote:

Thanks Andrew. It's a good point re the small broadband companies. They won't show up on the main price comparison sites like Uswitch but often provide great service and value. Clearly Uswitch and co also have a vested interest in stirring things up a bit too here re switch commissions etc. 

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They do want competitive switching, but only of the type that benefits them.  PCWs make their money through what amount to referral fees.  The way those are calculated and paid isn't in the slightest bit transparent, but I'd hazard a guess from experience in other residential services markets that an 18 month broadband contract would get a referral fee of around £60 to the PCW.  Almost all of the participants on PCWs are large companies with generous marketing budgets, they have the concept of a customer acquisition cost, and they can easily factor in an extra few quid - bearing in mind they'd otherwise pay sales commission to telesales agents or field sales oiks, as well as often running campaigns with incentives offered to customers. 

The PCWs will also be marketing their services heavily to anybody who will take them, and telcos are an obvious target - a couple of years back most of the money PCWs made came from energy switches, but now there's nothing to offer.  So they move on to who's the next most obvious target, and in terms of value that's the telecoms market.

Some of the time, smaller companies can compete on price with the big guys, but it still makes no sense for them to list on a PCW - a best value deal that gets high take-up would generate volumes of new customers they couldn't handle, and paying the referral fees before they've got a penny off the customer would be a challenge for cashflow.  There's also the problem that many PCW customers are very price sensitive, and will leave immediately any fixed period ends.  For VM with 5.5 m residential broadband accounts, gaining or losing several tens of thousands of extra accounts in a quarter is the normal swing of business and is easily coped with, so the lower quality of PCW customers is not material.  

[Roger_Gooner]

If you are a VM broadband-only customer you should be with a cheaper ISP already. But if you want to be with a Pay TV provider your only real options are BT TV (price increases being CPI+3.9%) or Sky (not wholly sure what Sky will be doing but their new 18-month contracts are fixed-price).

[deano2012]

Has anybody had any clarification email/letter yet from vm about these increases i was told by a reliable source a few weeks ago about this that it’s going to be one of the biggest ones yet but never said when’ if i remember right the last time i got a email around middle of January time. 

[Bolehill]

In my own experience VM don't forewarn of price increases.  The only notification you will get is when your contract expires and your new 'out of contract' price is set in your monthly bill.  That's the time to call them and re-negotiate or inform them you are leaving.

You can get some idea of price changes by checking their website from time to time to see what new customers are being offered, but that would only be a guide.  Existing customers always seem to pay more!

[deano2012]

It’s funny you should mention that because it has happened to me on the last price increase whilst i was in a 18 month contract in 2022’ i rang vm and told them that i had not had any letter or email to say it had increased and the bloke I spoke to was so rude and basically said “the price is the price” you have missed the 30 days deadline to renegotiate or cancel your contract which i was not happy about. So please be aware people 

[Anonymous]

Newsflash:It's an average of 13.8% folks.

Customers of UK ISP Virgin Media (VMO2) – specifically those that take their fixed line broadband, phone and pay TV services – are today being informed about the operator’s annual price hikes, which “on average” are set to increase by 13.8% on either 1st April or 1st May 2023 (price changes will vary according to your package).

https://www.ispreview.co.uk/index.php/2023/01/virgin-mobile-uk-confirm-price-hikes-for-broadband-tv-...

[Anonymous]

It gets worse. The annual price rise will be hard coded in to VM contracts.

Worse still VM have elected to use the higher RPI measure of inflation when many others use the lower CPI.

We are all being well and truly screw ed.

"we’re making a change to their T&Cs which introduces an annual inflation linked price rise based on the Retail Price Index +3.9%. This will come into effect from April 2024 and is then effective from April each year.”

[deano2012]

I keep checking my emails about an increase has anybody else received any since this was posted earlier thanks. 

[Roger_Gooner]

Emails are not all sent out at the same time, I haven't had mine yet.

[deano2012]

Ok thanks I’m sure we will find out soon enough in due course after seeing the latest posts 

[Andrew-G]

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@Anonymous wrote:

It gets worse. The annual price rise will be hard coded in to VM contracts.

Worse still VM have elected to use the higher RPI measure of inflation when many others use the lower CPI.

We are all being well and truly screw ed.

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Only if you stay with VM.  My price rise this year?  Nil, because Aquiss don't do in-contract price rises.  It'll almost certainly go up at the end of that because of Openreach costs, but at least it's not baked into a contract.  As soon as you get the VM increase notification, you've got up to thirty days to refuse it and cancel, and then thirty days notice.  So a month to choose to be stuffed with a monster price increase this year and a monster price increase you can't even refuse next year, or six weeks to two months to sort out a different ISP.

Make the most of the choice, this is the last time you'll have it in response to a VM price hike.

[Bolehill]

The most important thing in any contract you consider, is to think carefully about how you can get out - when, at what cost and to what alternative.

Two months to plan for an alternative sounds like plenty of time, but may well be insufficient when supplier lead times are taken into consideration.