My point is that they obviously absorb the set up costs in their model and can still make a profit from the new customer prices. I know they hope that customers will stick around after the initial contract and pay the inflated prices, but they can't guarantee that, so their pricing model cannot be reliant on that. Otherwise, they'd lock you in to a contract like £x for 12 month then £x+y for another 6 months.
'Hiking of Prices should ONLY been done in line with the "Retail Price Index'
nope. the rate of inflation has nothing to do with prices virgin/sky/bt charge.
1. the rpi is just a statistic based on around 650 every day items 2. virgin aren't part of that basket of items. 3. even if they were, the current rpi figure is just a stat of how much things have gone up. it is not an indication by how much any of those 650 items should be increased the following month. 4. after the contract introductory price you pay the going rate which again has nothing to do with the rpi.