25th Sep 2019 10:54
(Alliance News) - The UK broadcasting regulator on Wednesday said broadband companies have committed to new measures which would cut prices for out-of-contract customers.
Ofcom said it was "concerned" some broadband customers that are out-of-contract, meaning their introductory period has ended, have been made to pay higher prices.
The regulator reported many of these customers could save money by negotiating a better deal with their current provider or switching to a new one.
Following an Ofcom review, BT Group PLC, Sky, and TalkTalk Telecom Group PLC will "allow their out-of-contract customers to get the same deals as new customers, when they take out a new contract".
Ofcom added: "The difference that any of Sky's newly contracted customers will pay when their contract expires is no more than GBP5 per month.
"From February, BT will cap the difference that existing in-contract customers pay when their contracts expire - it will confirm the amount of this cap in due course."
TalkTalk and Virgin Media Ltd will carry out annual price reviews with vulnerable customers, the regulator said, to ensure they are on the best deal.
TalkTalk and BT, alongside peers EE and Plusnet PLC, have committed to protecting out-of-contract customers from price rises above the rate of inflation.
Ofcom said while it has no legal basis to cap costs, the commitments, many of which will come into effect by March 2020, will protect customers from paying high prices.
Ofcom's review found people who sign a new deal with their current provider could pay GBP9 less per month than customers who remain out of contract. It added a third of those who negotiate a new agreement actually secured a deal where they pay less than their introductory offer.
Ofcom Consumer Director Lindsey Fussell said: "Broadband customers who are out of contract can make big savings - around GBP100 a year on average - by picking up the phone to their current provider and signing up to a better deal. And in future, everyone will be told about the best tariff on offer. Thanks to the commitments we've secured from major broadband firms, many customers - including the most vulnerable - will pay less."
Shares in TalkTalk were 1.0% lower at 101.58 pence each in London on Wednesday morning. BT's stock was trading 1.0% lower at 173.18p apiece.
By Eric Cunha; [email protected]
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