EE broadband pricing sales tactics…

[Cucaracha]

Hi,

After being a BT customer for many years (broadband/landline) I’ve recently switched & renegotiated with EE.

I have a general query about pricing structures & sales tactics/philosophy…

For instance:

EE Fibre 36 Essentials broadband is currently being offered for £29.99 per month, for a period of 24 months, with the first three months for free.  

If you look at the small print the monthly fee goes up by £3 after 12 months.  (A bit of a sneaky way to tack £36 on top).  

This means that for this 24 month contract you’ll spend 9 x £29.99 (year one) plus 12 x £32.99 (year two) = £665.79

This does seem unnecessarily complicated.  

Why not advertise the package for £27.74 per month for 24 months?  The price per month is less, (which I would have thought would be more of a draw to potential clients).  The monthly layouts are equal which makes life simpler for customers & EE alike.  (As a customer you know what you’re getting into and the price doesn’t jump about like a frog in a sock).  The final amount spent will be the same (24 x £27.74 = £665.76, basically as above, minus 3p - actually the price should be £27.74125 per month to exactly equal the above, but this seems unnecessarily pedantic).  

Does the attraction of three months for free with ‘hidden’ price increases really override honest simplicity?  Or are humans by and large just gullible apes that will sign up to anything if the first months are free?

I find the way things are currently structured strange, obfuscating & overly complex, but am sure others will enlighten me as to the various merits.

Any thoughts?

🙏💫  

[Ewan15]

Welcome!

I am hoping that Ofcom stop this practice and insist that all contracts are fixed price for their duration.

IE if you sign up for 24 months at £29.99 PCM (after the free period) it stays at that price.

The current approach which is Broadband goes up by £3 and TV Packages by £2 every April is unfair.

If you pay £29.99 then it is 10% after the first year

If you Pay £79.99 then it is less than 4% after the first year.

Hence those struggling with cost of living on the lower priced packages see the greatest percentage increases😠

[Mustrum]

It is Ofcom who have encouraged these price increases.

Mobile and Broadband suppliers have been using the inflation linked increases that were Ofcom approved for the last few years. After many complaints they allow a fixed annual increase that is published at the time the contract is taken out.

Inflation impacts Telecoms companies just as much as other suppliers and in the grand scheme of things Broadband is as cheap as it has ever been.

[bristolian]

Ofcom, the industry regulator, has deemed the concept of mid-contract prices acceptable.

Percentage-based increases were leading to uncertainty, especially during the period of double-digit inflation.

EE led what is now general practice, in introducing these fixed increases - whilst your point about lower-priced plans meaning a greater-percentage increase is completely valid, the marketing sorts have branded this "simple".

https://www.ofcom.org.uk/phones-and-broadband/bills-and-charges/ofcom-bans-mid-contract-price-rises-... may make for interesting reading.

[XRaySpeX]

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@Cucaracha wrote:

If you look at the small print the monthly fee goes up by £3 after 12 months.  

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No, not 12 months into your particular contract but every March 31st each year. Therefore it will go up twice, in March '25 & March '26, during your 2 year term. So redo your maths. I make it £701.79 over the 24 months, averaging £29.24 pm.

[XRaySpeX]

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@Ewan15 wrote:

I am hoping that Ofcom stop this practice and insist that all contracts are fixed price for their duration.

---

No, not this practice! Ofcom stopped the practice of annual price rises linked to the cost of living & ruled that annual price rises, if any, shall be fixed pounds & pence known at the start of contract.

[Cucaracha]

Yep, I stand corrected, every April is a price increase, not after 12 months.  Therefore a 24 month contract taken out now will indeed get two increases.  My maths comes to the same conclusion as yours, £701.79 over 24 months.  

(Apologies, I got my facts muddled with a BT discount that finished after 12 mths in a 24 mth contract that recently expired).    

Even so, it’s a bit of a scam to advertise this in large print as £29.99 for 24 months with the first three months free.  With tiny print then outlining the £3 increase each April.  

Why not just keep things plain & state it as £29.24 for 24 months?  Tell it like it is.

 Or is that too simple an approach in a world full of smoke & mirrors?

🤔 

[XRaySpeX]

It is smoke & mirrors. It's common practice in all industries. Witness supermarkets' offers of "Discounted: 3 for £5" when a single item costs £1.50! You just gotta be on the ball!

[Cucaracha]

I guess I’m wishing that EE, in this case, wouldn’t advertise what seems to be a fixed price of £29.99 for 24 months with the first 3 months free, in large letters, when reading the small print, this is plainly not the case.  As you say, if you took out the contract now, you’d pay three instalments of £29.99, twelve of £32.99 & six of £35.99.  So why not just cut the bulls**t & say 24 even instalments of £29.24?  It’s actually cheaper than the advertised price & a lot clearer to get your head around for everyone involved.  But I guess it doesn’t include the word ‘free’.  

Yes, nefarious sales tactics go on everywhere.  I too have shaken my head at a box of 3 x 30g Kind bars for £4.50 on a supermarket shelf with ‘sale price’ written alongside, but on the other side of the aisle you can buy exactly the same bar, in 40g version, for £1 each.  Makes no sense, except to marketing & accounting depts who presumably are finding it all hilarious & laughing all the way to the bank….? 

Personally I find this all particularly complicated in the worlds of comms & tech…for a start this world has it’s own language….plus a lot of assumptions, not least that speed = quality, (akin to the megapixel race in the world of digital cameras), that we all wish to be hooked up & available at all times on every square inch of the planet, that bells & whistles = ‘better’….and I find tv, broadband & mobile packages/contracts really impenetrable/obfuscating/unclear…but it’s taken me 54 years to even vaguely wrap my head around a guitar & a bicycle, so maybe horses for courses.  

Am longing for some honesty & simplicity in the market place.  

(But I suppose if we actually knew the truth about all our gadgets & the impacts they have, nobody would buy anything?)   

[Cucaracha]

It does indeed seem unfair to hit those with the lower priced packages the hardest.  

From a telecoms supplier’s perspective, there are probably more lower priced packages taken out in the UK than higher priced packages, so in terms of raking in ££££, it would seem they’re keeping eyes firmly ’on the money’.  

Thanks for the input.

🙏