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Providers impose price hike on broadband after five-year dip


The cost of broadband has risen for the first time in five years, it has emerged.

New research has revealed that providers have imposed a price increase of 11% - which is twice the rate of inflation.

Figures from Broadbandchoices.co.uk - a comparison website - also show that headline speeds have gone up by 29%.

For the purposes of the study, the average total first-year cost of the 10 cheapest standalone broadband packages were compared between January 2007 and 2011. In January 2007, a standalone package cost consumers £172.66, falling to £148.95 in 2008 and then again to £132.65 in 2009.

However, the price increased by £12.31 from £114.18 in 2010 to £126.49 in January this year.

Website product director Michael Phillips said it was disappointing to see the price hikes.

"The VAT rise and effects of inflation are taking their toll, but providers are clearly placing a premium on broadband-only deals in their drive to sign up customers to their bundled packages," Mr Phillips said.

"Broadband has become an essential utility for the majority of households which may be precluded if prices continue to rise - denying access to essential information and financial services."

Meanwhile, BT announced it will reduce the cost of calling mobiles from landlines from May 28.