Virgin Media counted the cost of letting subscribers go without penalty when they put up prices. Now, in line with other providers, more customers will face a termination fee if they want to leave.
- New contracts have built-in price rise clause. These replace contracts that allowed customers to leave penalty-free on the basis of a price rise.
- Early Disconnection Fees will now apply more widely and the £288 maximum charge cap has been removed.
- The move brings Virgin Media cable and broadband in line with the mobile side of its business, which already has price rises built in to the contract.
- Parent company Liberty Global confirmed UK customers saw the biggest price rises in the four main countries it has a presence or joint venture in.
Regulator Ofcom previously introduced rules that allowed customers to leave if their telecoms or pay TV provider increased prices during the contract period.
Providers soon found a way around this by building in price rises into the initial contact, generally adding a price rise formula based on the rate of inflation, plus an extra percentage.
The most recent price rises helped reduce Virgin Media’s UK customer base by 24,700 in the three months ending 30th June 2023.
Liberty Global CEO Mike Fries confirmed to investors last week that the company now has “a contractual right to raise prices by CPI-plus in the same way that BT and other operators have. That will become operative in 2024 because the contracts have changed.”
Biggest price rises
But compared to customers of Liberty Global-backed companies in Belgium, the Netherlands and Switzerland, UK customers had faced the largest price rises of them all.
In the UK, Virgin Media O2 has attempted to sweeten price rises with broadband speed upgrades, an HD by default TV service and extra services, such as today’s launch of 14 themed channels, at “no extra cost”.
Cap on Termination Fee removed
But anyone signing up, or re-contracting with Virgin Media for cable TV and broadband will need to carefully review the terms and conditions. Attempting to exit the contract early could become an expensive matter.
If your current contract with Virgin Media UK started prior to 4th April 2023, any Early Disconnection Fee will be capped at £288 (including VAT). The fee is potentially unlimited for new or re-contracting customers after 4th April as the cap was removed.
Clarification (24/08/23): While Mike Fries told investors VM has a right to impose CPI+ price rises (above), in fact Virgin Media O2 has confirmed it will be rising prices based on the Retail Price Index (RPI) rate of inflation in 2024. This is usually higher than the CPI rate of inflation.
Marc Thornham