If you're a business whose landline or broadband is supplied by BT, this Friday is a significant date for your diary. This is the day on which the cost of having a business package with Britain's largest telecoms provider will go up - and since BT has more than 60 per cent of market share, the date is significant for millions of UK businesses.
So, what can businesses do about it? Well, thanks to a rule set out by the industry regulator Ofcom in October last year, they can switch with impunity until Thursday 31st July. The Ofcom announcement stated that 'small businesses should be allowed to exit their landline, broadband or mobile contract without penalty if their provider increases the cost of their monthly deal.'
Small businesses should be allowed to exit their landline, broadband or mobile contract without penalty if their provider increases the cost of their monthly deal - Ofcom statement
It doesn't get much clearer than that - and this statement certainly beats the wilful ambiguity of BT's customer communication on the same subject. This says: 'If you switch to another provider without telling us, the charge will go onto your bill automatically. (You'll then have to get in touch with us to get it taken off.)' In other words, we can't charge you, but wecanbill you. And then you'll get in touch and we'll have an opportunity to put on the hard sell and win your custom back again.
Make of that what you will - but watch this space for another Ofcom rule that intends to eliminate this sort of conduct.
So, what's the damage of BT's price rise? Well, it depends on the kind of package a customer is on - but BT says their average bill will go up by 5.5 per cent. Interestingly, this percentage increase is preceded by the word "just" on BT's official announcement - but I think this isn't as insignificant a price rise as BT appears to believe.
If you spend, say, £200 a month on telecommunications, you're looking at an extra expense of £132 a year. Not an amount to be sniffed at when, as BT says in a different breath, "times are tough for businesses." Throw in the fact that their prices aren't particularly cheap in general (their standard line rental of £18.05, for example, is nearly twice as much as the least expensive line rental prices available) and by the end of the week lots of BT business customers will be paying much higher prices than they could be.
Significantly, after 1st August a customer's right to switch without penalty disappears - and then BT can charge their switching customers an exit fee. This is a bill that can look pretty ugly. For example, we know of a sole trader who was charged £1,180 for leaving afive-yearcontact justtwo monthsearly.
If ever you needed proof that there's little reward for loyalty in the business telecoms game, this is it. Customers who are compelled to act should do so quickly.
Jonathan Elliott is Make It Cheaper's CEO and founder. He recognises that small businesses are the lifeblood of the British economy, and is passionate about making it easy for them to save time and money, boost their profits and improve prospects for growth. As a vocal campaigner for fair treatment of SMEs by utility companies, Jonathan collected ‘SME Consumer Champion’ & ‘Most Trusted’ at the 2013 Energy Live Consultancy Awards.
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