UK Telecoms Called Out as Bills Jump 17.3%

woman with utility bill

Great Britain’s telecom companies are under fire as consumers contend with Europe’s largest price hikes.

As The Financial Times (FT) reported Monday (Aug. 28), those price increases have been as high as 17.3% this year, drawing the attention of regulators and consumer groups.

According to the report, the price hikes typically add 3.9% to the annualized rate of consumer/retail price inflation in December or January, and can go into effect in the middle of a customer’s contract.

Natalie Hitchins, head of home and products and services at consumer advocacy group Which?, told the FT there was “little evidence to justify” the inflation plus 3.9% system, calling it an “extra premium” that risked worsening the U.K.’s cost of living crisis.

Meanwhile, the U.K.’s consumer watchdog agency, the Competition and Markets Authority, last year blasted the “anti-consumer” nature of in-contract price increases, arguing there was “unlikely to be a direct connection between RPI [retail price index] or CPI [consumer price index] and telecoms providers’ actual costs.”

However, some analysts contend that the increase of in-contract price rises are a sign of companies seeking to sustain billions in investment in full-fiber and 5G networks as earnings and revenue weaken.

“During this period of tremendous cash investment, they’re trying to make as much extra money as possible from this situation and do their best for shareholders,” said Robert Grindle, analyst at Deutsche Bank Research. “Operators could have chosen not to apply [the inflation-plus price mechanism], and they didn’t.”

The debate is happening as the telecom sector is undergoing a shift, as noted here earlier this month, currently sitting “at the intersection of future-fit and legacy technologies, resulting in hybrid networks, a variety of both frequency bands and spectrums, all serving an ever-growing abundance of connected devices.”

By employing artificial intelligence (AI) and machine learning (ML) capabilities, PYMNTS wrote, telecom companies can more quickly deal with the complexity of today’s landscape while effectively addressing the requirements of tomorrow.

“AI has a powerful ability to unify and distill data across usage, geolocation information, customer profiles and even billing; while ML can enable network automation across devices, mobile applications and networks,” PYMNTS wrote.

That report came as SK Telecom, South Korea’s largest operator, announced it was investing $100 million into the U.S.-based AI startup Anthropic with the hopes of working together to create a large language model (LLM) and AI platform.

The investment will offer Anthropic’s Claude service to Korean enterprise customers, while SK Telecom will also help Anthropic expand in the Korean market.