Welcome to this week’s On the Money newsletter. Well in excess of 1 million of us will be hit with mobile phone and broadband service price hikes in the weeks ahead as many of the State’s largest providers roll out their annual and entirely unwelcome cost-of-living increases.
But canny consumers will not only be able to sidestep the price hikes, but can - if they are smart about it - see the cost of the communications that we all depend on now fall quite considerably.
Vodafone, eir and Three all link the price of their mobile and broadband packages to inflation, with increases of 3 per cent plus the Consumer Price Index (CPI) rate of inflation rolled out each year.
When it comes to the big three, the good news, if we can call it that, is that the increases they have planned for us this year won’t be as bad as they were in 2024 or 2023.
Back then the general rate of inflation was well in excess of 5 per cent and with the 3 per cent add-on most consumers ended up paying 10 per cent more for their phone and television services when the tariffs changed in 2023 and not much less when they changed in 2024.
ComReg, the communications watchdog, has no role in pricing but it has expressed concern about the practice for many reasons.
One is the fact that the annual increase means many of the largest providers have effectively announced all the price increases they plan from now until forever, which means they are unlikely to surprise each other with price moves.
That does not seem like something that enhances competition in the market and makes life better for consumers.
What’s more, the annual pre-announced price increases take away a considerable degree of choice from all of us.
In times past we could change service providers without penalty in the immediate aftermath of any price increase on the basis that the hike was a significant change to the terms and conditions. That served as a get-out clause, and even if we did not use it at least we had the choice.
But now people are now locked into contracts irrespective of such price moves as they have been pre-warned they are coming, so there is no change to their terms and conditions when they land.
Switch
While existing customers are being hit with price increases in the weeks ahead, many companies will maintain their prices for new customers. That makes switching even more important than it has ever been.
But switching in this area is not always as easy as it might be and finding the best value broadband can be confusing - or at least more confusing than finding the best value energy provider, not least because there are more variables on the table.
One such variable is broadband speeds, with most providers offering 500Mb, 1Gb or 2Gb speeds - to those lucky enough to live in areas where such speeds are available.
Do you needs 2Gb broadband?
The temptation might always be to go for the fastest speeds - personal finances allowing - but unless you are a very, very, very heavy user of data you might end up paying for a service you don’t need or use.
That is because speeds of 500Mbps are grand for most of us and will allow all the streaming and doomscrolling on the platform formerly known as Twitter and the inspo-searching on Instagram that you and your family could possibly manage.
The annual cost of a 2Gb package with Vodafone is €360 more than a 500Mbps one so the difference is not insignificant.
What is the price after the first year?
It is also worth paying attention to the cost over an extended period and not just the top line figure you might see in the ads.
The cost of Vodafone’s 500Mbps broadband package is €35 for the first six months and then €40 a month after that - taking the cost in the first year to €450 and €480 in year two.
For its 500Mb package, Virgin charges €35 a month for the first year, which works out at €420. However, the price jumps to €70 a month in year two which means the total cost for two years of service is €1,260, or €330 more than the Vodafone offering over that extended period.
“The retailer is now facing dramatically increased costs”: Leo Crawford, former CEO of BWG Group
Contract over? Go SIM only
Moving on to mobile phones, the cheapest providers are Clear Mobile and 48, which offer a €13 per month SIM-only plan. GoMo charges €15 a month also for a SIM-only plan.
Sky Mobile is a new player in the market and offers unlimited calls, texts and 5G data for just €20 per month, while a plan with a 10Gb cap is a tenner.
The company also deserves credit for promising that if a phone is purchased as part of a plan, the cost will drop automatically once the handset has been paid for.
That makes Sky a welcome outlier, and most other companies that include handsets in the deals are not so considerate.
Under long-established rules, once you come to the end of a two-year contract with a mobile phone provider, you own your handset and you are entitled to have it unlocked.
Once it is unlocked you can switch to any operator on a SIM-only plan or you can stay with your existing provider but switch to a different tariff which means you will pay a lot less each month because you are no longer paying for the handset.
But all too often companies are happy to keep their customers on higher tariffs unless they proactively make contact to get their tariff reduced.
Don’t upgrade
Sometimes companies – and phone-makers – lure people into an upgrade, but your phone does not have to be updated every couple of years.
A person with a phone they own outright could hang on to it and switch to a SIM-only plan and save themselves hundreds of euro each year.
Buy a phone
If you are out of contract and would like a new phone it is worth doing some sums - it might save you money to buy a handset outright rather than locking yourself into a 24-month contract, for instance - and don’t let yourself be bamboozled by the promise of vast amounts of data.
A package with loads of data might make financial sense but if you are not a heavy data user or spend most of your time in areas covered by wifi you might end up paying for data you never use.
It is also worth asking your existing provider for a deal, and if the person you are talking to says no ask to talk to someone in their retention unit - they are better equipped to do a deal.
You can contact us at OnTheMoney@irishtimes.com with personal finance questions you would like to see us address. If you missed last week’s newsletter by Dominic Coyle on how to cut your electricity bill, you can read it here
