Hyperoptic, a UK full-fiber broadband provider, launched a new TV advertising campaign on 13 February to promote its campaign against mid-contract price rises.
The ad, created with full-service agency CHS, focuses on the upcoming “mid-contract” price increases scheduled by other operators. It shows characters discuss the planned increases and their stunned reaction when they realise the increases are written into the “small print” of their broadband contracts.
Lutfu Kitapci, chief customer officer at Hyperoptic, said the company had been working to raise awareness and lobbying for changes to mid-contract broadband price increases for the last year. He added that 60% of the estimated 15 million affected households are not aware of the coming price increases. Hyperoptic’s ad aims to educate consumers as to price hikes and encourage them to be more aware of the “small print” before they sign a contract.
Approximately 15 million UK households are expected to face price increases in both their mobile and/or broadband contracts this spring, to the tune of GBP 2 billion (US $2.4 billion), right in the middle of a major cost-of-living crisis.
Mid-contract price increases, now common in the British telecom industry, are linked to current inflations rates and were first added to many telecom contracts in mid-2021, when inflation was significantly lower. Now, of course, with inflation at a 40-year high, the upcoming price increases, of which about 60% of current customers are unaware, are expected to hit UK households like a wayward hammer wielded by a slippery-handed carpenter.
Given the ongoing cost-of-living crisis, UK regulator Ofcom last week launched an investigation into these increases, which are illegal for most other utilities. Speaking with the Guardian, Christina Luna-Esteban, director of telecoms consumer protection at Ofcom, said that one of the objectives of this investigation is to determine “whether tougher protections are needed,” given that price hikes linked to inflation can be “unpredictable,” which puts further pressure on customers’ already strained finances.
The writing on the wall here is clear: if Ofcom doesn’t like what it sees, especially in light of existing regulatory and current economic factors, the agency will take steps to address the issue, which likely means regulation.
Hyperoptic’s ad is a smart move. It effectively alerts the many telecom customers who are thus far unaware of the upcoming price increases, while also establishing Hyperoptic as a company that does not employ this practice. If Ofcom decides to regulate this area of telecom contracts, the operator has positioned itself firmly ahead of the curve. By regulating themselves well before the government steps in and forces their competitors to do so, Hyperoptic leaves customers with a more positive impression of the company. If, however, Ofcom decides extra protections are not necessary, Hyperoptic is still promoting the fact that they do not put mid-contract price increases in their contracts as a key differentiating factor: while their competitors trick users with mid-contract price increases, even in the middle of a cost-of-living crisis, Hyperoptic does not. Either way, Hyperoptic is well-positioned for a win.