Virgin Media prices rise, will other broadband providers follow suit?

We are all aware of the increase in prices levied by the energy companies, and most of us either try to find a better deal by switching, or readjusting how we use our gas and electricity. What we do not expect however, is a rise, particularly at this time of year, for our broadband.

Today Virgin Media bucked that trend and announced that they would be putting up their charges by an extra 6.7% on average. To sweeten the deal they have also announced faster Internet speeds, to compensate for the increase in fibre optic broadband next year.

Photo: PA

Photo: PA

The price increases will take place from February 2014, but Virgin Media is hoping that the extra speed of its broadband service (up to 152Mbps) will keep customers on side.

Apparently Virgin Media review their charges on an ongoing basis, and have decided that in order to remain competitive, and to deliver the same quality of service, charges had to increase. But what is the likelihood now of other service providers following suit and hiking their charges up?

Well if the main reason that Virgin Media put up their price was to compensate for the extra broadband speed, we really shouldn’t be seeing any price rises from other companies. But it could be the case that these other service providers may now want to increase their broadband speeds, which could lead to higher charges.

Currently, BT’s Infinity 2 option currently offers download speeds of up to 76Mbps, but they have also announced their broadband customers will face a price rise of 6.5% from January 2014. Virgin Media boast that their 152Mbps service will be available to the 12.5 million homes across the UK. This sort of speed will allow customers to download a whole music album in four seconds, and an HD movie in less than four minutes.

Virgin Media’s CEO Tom Mockridge said: “As people connect more things simultaneously to the internet more often, they need powerful broadband with the bandwidth to deliver a great experience for everyone in the home. We are boosting speeds again and ensuring our customers can get even more value from their Virgin Media subscription. Our top speed will be twice as fast as BT and all the others reliant on their old copper telephony infrastructure.”

This faster broadband speed follows a number of new innovations by Virgin Media; they recently introduced SmartCall, which is an app using WiFi that allows smartphone users to use the inclusive calls they get with their Virgin Media home phone, regardless of their mobile operator or location.

Virgin Media has seen the volume of internet traffic by their customers increase by 55% in the last year, due in most part because of the many people that are streaming movies and TV programmes from their computers and tablets. It is also in no small part down to the increase in people working from home and sharing details on social media sites.

It seems that Virgin Media have pitched their price rise just in time, as Dominic Baliszewski, from website broadbandchoices.co.uk advises that: “New rules from Ofcom governing mid-contract price rises will come into effect from early 2014, forcing providers to give customers the opportunity to cancel their contract without financial penalty if they increase prices during their contract term.”

Ofcom state that the average broadband speed across the UK is 14.7Mbps, but if a customer connects to a fibre-based network, this increases to 43.6Mbps. So for those people who regularly use the internet for downloading films, music, or playing online games, the extra charges from Virgin Media may be a small price to pay for the increased 152Mbps service.

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