Telecommunications Operators Raise Prices Here’s When It Will Be Cheaper

The chain of price hikes goes like this: network infrastructure owners raise the prices of their services, leading to higher costs for operators. To avoid losses, these operators then increase their customers' bills. They promise that we’ll pay less only when inflation drops.

It’s Going to Get More Expensive

According to the Polish Central Statistical Office (GUS), inflation in Poland was 16.6% in December 2022. Rising prices will also affect the telecommunications services sector. The biggest companies in this industry are preparing for price hikes.

According to "Rzeczpospolita," the higher operating costs of telecommunications operators will lead to increased fees for service recipients. Operators who used EU funds to build networks will need to ask the Office of Electronic Communications for permission to raise prices. For example, Fiberhost (managing open fiber-optic networks) will be able to increase fees by about 10%.

Entrepreneurs’ Creativity

Some operators found a way to avoid procedural complications related to price increases some time ago. Orange, Play, and T-Mobile decided to use so-called inflation clauses, allowing them to modify prices during the contract term. The extent of the increases would depend on the average annual consumer price index announced by GUS.

For Orange, increases will occur if prices rise by at least 3.5% compared to the previous year. T-Mobile plans similar actions if the average annual inflation rate reaches 3%. Play has anticipated various scenarios justifying price changes, including a 3% inflation rate and changes in the euro exchange rate.

The Office of Competition and Consumer Protection (UOKiK) is reviewing the legality of these inflation clauses. UOKiK Chairman Tomasz Chróstny believes such provisions do not equally protect the interests of both parties in the agreement.

The Worst Is Yet to Come

The average annual consumer price index in 2022 compared to 2021 was 114.4 (a 14.4% price increase). The National Bank of Poland (NBP) predicts that inflation will peak in January and February 2023, potentially exceeding the critical 20% mark.

A bit of optimism amidst these grim figures is that the zero VAT rate on food will be maintained at least until June 30 this year.

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