LONDON (Reuters) - Broadband providers in Britain will have to tell customers about their best deals under planned new rules from telecoms regulator Ofcom aimed at tackling a 'loyalty penalty' that makes it difficult for long-standing customers to get the cheapest package.
Ofcom said on Friday it would review broadband companies' pricing practices to examine why some customers paid more than others, and whether vulnerable customers needed extra protections to ensure they got a good deal.
Its proposed new rules would make broadband companies - as well as mobile, landline and pay-TV providers - alert customers about the best deal or 'tariff' they can offer when any discounted deal comes to an end and also every year for longstanding customers.
Providers include BT <BT.L>, Virgin Media <LBTYA.O>, Sky and TalkTalk <TALK.L>.
Ofcom said 94 percent of Britain's homes and office could get superfast broadband but less than half of them had taken it up, and around 4 million households with old-style, basic broadband were no longer in their initial contract period and could switch to superfast for the same or less money than they currently pay.
"We're concerned that many loyal broadband customers aren't getting the best deal they could," Ofcom Chief Executive Sharon White said.
"So we're reviewing broadband pricing practices and ensuring customers get clear, accurate information from their provider about the best deals they offer."
TalkTalk said it welcomed Ofcom's action.
It said it had introduced fixed low-price plans, and had actively promoted them to existing as well as new customers.
"In two years, we have lowered the gap between what new and existing customers pay to just 1-2 pounds per month, whilst the average gap in the rest of the market has grown to 13-15 pounds," TalkTalk's Chief Executive Tristia Harrison said.
Superfast broadband offers download speeds of at least 30 Mbits per second, while ultrafast broadband, typically delivered through fibre optics connections into the home, offers speeds of at least 300 Mbits per second.
(Reporting by Paul Sandle; Editing by Raissa Kasolowsky and Susan Fenton)