May the 26th, 2023 – As predicted, numerous Croatian telecom companies have begun raising their service prices to be in line with ongoing inflation. They’re free to do this one every twelve months going forward.
As Poslovni Dnevnik/Tanja Ivancic writes, given that the telecom companies operating in the Republic of Croatia: Hrvatski Telekom, A1 Hrvatska, Telemach Hrvatska and Iskon, have introduced an index clause in their general terms and conditions of business, they’re all going to raise their prices, or should we say ”adjust them to inflation”.
Namely, the change in the way of doing business, for which they also received a positive opinion from the regulator – HAKOM, gave Croatian telecom companies the clear opportunity to adjust their prices once a year to the average annual inflation published by the State Bureau of Statistics (CBS). The CBS also announced that last year the average inflation rate in Croatia stood at 10.8 percent.
As such, Croatian telecom companies now have the possibility to make their users comply with their new rules up to that percentage, although some have set 10 percent as the upper limit. The bad news for telecom subscribers is that after the harmonisation of the general terms and conditions has been done, no one has the option, due to the new prices based on inflation, to terminate their contracts without facing a penalty of some sort. The good news is that Croatian telecom companies can only raise their prices like this once a year, based on whatever the inflation rate is at that time.
So far, as confirmed by HAKOM, based on inflation, only A1 Hrvatska has decided to apply the so-called ”inflation clause” and as such increase their prices. As announced by A1, as of July the 1st, their prices will be increasing by 8.5 percent for tariffs, packages and options, meaning that their users will receive their first, increased bills in August. Given that Croatian telecom companies all have the obligation to notify their users of new prices thirty days before they come into effect, A1 is starting the process of notifying their users now.
As they have stated, they decided to take this step “Due to several years of unstable market conditions, major challenges in business and a high inflation rate” and further point out that “they will apply an adjustment that is less than the official inflation rate and amounts to 8.5 percent”.
The price increase refers to tariffs, packages and options from the official offer, and as they claim from A1, “even after this adjustment, A1’s offer remains the most competitive on the market” adding that “the index clause doesn’t actually apply to other billed items other than the monthly fee for tariffs, packages and options, such as the consumption of minutes, messages or internet, ICT services, one-off charges and installments for devices and the stated charges remain unchanged. In addition, our users will continue to receive the discounts to which they’re entitled in accordance with the previously agreed conditions”.
So, let’s repeat all of that, users had the right to terminate their contracts without paying a penalty until mid-March 2023, because Croatian telecom companies then changed their terms of business and introduced an index clause. Once that clause has been introduced, users no longer have the right to terminate contracts ”for free” as it were.
Croatian telecom companies can now, with a built-in index clause, adjust to inflation in the country every year, automatically, once. A1 broke the ice and was the first to do so, so it is to be expected that by the end of the year others will follow their example.
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