Today, O2 contacted customers warning them in advance of a price rise that’s in line with the 2.5% Retail Price Index (RPI) rate of inflation announced earlier this month.
The change won’t apply until your bill for April is due, but it could affect all O2 customers, whether you’re on a Pay Monthly contract or SIM-only deal, or a mobile broadband subscription.
A calculator on O2’s site lets you find out how much your monthly bills may increase by, and whether you’re affected. O2 Refresh and business customers won’t be affected by payments made on the device plan, but airtime will still be go up by 2.5%.
O2’s price changes are due to take effect from April 1, 2019, and no, sadly, it’s not an early April Fools’ joke.
But what are all of the UK networks doing, and what is the RPI anyway?
EE price rises 2019 – 2.7% from March 30
EE announced back in January that price rises of 2.7% would take place after March 30, 2019. For a customer paying £35/month, this equates to an increase of 94p/month.
Ofcom’s rules mean that mid-contract rises can only apply once every 12 months, so if you were to sign up for a new deal from March 1 2019 onwards, you’d avoid this price rise, but you’d be on the hook for an RPI-related increase in March 2020.
You can try EE’s price calculator here.
O2 price rises 2019 – 2.5% from April 1
O2 will by applying a price rise equivalent to 2.5% of what you’re currently paying, from April 1 onwards.
In an example sent to customers, O2 says that anyone currently paying £38/month would see a monthly increase of 95p.
You can try O2’s price calculator here.
Vodafone price rises 2019 – 2.5% from April 1 for business contracts, consumer contracts TBA
Vodafone says that for consumer contracts, it applies the RPI rate of inflation that’s set in March for consumer contracts, and applies that change in April.
For business contracts, Vodafone typically takes the RPI rate for January of every year (2.5% for January 2019), and applies these rises in April.
You can find more details on Vodafone’s price hikes here.
Three price rises 2019 – 2.5% from May 1
Three takes the RPI rate of interest defined in January (2.5%) but applies them a little later than the other networks – May. So if you’ve not yet heard from Three about any changes to your price plan, this could be why.
In an example given on its site, Three says that a £25/month contract would increase to £25.63/month.
“If you joined us or upgraded your phone or Mobile Broadband plan on or after 29 May 2015, your contract allows us to increase the cost of your monthly recurring charge each May by an amount up to the January Retail Price Index (RPI) rate of inflation,” the company says.
“This has been announced for January 2019 at 2.5% and you’ll see this increase on or after your May bill and from then onwards.”
You can try Three’s price calculator here.
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How can I avoid mid-price contract rises?
As mid-price rises are applied every year, one way you could avoid them is by taking out a short term contract after a certain date and then shopping around for a better deal around the time that a price rise is expected to kick in.
For example, EE says that if you signed up for a new deal from March 1, and you were able to leave before an RPI-linked price rise took effect, you would be able to avoid it.
Realistically, you’d only be able to do this on something like a SIM-only or mobile broadband plan sold on a rolling monthly basis.
You’re otherwise not really in a position to avoid any RPI-related price rises if you’ve signed up for a contract that’s due to last longer than 12 months.
What is the Retail Price Index (RPI)?
The RPI is a measure of inflation that’s published every month by the Office of National Statistics (ONS).
With regards to your mobile contract, mobile networks can raise prices mid-contract, provided that they’re in line with inflation, and don’t constitute “material detriment”, as per Ofcom’s rules.
What is Ofcom’s General Condition 9.6?
Telecoms regulator Ofcom ruled in 2014 that if mid-contract price rises issued by communications providers − whether they’re mobile networks or ISPs − are excessive, then customers are free to leave without penalty. These terms are spelled out in General Condition 9.6, aka ‘GC9.6’.
Sadly, for anyone looking at the above price rises and hoping that this means they can rip up their contract and walk away without paying, that’s not going to happen.
Ofcom explicitly states that mid-contract price rises that are related to the RPI are within its rules: “The subscriber agrees and enters into a 24-month contract for services on terms that the core subscription price will be £10 per month. The contract also contains a term to the effect that the [network] may increase the agreed core subscription price by up to a certain amount, percentage or index-linked level (such as RPI).
“Ofcom is likely to treat any exercise of the discretion to increase this agreed price during the fixed minimum term of the contract as a modification meeting GC9.6’s material detriment requirement.”
Unfortunately, Ofcom is vague on what exactly is detrimental, but if you’re stung by a price rise that’s greatly in excess of the RPI for that year, and a provider doesn’t give you at least a month’s notice of the price changes, you will be allowed to leave the contract without incurring any penalty charges, if the proposed increase is unacceptable.
Think you’re still being stung by these price rises? Let us, Ofcom and your network provider know how you feel on Twitter @TrustedReviews.