EE and O2 mobile customers to be hit with 1.3% price hike
Millions of EE and O2 mobile customers will be hit with price hikes over the next few months.
The provider is also upping the cost of some out of bundle calls; for example calls to Jersey, Guernsey and the Isle of Man will increase from 35p/minute to 45p/minute from 1 April.
EE customers meanwhile will see prices rise from 30 March, also by 1.3% in line with February’s RPI.
I’m an EE/O2 customer. Am I affected?
EE customers: Whether or not you’re affected depends on when you joined the telecoms giant:
- Joined, renewed or upgraded before 26 March 2014? Your prices will not rise as you’re covered by different terms and conditions.
- Joined, renewed or upgraded between 26 March 2014 and 10 February 2016? You’ll see prices rise by 1.3% from 30 March 2016, as your terms and conditions allow for it.
- Joined from 10 February 2016? Your prices won’t rise because these tariffs already account for current costs, according to EE. You will however, be hit with an RPI linked price increase in March 2017.
O2 customers: The price hike will affect those with pay monthly tariffs, including O2’s ‘Refresh Airtime Plan’ (but not the ‘Device Plan’ element), Sim-only tariffs, standard tariffs and mobile broadband tariffs.
Can I leave my contract penalty free?
EE customers: Regulator Ofcom’s rules say that if you joined on or after 23 January 2014 – which those affected by EE’s price rise will have done - you’re unable to leave your contract penalty free if you were told prices could rise at the outset. EE says customers joining on or after 26 March 2014 would have been told this.
O2 customers: Regulator Ofcom’s rules say that if you joined on or after 23 January 2014, you’re unable to leave your contract penalty free if you were told prices could rise at the outset. O2 says customers joining on or after 23 January 2014 would have been told this.
With regards to O2 customers who joined pre-23 January 2014, O2 says its terms and conditions allow for prices to increase by RPI once a year.
However, in this scenario Ofcom’s rules say you can leave if price rises are of “material detriment”, but it doesn’t define what this is, so you’ll have to argue this point with O2. You can use free complaints tool Resolver.co.uk to help.
What do EE and O2 say?
An EE spokesperson says: “As the UK’s biggest, fastest and most reliable network we work hard to offer our customers great value. Like many service providers, our Pay Monthly plans increase by RPI annually.
“This year our customers will see a typical rise of less than 50p a month. We’re currently contacting our customers to remind them this will take effect from 30th March 2016.”
An O2 spokesperson says: “We’ve adjusted our monthly tariff charges by 1.3% in line with the annual RPI change that we apply to our contracts each year.
“This adjustment means an extra charge of 22p per month for customers on our most popular pay monthly tariff. We continue to invest in our network and the services that matter to our customers while still offering great value for money.”
Replaced as the official measure of inflation by the consumer prices index (CPI) in December 2003. Both the Retail Price Index and CPI are attempts to estimate inflation in the UK, but they come up with different values because there are slight differences in what goods and services they cover, and how they are calculated. Unlike the CPI, the RPI includes a measure of housing costs, such as mortgage interest payments, council tax, house depreciation and buildings insurance, so changes in the interest rates affect the RPI. If interest rates are cut, it will reduce mortgage interest payments, so the RPI will fall but not the CPI. The RPI is sometimes referred to as the “headline” rate of inflation and the CPI as the “underlying” rate.
An increase in the general level of prices that persists over a period of time. The inflation rate is a measure of the average change over a period, usually 12 months. If inflation is up 4%, this means the price of products and services is 4% higher than a year earlier, requiring we spend and extra 4% to buy the same things we bought 12 months ago and that any savings and investments must generate 4% (after any taxes) to keep pace with inflation. Since 2003, the Bank of England has used the consumer prices index (CPI) as its official measure of inflation (see also retail prices index).