Mobile phone 'pay as you go' tariffs are shooting up for customers from tomorrow, as phone companies try to claw back some of the money they have lost through regulatory changes enforced by Ofcom.
Orange is putting up its costs tomorrow; its minimum call charge for pay as you go customers will rise from 20p to 25p.
Price changes for Vodafone customers will happen on 14 July. It is upping the minimum call charge on some contracts from 15p to 25p, and the cost of the call will increase from 21p to 25p a minute. It is also increasing the cost of sending a text message from 10p to 12p.
Both companies have blamed Ofcom for the change in prices. They say that by increasing prices they can recoup the losses suffered by regulatory changes.
Changes by Ofcom mean phone companies have had to reduce the amount they receive for incoming phone calls. This 'termination rate' was cut from 4.18p to 2.66p a minute earlier this year, and there are plans to reduce it further.
But Elizabeth de Winton, spokesperson from Ofcom, says there is a lot of competition in the sector and customers can still get a good deal. She advises customers to use comparison websites like Billmonitor or Mobilife to find the best deal.
"When we cut wholesale mobile termination rates - the high rates that mobile operators were charging each other to end calls on their networks - we did so in a way that would increase choice for consumers and lead to cheaper landline calls. We have already seen some operators, including BT, improving deals for consumers as a result of our decision," she adds.
Vodafone is offering a sweetener to customers on pay as you go through its 'Freebees' range, which gives extra minutes and texts every time they top up.
A spokesperson from Vodafone said: "This price rise comes after recent regulatory changes. During our discussions with Ofcom over mobile termination rates, we stressed that if the rates came down rapidly and dramatically, the cost of pay as you go was likely to rise as a consequence."
Orange echoed the same sentiment, but it added that although prices are going up, pay as you go customers can still save money on its 'Extras' range.