O2 has confirmed that around 8.5 million mobiles users will be hit with a 4% price hike from their April bills.
This increase is based on January’s retail prices index (RPI) rate of inflation as announced earlier this week.
Affected customers include those with pay monthly contracts, Sim-only users, mobile broadband users, and people with small- and medium-sized business contracts. Customers will be contacted about the price rise from 19 February.
Pay-as-you-go (PAYG) customers will not be impacted, while O2 customers on its ‘Refresh’ tariff, which separates the cost of the device from the cost of the minutes, texts and data, will only see the increase on the 'Airtime' element of their plan.
The telecoms provider last increased prices in April 2017, when they rose by a smaller 2.6%.
The move follows shortly on the heels of EE, which announced 4.1% price hikes earlier this week linked to December’s RPI rate.
Three has confirmed that its “pay monthly plans are subject to an annual price increase in line with the RPI rate”, however it’s yet to announce which month’s RPI rate it will use. Last year, it used January’s figures.
Vodafone has confirmed that “pay monthly contracts taken out on or after 5 May 2016 have an annual price adjustment in line with the RPI”. It says it will use February’s RPI, which will be announced in March. This will then apply to customers’ bills from April.
Can I cancel my contract penalty free?
Affected customers cannot cancel their contract penalty free as a result of this price change.
This is because under Ofcom rules, customers taking out new mobile, landline and broadband contracts from 23 January 2014 can only cancel penalty free if a provider hasn’t made clear at the point of sale that prices can rise mid-contract. O2 says it makes this clear during the sales process and in its terms and conditions.
What does O2 say?
An O2 spokesperson says: “We know that our customers want transparency and control over their monthly bills and, importantly, don’t want to be forced to pay for a phone they already own. By splitting the airtime and device plan, we’ve helped our O2 Refresh customers avoid paying millions of pounds. In addition, we’ve worked out that if we applied our price adjustment to the combined Airtime and Device Plan, like many other operators do, our O2 Refresh customers could, on average, be paying an extra £2.4 million per month. These costs are avoided because we only apply the RPI adjustment to the Airtime plan and not the Device plan.”
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