Operators decision to increase prices by 1.1 per cent in line with RPI comes under fire from uSwitch and Tesco Mobile
EE and O2 have came under fire for their decision to up mobile pricing by 1.1 per cent for customers who joined the networks between March 26 2014 and February 10 this year.
The price rises will come in to effect on March 26 and are part of an annual increase in line with the Retail Price Index, but the networks have come under fire from uSwitch analyst Ernest Doku.
Doku said: “This week’s price rises from O2 and EE will be frustrating for their existing, loyal customers. Ofcom has taken big steps to protect mobile users from mid-contract price hikes, but opportunities clearly still exist as bill payers continue to be subject to annual increases.
“Mobile networks do now make it clear when customers sign up that they will increase their prices in line with RPI once a year. In doing so, it is very hard for customers to leave their contract without penalty when this inevitably happens.
“If you are outside your minimum contract term, then you are entirely within your rights to vote with your feet, and leave without incurring any additional charges.”
The increase follows a similar price hike last year, when the same operators increased tariff costs by 2.7 per cent. The amount increased is based on guidance from the Retail Price Index, which was published by the Office for National Statistics on February 17.
In 2013, a customer backlash against mid-term price increases led to Ofcom ruling that operators must give customers 30 days notice before increasing prices.
Some operators to offer a price promise, including Three, Vodafone and Tesco Mobile, who said there was no reason for “hidden hikes” to increase prices that are already agreed with customers.
Tesco Mobile is a joint venture between the retailer and O2 and runs on the latter’s network. Tesco Mobile chief marketing officer of Simon Groves said: “Continuing the Tariff Promise into its third year demonstrates our on-going commitment to providing a fair and clear service to our customers.
“We believe there is no reason for these Hidden Hikes to increase prices agreed with customers, even at the standard rate of inflation. We want to reassure our customers of this simple fact: Tesco Mobile guarantees not to increase prices mid-contract.”
An O2 spokesperson said: “We’ve adjusted our monthly tariff charges by just 1.1% in line with RPI unlike other companies offering communication services who recently increased their monthly rentals by up to 6.5%.
“The RPI adjustment happens annually and this year means an extra charge of 19 pence 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.”
A spokesperson for EE said: “We work hard to offer the best value on our network. The price of our Pay Monthly plans increase by RPI each year and we’ve contacted customers to remind them of this. This year the typical increase will be 31p a month.”