Three ditches fixed price promise on new contracts


Customers taking out deals after May 29 will face price increases in line with RPI, leaving Vodafone as only operator to promise fixed tariff

Three has taken a U-turn on its promise to fix customer line rental for the duration of their contract, warning customers who have bought a contract after May 29 could face an increase in line with the retail price index.

The operator had initially promised not to increase prices at all, following Ofcom’s decision to clamp down on mid-contract price hikes in January last year.

The regulator ruled that customers can cancel their mobile contract if an operator opts to increase the cost of their line rental mid-term, but included a loophole that allows networks to raise prices in line with inflation.

EE and O2 both increased the cost of their contracts by 1.1 per cent after the RPI measure of inflation was released in February of this year, and Three has admitted it will follow suit next year, despite previously promising not to.

A spokesperson for Three said at the time: “Your fixed monthly recurring fee from Three will not go up in the minimum term of your contract. We support Ofcom’s approach to fixing the price for pay monthly contracts for their duration.

“We think it’s only fair that customers should have clarity around costs when they sign up to a contract.”

However, it has now emerged that customers who have signed up for a 24 month deal from May 29 will be subject to price rises, most likely to come in May next year.

Three has confirmed this, but stressed that it will only affect new customers. A spokesperson for the operator said: “We know mid-contract price increases are frustrating but as they are still common practice and we operate in one of the most competitive mobile markets in the world, we have reviewed our approach.

“In the present market, we feel re-introducing mid-contract price increases for new contracts signed on or after 29 May is the best way of maintaining investment in our network and of offering benefits which customers really value.

“We will ensure everyone who enters into a contract with us understands fully how and when the cost of their contract will change.”

Vodafone and Tesco Mobile

The U-turn leaves Vodafone has the only major operator still offering a fixed-price guarantee, which is also provided by some MVNOs, such as Tesco Mobile, who were the first to announce theirs.

A spokesperson for Vodafone said: “We’d like to reaffirm our commitment to fixing the cost of the line rental for the duration of our customer’s contracts.”

Tesco Mobilewere the first mobile provider to announce a guarantee when it launched a fixed tariff promise in 2012. A spokesperson for the O2 MVNO said: “As a network we believe customers should never have to face unexpected costs.

“Our Tariff Promise is a commitment never to raise core tariff prices mid-contract, and we’ve offered this for the last three years. There is no reason for a network to break its pledge to customers and we intend to continue honouring our promise.”