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The UK telecoms regulator, Ofcom, has today said they’re “disappointed” by mobile operator O2’s (Virgin Media) recent decision (here) to increase their annual mid-contract price rises beyond what customers agreed when they signed-up (often above inflation too) and then forcing that upon existing customers. But so far an expression of disappointment is all they’ll do.
Just for some context. At the start of 2025 Ofcom began requiring UK telecoms providers to adopt a new approach to mid-contract price hikes, which did away with the old percentage and inflation-based model – replacing it with one that must now set out such price rises “clearly and up-front, in pounds and pence, when a customer signs up” (here). This made annual price hikes clearer and more transparent, but not necessarily cheaper.
In response, many broadband and mobile providers introduced flat annual price increases. For example, O2 originally said they’d increase mid-contract prices by £1.80 (monthly) every April for Pay Monthly (airtime) customers, but this suddenly changed last week after they increased the level of annual hikes from £1.80 to £2.50. On top of that, they also applied this to existing customers, albeit while giving them the option of a penalty free contract exit.
The move actually isn’t the first example of such a mid-flight pricing policy change, with both Virgin Media (here) and the BT Group providers (inc. EE and Plusnet) recently doing something similar for broadband (here). But for some reason, Ofcom’s response today only seems to single out O2’s change, and they completely fail to address the fact that the policies being adopted by most providers unfairly penalise those on cheaper packages (the same increase is applied, regardless of how much your monthly package costs).
Ofcom’s Statement
We want customers to have certainty about their monthly mobile bills so they can plan their household budgets. That’s why earlier this year we banned unpredictable price rises linked to inflation and instead required providers to tell customers upfront in pounds and pence about any increases in their contract.
We are disappointed by O2’s decision. This goes against the spirit of our rules which are designed to ensure greater certainty and transparency for customers when they sign up.
Today, we’ve written to the major mobile companies reminding them of their obligations to treat customers fairly. We encourage any customer who wants to avoid these price rises to exercise their right to exit without penalty and sign up to a new deal, following our five top tips:
- Know your rights. Your provider must give 30 days’ notice and let you exit your contract penalty free if they increase prices beyond what you agreed when you signed up. That means you’re free to sign up to a new deal – either with your existing provider or with a new one.
- Shop around. Use a price comparison site to check out the best alternative deals on offer.
- Text to switch. You can switch to new mobile provider by sending a simple text message. Just text ‘INFO’ to 85075 for free to get the ball rolling and follow the easy instructions.
- Consider a social tariff. These are cheaper packages for people claiming Universal Credit, Pension Credit or other benefits. They’re delivered in the same way as normal packages, and the price won’t go up mid-contract.
- Use Ofcom’s ‘Map your Mobile’ tool. Head to Ofcom’s ‘Map Your Mobile’ tool, put in your postcode and instantly find out which provider offers the best coverage in your area.”
Naturally, the network operators would argue that they have to increase prices each year due to costs rising in other areas, such as service provision, regulation, energy and the need to invest in new network upgrades. At the same time, the level of inflation has remained much higher than it was previously forecast to be, which changes the risk and cost assessment that each provider has to make.
As usual it’s worth remembering that not all providers play the mid-contract price hikes game and quite a few smaller players do still offer fixed price terms. But for now, Ofcom can only express being “disappointed” and seems unwilling to take any firmer action, which is itself a disappointment to consumers. The calls for mid-contract hikes to be banned will no doubt continue to grow, although doing so without wrecking the flexibility to offer competitive discounts would be tricky.
UPDATE 2:05pm
We’ve had a response from O2.
An O2 spokesperson said:
“As acknowledged by Ofcom in its letter to providers, its rules do not prevent companies from increasing annual price changes – for example, to invest in improving networks. The changes we have announced in no way breach any regulatory rules.
We appreciate that price changes are never welcome, but demand for mobile connectivity is greater than ever, and any price change customers see on their bills is greatly outweighed by the £700m we invest each year into our mobile network to meet this growing demand. We have written directly to customers about this change, and they are able to exit without penalty if they wish.”