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Phone Companies Hike Prices - How Much Extra Will You Pay?

February 16, 2018, 1:00 PM
  • Phone networks are putting up their monthly bill costs
  • Vodafone, O2, Three, and EE
  • Rising by 4% in some cases
  • Your rights explained
Four telecoms companies will be putting prices up in the next few months

Millions of mobile phone users will see their bills rise this year, as four major networks announce they will be hiking prices by up to 4.1%.

EE, Vodafone, Three, and O2 customers will see their bills rise over the next few months, as the networks have raised prices in line with the Retail Price Index, RPI.

RPI is a measure of inflation published by the Office of National Statistics each month, and it measures the change in cost of retail goods and services compared with that month last year.

It was 4% this January.

EE was the first to announce a price hike, saying, “Like many service providers, our pay monthly plans increase by RPI annually.

"We’re currently contacting our customers to remind them this will take effect from 30th March 2018.”

  • EE customers will see their monthly bills rise by £1.22 a month, or £14.64 a year.
  • Three spokesperson also confirmed that bills will be rising, but failed to confirm how much extra customers will have to pay.
  • O2 customers will see bills rise by 4% from April onwards, and the telecoms firm will be letting customers know from the 19th February how much extra they’ll have to pay.
  • Vodafone have confirmed that it will be raising prices in line with inflation rates.

A Vodafone spokesperson said, “All new pay-monthly contracts taken out on or after 5th May 2016 have an annual price adjustment in line with the RPI.

“For consumer contracts, we use the RPI figure published by the Office for National Statistics in March, and apply the change in April each year from 2017.”

Despite inflation rates rising, wages aren’t keeping up at the same pace, meaning that relatively, you’ll be paying even more for your phone bill.

Are Phone Companies Allowed to Hike Prices?

Unfortunately, these phone companies are allowed to impose mi-contract price rises.

There’s a clause in their small print that warns of potential changes in line with the RPI.

Can you avoid it?

If you were not first warned about the increase in charges when you signed up for the contract, then customers can leave the plan without being charged a penalty.

Ofcom states that you may also be allowed to leave without paying a charge if the rise is of “material detriment”, for example if the rise is bigger than the RPI rate.

However, most customers will have been warned about inflation hikes in the small print of their contract, so check yours before trying to leave your provider.

If you’re in a locked in contract and decide to quit, then you’ll have to pay an “exit fee”.

This is usually your monthly bill multiplied by the total number of months left in your plan, but minus VAT.

If you will not be able to afford the rise in costs, the best thing to do is to contact your provider and discuss your options.

How can you cut costs?

Consumers can take this opportunity to compare contracts and consider other deals, which can easily be done through open banking.

Sim-only deals can be better when possible, as these are excluded from mid contract rises, and can also be contract free.

When it comes to your contract renewal, make sure that you take into account inflation price hikes, and shop around for the best deal.

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