The price changes affect all pay-monthly subscribers who signed up to their current contract with O2 after 23 January 2014, including those with SIM-only or mobile broadband plans.
You won’t be able to dodge these price increases by switching away because they were written into your contract. O2's terms and conditions state that bills can rise each year in line with January’s Retail Price Index (RPI), a measure of inflation. January 2021's RPI was announced in February as 1.4%.
If you have an O2 Refresh contract, which splits your bill into separate airtime and handset costs, only your airtime bill will increase. O2 said customers on its most popular Refresh plan will pay just 36p more a month.
O2 says it has already contacted customers about the price adjustments. Its pay-as-you-go customers and those who signed up to their current contract before 23 January 2014 won’t be affected by the hikes. However, if you last negotiated your contract that long ago you're almost certainly out of contract and likely paying higher prices than you should. You can either enter a new contract with O2 or switch away.
Price increases from competitors will be more damaging this year. EE, Three and Vodafone have all written into their contracts that their prices can rise annually by the Consumer Price Index (CPI) rate of inflation from the previous December plus 3.9%. December 2020's CPI, as announced in January, was 0.6%, so customers under these new contracts will pay 4.5% more from this spring. However, customers who haven’t inked contracts under the new terms, which were added to contracts in the autumn, will see smaller rises.
EE is increasing its mobile prices by 1.2% or 4.5%, depending on when you signed up and under which contract terms, from 31 March.
Three is hiking its prices by either 1.5% or 4.5% from its April or May bills, again depending on when you signed up.
Vodafone customers will see their bills rise by up to 4.5% from next month.
It’s unclear if O2 will join its rivals and adopt the new model of calculating price increases for next year.
O2 was recently named the UK's most reliable mobile network by Global Wireless Solutions (GWS), which found in studies that the network performed the best in 14 out of 32 cities and on four major motorways.
Meanwhile, mobile virtual network operator Tesco Mobile, which delivers service over O2's network, has called for a ban on mid-contract price rises, which they call "misleading."
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