There is a warning of a rise in the price of mobile phones as some networks use the inflation rate when setting mid-contract price rises and could increase bills by up to 15% from next April.
Millions of us have shopped around for the best mobile deal and are frustrated to find the price increases mid-contract after signing on the dotted line.
Here we reveal the eight mobile networks that will impose inflation-linked mid-contract price increases and what you can do if you’re affected.
Notice of increase in the price of the mobile phone in the middle of the contract
Which suppliers are making mid-contract price increases?
Confusingly, some providers, including O2 and Virgin Mobile, previously used the older and higher Retail Price Index (RPI) inflation rate when taking price rises into account, while others use the lower than the Consumer Price Index (CPI).
The table below gives you an idea of the medium-term price increases charged by different suppliers based on last year’s inflation rates.
|RPI (7.8%) plus 3.9% = 11.7% price increase.||CPI (6.2%) plus 3.9% = 10.1% price increase||RPI (7.8%) price increase||No price increase||Ongoing contract providers (price increase does not apply)|
|O2||BT Mobile||Mobile ID||Tesco Mobile||giff gaff|
|Virgin Mobile||US||Sky Mobile*||intelligent|
|Plusnet mobile||Utility warehouse|
Source which one (opens in a new tab)
* Sky Mobile does not increase prices mid-contract, but does not offer any guarantees
**Three customers who join or upgrade from 1 Nov 22, existing customers have their prices increase by 4.5% each April, not linked to inflation.
Tres is the latest provider to link price increases to inflation.
It had previously raised contract prices by 4.5% each year, regardless of the rate of inflation, but its new terms and conditions will take the rate of inflation into account.
It will affect customers who joined or upgraded on or after November 1, 2022.
Three told their customers that, “every April, your monthly charge will increase by an amount up to the December CPI – published in January of that year – plus 3.9%”.
Can mobile providers change mid-term contract prices?
Telecoms regulator Ofcom says providers follow the rules if price increases are clearly set out in their contract and not just “included in the fine print”.
Catherine Hiley, Telecommunications Expert at Uswitch.com (opens in a new tab) said: “Most mobile and broadband providers use the rate of inflation to calculate their mid-contract price increases.”
“The Consumer Price Index (CPI) is the most common measure, but some mobile phone providers choose to use the Retail Price Index (RPI).”
The RPI is the higher of the two inflation rates and is currently 14.2%. It includes mortgage interest payments, while the lowest CPI inflation rate, currently at 11.1%, excludes mortgage interest and is based on the cost of goods and services.
Some mobile providers may even add a premium beyond inflation.
“Most include an additional percentage increase of around 3-4%, which is often justified as a contribution to investment in infrastructure and to improve the service,” says Catherine Hiley.
What can I do to avoid price increases in the medium term?
The most important thing is to check your existing contract to make sure you are aware of any potential price increases and always check the terms and conditions before switching.
Ofcom says “if your provider increases your monthly price by more than this amount, you have 30 days to get out of your contract without penalty”.
If suppliers do not detail any price increases in their contract, then in this case you have 30 days to get out of any existing contract.
Switch providers to get a cheaper deal
If your supplier has detailed planned price increases in the contract, you may need to close the contract before switching.
But if he hasn’t, or tries to charge more than any specified rate, you can give 30 days’ notice while you shop around and find a better deal, along with a supplier who won’t link price increases to inflation.
Another reason to switch providers is to stay with the same one – once you’re out of contract it means you’re paying multiple times for your phone. And depending on the calculations they use to increase prices, this could also increase your annual bills.
If you want to stick with your supplier, you can probably haggle the price of your contract. You may still face price increases in the medium term depending on your provider, but if you’ve secured a cheaper or discounted deal, these may seem more affordable.
Find a social rate
If you’re really struggling to cope with any mid-term price increases on your mobile contract, talk to your provider.
Some companies, such as EE and Vodafone, have social charges which can save you money if you are claiming certain benefits or on a low income.
Social tariffs are something that broadband companies also offer to customers in this situation.
Buy a phone and a cheap Sim deal
You can switch and save money with a Sim-only offer.
This means that instead of taking out a contract for your next phone, you can look to buy the phone together with a cheap monthly Sim deal.
“Consumers looking for a SIM-only deal, but want a newer phone, should consider buying a refurbished device.
You can save hundreds of pounds by being almost new, and you’re unlikely to notice any difference in the quality or condition of the phone,” says Catherine Hiley.
These deals usually run on a 30-day contract, so if you find a better deal and want to switch, you’re not on a long-term contract and usually only need a month’s notice.