/ Technology

Mobile phone price rises: should Ofcom stick to its guns?

Fixed Means Fixed supporters cartoon

A lot has happened since we launched our Fixed Means Fixed campaign. Our formal complaint led to Ofcom launching a consultation on price rises during fixed contracts – and your views were integral to our response.

Ofcom’s consultation into price rises in the middle of fixed contracts closed last week. We’ve handed in our response and we await the outcome with baited breath.

What’s important in this is the role you’ve all played. The thousands of comments made here on Which? Conversation formed a key part of our response to Ofcom’s consultation. Fixed Means Fixed is a campaign driven by consumers, so here’s to you for helping us tell Ofcom to do the right thing.

There’s only one option that makes sense

Poll results for Ofcom consultationSo, how did we respond? Well, four options were presented in Ofcom’s consultation. Three of them, ranging from doing nothing to greater transparency of price rise terms, didn’t quite fit the bill. For instance, although we want companies to be clear about price rises, that wouldn’t change the fact that customers don’t have a chance to avoid them. Hikes have been imposed by all the major mobile providers (O2, Vodafone, Orange, T-Mobile and Three Mobile) after all.

However, Ofcom’s fourth option – allowing customers to exit contracts without penalty if providers hike prices – hits the mark. We’ve always thought that the price should stay fixed from the day it’s agreed until the end of that agreement. And if providers don’t want to keep their end of the bargain and prices do change, you should be able to legally leave without having to pay an exit penalty.

And you agreed with us. When we put all the options to you in a survey, you were overwhelmingly in favour of option four – 91% of more than 5,000 voters went for it.

Redressing the balance of power

We think option four would give you greater power and freedom to vote with your feet. You could trust the price you signed up to, and if prices do increase you can reject it and switch providers.

Moreover, it could act as an incentive for providers to stick to the advertised price throughout the contract in order to avoid losing their loyal customers to their competitors. All in all, we think that option four would change the balance of power and should lead to an environment where you get what you signed up for.

So, thank you for all your help with our Fixed Means Fixed campaign and for being a key part of our response to Ofcom. We’ll be keeping up the pressure on your behalf while the regulator considers what it does next. But in the meantime we still want to hear from you – do you think Ofcom should stick to its guns and implement option four?

Comments
Jan says:
21 April 2013

I took out a very reasonable two year contract with Talkmobile in October last year and I have had no reason for complaint until last week when I received a text advising that from next month my bill will increase by 20p a month. While this amount isn’t going to make much difference to my outgoings, I began to wonder how often these increases were likely to happen when I had thought that the amount I signed up to pay was binding on both sides for two years. I was therefore very interested to read that you have already registered a complaint with Ofcom and I look forward with interest to the outcome.

Dhara says:
30 April 2013

My situation is exactly same as Jan, when i emailed customer services, i have got standard reply from them ” From June 1st, 2013 your line rental will go up by up to 3.2% This is in line with the RPI rate of inflation, as provided by the office of national statistics.

Please see your terms below, which support this;

8.8. Your right to end this Agreement set out in Clause 8.7 does not apply if the increase to the Charges made under Clause 8.7.3 (calculated as a percentage) is no more than the increase in the Retail Prices Index Figure (“RPI”, also calculated as a percentage) for the period from the month of the last increase (if any) to the month before we send you notice of the change.

I do appreciate that this may come as a shock to you, and if this is the case, I do apologise. We’ve tried to keep the prices of our plans down for as long as possible, but due to the rise of costs within the economy, we’re no longer able to keep your tariff at its current cost.

The above changes wouldn’t create a clause for early cancellation ”

and people like us cant even cancel the contracts.

I hope OfCom will take againest this unfair charges from Talk mobile

On the other T-mobile confirmed me they will refund the price increase, which is very reassuring.

I hope talkmobil will listen to us as well….

Dave says:
13 June 2013

When are ofcom going to give their findings? It’s been far too long.

Fordy says:
5 July 2013

‘end of summer’……………………..2999.9!!