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O2 joins the party with its price hike – are you affected?

Bubbles rising

And so the last of the big five mobile phone providers has followed the others by announcing a price rise for its existing pay monthly customers. From 28 February watch your O2 bills sneak up.

As many a Convo commenter will know, O2 is not alone in the price hike move. It was only last month that we ‘celebrated’ the first year anniversary of Orange announcing its price hike. Now O2 would like to join the party.

O2’s increasing its mobile line rental by 3.2% (current inflation rate) from 28 February 2013. You’ll only be affected if you’re on a pay monthly contract (pay-as-you-go customers are exempt), but this might make the hike harder to digest as most would think a contract comes at a fixed price.

It’s due to companies’ unfair price hikes and more than 2,000 comments that we launched our Fixed Means Fixed campaign calling for fixed to really mean fixed.

O2 price rise added to your mobile phone bill

O2 points out that for individuals, the price rise isn’t huge. For example, if you’re on its £31 a month tariff, you’ll see an increase of 99p a month or nearly £12 a year. Still, it’s the principle of the thing – fixed means fixed doesn’t it? Plus, we’ve worked out that collectively O2’s customers will pay almost £45m more a year on the back of this increase.

In many of our Conversations on mobile price rises, commenters have consistently pointed to O2 as being the only major provider not to increase its prices – and it has lasted some time despite others raising prices earlier this year. JayMusgraev gave O2 kudos for keeping its prices in check prior to the hike: ‘Seems that O2 could steal a march on their competitors’.

Until now O2 has publicly stated that it had no plans to put its prices up, indeed it has made a virtue of this. And yet, it had the same clause buried in its contract as all the other mobile providers. This clause says prices can go up every 12 months as long as this isn’t higher than the current RPI rate of inflation. We asked O2, along with the other providers, to remove this clause and they refused. Now we can see why.

Remove price rise terms from contracts

O2 says it’s giving you ‘maximum’ notice of the price rise by telling you by 17 December 2012 before implementing the rise on 28 February 2013. All current customers, whether you’re new to O2 or have been with the provider for a while, are affected. An O2 spokesperson told us:

‘Price increases are never welcome and this isn’t a decision we’ve taken lightly. At a time when our competitors have been raising the prices of their tariffs, we’ve resisted. But as external costs continue to rise, we can’t keep our pay monthly prices at the current level. For over half of our pay monthly customers this will mean an increase on their bill of up to 58 pence per month.’

This is why we need a change in the industry – these clauses need to be removed so that we know prices won’t go up when we sign on the dotted line. We hope Ofcom will act swiftly to ensure mobile phone companies are made to drop hidden clauses in their contracts that allow them to hit consumers with millions of pounds worth of unexpected price increases.

Comments
Nigel F says:
23 February 2013

I had a nice surprise yesterday. I received a text from O2 saying that they are changing my roaming terms on my Simplicity 12 month SIM contract. As of next month I now only get 15Mb per day for the £1.99 daily data roaming charge instead of the 25Mb I have now. They were kind to offer another 15Mb per day for an extra £1.99! I took out this contract specifically for the data roaming benefits. They must know that staying within 15Mb is virtually impossible, whereas 25Mb, whilst difficult is achievable. I am appalled, at this change.

Salrye says:
6 March 2013

My O2 contract went up just after Christmas after being just a year into it. It went up by 33p pm. While its not a massive increase… I took out the contract in the knowledge that I would be paying the price agreed for the term agreed. O2 told me it was in their terms and conditions. Im sorry I still think its wrong and underhanded. I wasnt given the right to cancel.

O2 new subscriber says:
12 March 2013

I’ve now had a response from O2 to my complaint: they confirm that they are raising the monthly charge to £16 but have credited my account by £11.50 = 23 * 50p where 23 = number of months outstanding on the contract. Thus in effect I shall be paying the contracted £15.50 a month until they raise the charge again.

matt says:
19 March 2013

o2 say…
http://www.o2.co.uk/desktop/prices
When we first announced the price change back on 11 December 2012, the published UK inflation rate was 3.2%. Inflation is measured by the Retail Price Index (sometimes called RPI). You can find out more about the Retail Price Index and inflation here>>> http://www.ons.gov.uk/ons/rel/cpi/consumer-price-indices/october-2012/index.html

so,
Are you (o2) allowed to put my price up?
In certain circumstances, yes. It’s in our standard terms and conditions. Clause 5 says:

5.2 We may increase or decrease our Charges from time to time. If we increase our Charges (apart from for Additional Services), we’ll let you know at least 30 days before the Charges are due to go up and you’ll have the rights explained in paragraphs 5.3 and 5.4. We won’t increase your Monthly Subscription Charges more than once in any 12 month period.

Paul says:
20 March 2013

As an excuse, O2 quotes an annual inflation rate.

The problem is:

A) 02 increased my tariff only two months after I started, which is equivalent to an annual increase of more than 18%; and

B) O2 should not be increasing the tariff on a fixed price contract in the first place

Don’t you agree?

Christine Priestley says:
27 March 2013

I took out an O2 contract just before Christmas. No mention in O2 shop of price rise. I received a bill today March 27th and was surprised at a rise in monthly rental. I rang O2 and was told a text had been sent. No such text was received. My husband, also on a new O2 contract had no text either. My husband rang after me and was told they had written a letter. Neither of us received a letter!! So much for 30 days notice!! Three months into the contract and we’ve had to ring every time a bill comes for charges we don’t understand and are not justified. No compensation to date. Should have stayed with 3 Mobile.

Laurie smith says:
20 May 2013

I took an O2 contrick out through phones4u, which started on 5th dec 2012 . It was a cracking deal, or so I thought. No mention was ever made that the 24 month contract was variable on their behalf, but as usual it held me to my side.
It went up before Christmas, and the they had the decency to tell me it was going up again in February, which is what happened
This really sums up the cynical way mobile phone companies treat their customers, without any justification for their actions. Inflation is relatively low, mobiles are becoming cheaper, and the networks are now well established.
If they cannot calculate the financial implications of a two year contract, they must be incompetent.
If we.behaved like this in our professional lives, we would end up sacked, and quite correct
WHAT A DISGRACE
Laurie Smith

Mrs Brimer says:
28 January 2014

I have filed formal complaint today. I signed up in Dec 2012, for a 36 GBP per month fixed term contract for 24 months. Guess what, O2 increased last Feb and now. My 36£ monthly plan is NOW 38.15£ The elements of a contract are “offer” and “acceptance” by “competent persons” having legal capacity who exchange “consideration” to create “mutuality of obligation.” What acceptance?
Nowhere in their terms and conditions did they mention that I will have to pay 38.15£, therefore the only figure I have officially accepted is 36£. Fixed shall mean fixed. If they refuse to allow us to exit contract without penalty I will request deadlock and escalate it further to Ombudsmen. O2 is going way too far with this.

peter says:
28 January 2014

I posted on here a year ago , a few months into when it had just got going, after signing up oct 2012, for two 1 year sim only contracts at a cost of £10.50 and £20.
I was told that was the price of the contract for the period by the sales man, and of course we all know this was an outright lie.
2 months later i got the 3.5 % rise costing me a total of £6.00 over the remaining 9 months.
So after a few emails of arguments followed up by getting serveral friends to quit O2 costing them at least £500 over the next year i waited till my contracts reached there end of year and on the day, switched both to tesco got double the gigs and about the same calls and text for 22:50 yes a £10 a month reduction, and who has to provide this service at a reduced cost.
well O2 of course, so how much did there profits rise by my 3.5% rise.

well about –£494 plus the loss of continued loyal custom, and minus tescos comision a further reduction in takings for the next year of about £12 a month.

this was much more productive then getting all stressed out, vote with your feet.

hopefully others did the same as me.

Thomas Hefford says:
29 January 2014

I have just lodged a formal complaint with O2. I emailed them and am awaiting a response.

Having looked at this, I was just wondering if anyone (or the editor) could explain to me why O2 are allowed to raise their prices in line with the RPI and not the CPI. Under 8.2 of the CPI basket of goods, ‘telephone and telefax equipment and services’ is listed. As we know, the inflation of CPI is at 2%, lower than the RPI at 2.7%. Having looked at the contract – and having to ask for a customer service agent to direct me to the terms and conditions which contain the details regarding the RPI increase (I was unable to locate this document through my “online portal”) It states that the only way we consumers are allowed to walk away is if they overcharge us – ie if they charge us above the rate of inflation.
I have made O2 aware that I was unable to read a copy of the terms and conditions through their online customer portal. I’m hoping this will bear some weight when they come to respond.
I also brought up the distance selling regulations – as I was sold the contract over the phone (it was a renewal) – and don’t believe I received any t’s and c’s, nor was I made aware of their ability to increase prices. I have asked them why the terms and conditions which contain clause 5.3 are not readily/easily available to customers, and why when I wanted to view pay monthly tariff terms and conditions, i was sent to a document which does not mention RPI at all, let alone price increases.

Wish me luck, and please let me know if anyone could answer why they’re charging at RPI not CPI.

Brian says:
30 January 2014

For anyone interested, I have been advised via the o2 live chatline that emails can be sent to the following o2 email address – ComplaintsReview@o2.com

Nadine says:
31 January 2014

I moaned to o2 about the price hike and enquired about ending my contract. He gave me the whole ‘o2 haven’t raised twice in a year like t mobile’ and ‘not in many years before last’ which I just shut him down saying what they did or didn’t do 3,4,5yrs ago isn’t my concern. Then said I’m paying for something I hardly use and he empathised and said let me see what I can do…few mins later my bill from today has gone from over 45 to under 30. Result.

Dear Sharon Callanan | Telefónica UK Limited
Complaint Review Service
A few points that you have failed to grasp
I have been a customer since March 2010 I renewed my contract in March 2012 so your reply stating “Our advertising has also said ‘tariff prices may go up’ since January 2013.” Is irrelevant
Do you think for one minute I’m in the slightest bit interested in your future plans to improve this service?
We’re completely modernising our entire network and investing £1.5m every day on replacing and upgrading equipment to ensure our 2G and 3G networks continue to deliver the best experience for our customers. In just 5 months our 4G network is live in 13 cities and over 120 surrounding towns giving access to over 18 million people in the UK, that’s 30% of the UK population. In the last year, we’ve also launched O2 Refresh and we continue to offer extras such as O2 Priority Moments, O2 Gurus, O2 Wifi and O2 Recycle.
If your company can not put enough monies aside for future upgrades or improvements from the profits you are already making you really need to speak to your R+D department about planning.
Ofcom regulations came into force on the 24th January as far as I can see those regulations do not give you the right to change any part of our contract in fact the regulation are designed to do the exact opposite
I again quote
This Guidance sets out that:

Ofcom is likely to regard any increase3 to the recurring monthly subscription charge4 in a fixed-term contract as ‘materially detrimental’ to consumers;

providers should therefore give consumers at least 30 days’ notice of any such price rise and allow them to exit their contract without penalty; and

any changes to contract terms, pricing or otherwise, must be communicated clearly and transparently to consumers.

In accordance with the three bullet points above I have the right to exit my current contract without penalty.

I look forward to hearing from you shortly so that this matter can be resolved.

This is going to run and run