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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
Matt Park says:
11 December 2012

O2 are increasing my iPhone 4S contract by £1.15 per month, as a result of the 3.2% increase. So angry right now, as I’ve suffered from two 24 hour blackouts this year and the service has not improved at all.

Just got the email too. They are increasing my iPhone 4S contract by £1.31 per month. I have tried to get out of my contract as I got a really bad deal and they have refused unless I pay the reminder £400 of the contract. What right do they have to increase my bill. I suffered 3 24 hour blackouts this year and lost all my photos. I am really not happy about this!

O2 had some respect from users for not increasing their prices mid-contract, but with the other big players raising prices it is not surprising that O2 has done the same. This announcement will make it harder to get the phone companies to behave more responsibly.

The obvious answer it to buy a phone and have a rolling contract that can be terminated at any time.

I do hope that companies offering contracts for other services do not start playing the same game.

Tesco mobile routes through O2 and I haven’t received any price increase notifications yet. I wonder if Tesco can hold off?

I took out a new 24 month O2 contract for an iPhone4S on the 21st of November at £12.50 a month. I have just been told my bill will go up 50p from the 28th of Feb. I contacted O2 customer services and was told there was nothing they would do about it, basically we can and we will put up your “fixed” contract. They even suggested it was “less than a pint of milk”.
When I asked if I could use 3.2% more minutes without paying them I got no response.

“Fixed” is exactly what this contract is!

I have always uded O2 as pay as you go & was thinking of moving to a contract. I don’t think so!

Peter says:
11 December 2012

I am NOT happy & will probably leave o2 after 4 years with them.

Don’t like underhand moves like this!

We can lock you in and price change as we choose…unbelievable…

will be moving…have had shoddy unreliable connection since march this year and now this…

though…who hasn’t put up prices?

One of the contributors to an earlier Conversation was critical of the customer service provided by Utility Warehouse, but maybe it is no worse than that offered by the big players. UW certainly deserve to gain some customers for their response to this issue.

Helena Shaw says:
11 December 2012

How lucky am I? my contract ends March 1st, been with o2 over 10 years time to say goodbye and swap to PAYG, will also save myself over 20 quid per month, result!! so glad I saw this as my “gift” was to upgrade 1 month early, phew!!

Nadine says:
11 December 2012

My phone bill is now set to rise to £42.31 from £41. This is ridiculously unfair and they cannot justify this cost at all! All the millions being made by shareholders, here’s a thought – why doesn’t the Managing Director/CEO take a pay cut to meet the ‘rising costs’ that have suddenly appeared. What BS and yes, fixed terms should mean that.

The irony is that they have made this increase to raise extra funds but will end up losing money as customers walk away in droves.

Craig Williams says:
11 December 2012

I am so angry about this. It isn’t the amount of the couple of quid a month, it is the bare faced inequality of the contract. They have broken the terms I agreed to, and I should be able to leave and go somewhere else. So for £1.99 a month they have lost a customer of over a decade (as soon as I can escape).

Tom Doerr says:
11 December 2012

I toyed over which supplier to go with when the iPhone 5 came out the other month, after much discussion I decided to stick with o2 as I hadn’t had any problems with them. But to increase my tariff literally less than two months in to my new 24 month contract is a complete joke! I never signed anything as I made the order over the phone and the sales person never once stated price rises, I would have been well aware of that!

This just fills me with doubt over whether I have chosen the right network, if they feel obliged to increase my tariff just two months in to a two year contract, what’s not to say they won’t do the same again several times over in the 24 months I’m due to stick with them. All the while I’m left with no choice but to stick with them because Im BOUND to my end of the contract.

I get the feeling that customers with a short period of their contract left won’t be receiving these emails or price hikes as to avoid giving them a bitter taste when they are so close to being eligible to leave o2.

I just feel insulted and disappointed. o2 Customer for 3 years

Teddy Saccoh says:
11 December 2012

mine is going up by £1.15…

Nothing like consumer power any more because the mobile phone industry is a BIG 5 “monopoly”! O2 must act independently in order to bring about “competition”!!!
OFCOM act now or disappear!!!

Andy B says:
11 December 2012

I’ve just decided mid-contract that due to me not receiving any more wage at a time when inflation strikes, I need to make cuts.. I was thinking of my phone contract… You can just change this whenever you please right?? No! That is all!!

[This comment has been slightly edited for breaking our commenting guidelines. Thanks, mods.]

pete o says:
11 December 2012

o2 customer services state they can change anything they want within your contract providing they give you 30 days notice and theres nothing you can do about it!! I will look at changing when my comtracts due for renewal 10 years of loyalty counts for nothing!!!

Gary bicker says:
11 December 2012

Just upgraded with O2 yesterday for another year and then I got this email today. If I knew sooner I would probably left them or went through customer retentions to get a better deal. So glad I kept the same phone and went sim only leat still save a bit of money.

I’m with three. But my wife took out a contract out with O2 less than 2 weeks ago and has now been told her bill is going up, so she has 2 years of extra charges. She is really annoyed to say the least. She had phone for £36 a month for 2 years will only pay that for a couple now

You should be able to cancel that contract and return the phone.

Paul B says:
12 December 2012

“…gave O2 kudos for keeping its prices in check prior to the hike: ‘Seems that O2 could steal a march on their competitors’” – enough time to catch the all the new customers switching, then increase prices once they’re all tied in to new contracts.

Mine’s only just over a tenner a month and I want to stay on it as it’s a now (still excellent) discontinued tariff. Fixed should mean fixed though.

Lollybeth says:
12 December 2012

Great another price hike I can’t afford – I haven’t had a pay rise in three years yet every company in this country seems to think I have money lying around to throw at them! And yet again I have no option but to accept it.

James says:
12 December 2012

It’s not the amount, it’s the fact that they’re doing it on a contract they call ‘Fixed.’

I can forgive the connection problems more than this. O2 has just become a company I prefer not to do business with.

John Apprentice says:
12 December 2012

I extended my contract with O2 only 3 weeks ago (for another 2 years!) and got their email today saying that the tariff is going up! I didn’t know that this was legal!

The whole point of chosing and comparing different tariffs is that they shouldn’t change! What’s the point of comparing different deals if they can change the day after you sign up?

I’m unable to change the provider for another 2 years and I just feel so powerless.
What if they increased prices by 50%?? Or by 100%?? We’d have to suck it up according to this stupid Ts&Cs.

If they increase base prices than we should be offered an exit clause.

I’m in the same boat – almost exactly.
O2 have allowed themselves to increase the price once every 12 months by an unspecified amount.
If you’re a business customer they restrict themselves to up to 10% every 12 months without it being considered “unreasonable”.

Their website even has the cheek to make this the first FAQ…
http://www.o2.co.uk/prices

Are you allowed to put my price up?
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.

If you’re on a Business tariff, it’s in the terms and conditions, too. Clause 14.3 says:

(a) Telefónica increases the prices and/or tariffs set out in the Telefónica Price List and/or the Commercial Schedule in respect of that Service pursuant to clause 12 of these General Conditions and that increase is to the material disadvantage of the Customer (for the avoidance of doubt an increase in prices and/or tariffs of 10% or less in any 12 month period shall not constitute a material disadvantage of the Customer); or
(b) Telefónica substantially varies the terms of this Agreement that relate to that Service pursuant to clause 12 of these General Conditions (including the Commercial Schedule) and that variation is to the Customer’s material disadvantage, provided that such notice is provided to Telefónica within 30 days of the date that the change comes into effect.