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Here we go again, T-Mobile hikes prices for existing customers

Man angry on mobile

One of the UK’s major mobile operators has decided to hike its prices – even if you’re on a fixed contract. Sound like déjà vu? Orange did this last year, but now T-Mobile wants more pennies from your pocket.

T-Mobile has decided to raise prices for its contracts by 3.7% – this applies even if you’re on a fixed contract. There are a couple of contracts that are exempt: the Full Monty and You Fix tariffs are relatively new, so prices on these will stay the same. But millions of other T-Mobile customers will see their next bill rise.

T-Mobile says the price rise, just under £1 per month for a £25 contract,  is down to ‘the rising costs of the business, linked to inflation [and] our desire to continually invest in our network and propositions to provide the best service for our customers.’

But if Orange’s price rise is anything to go by (T-Mobile and Orange are both part of Everything Everywhere) talk like this is unlikely to calm the storm of customers calling to cancel their contracts. The problem is, if you’re in a contract, you can’t cancel…

Is this a breach of contract?

Well, the last time this happened we spoke to Ofcom to see if there was any way customers could complain or reject the price rises. Unfortunately, Ofcom concluded that ‘[Orange’s] price rise is not likely to be a breach of current legislation’.

How can that be? Surely if you’ve paid for a product (in this case, a phone contract at agreed fixed rates) the company shouldn’t be able to charge you more for it later on. Unfortunately this isn’t the case – mobile contract T&Cs often state that they may raise prices within the RPI, and there’s not much you can do about it.

What can T-Mobile customers do? Not much, unfortunately. When Orange’s price rises hit, some customers complained and got small payments as a gesture of goodwill, or were allowed to switch to a slightly cheaper contract.

However, this is not guaranteed, and T-Mobile is not obliged to offer people anything. T-Mobile customers will, understandably, be angry about this. The rule on below-inflation price rises is not well-known or publicised. I think this is one of the biggest problems here.

Don’t hide your T&Cs

OK, no one likes price rises, but in many situations we can see why we’re paying a bit more – if there’s a shortage of wheat we can understand the price of bread rising, for instance. But crucially, we know what price we will pay at the time that we make that purchase. The bread costs 99p – no one will turn up at our house a week later asking for an extra ten pence.

Usually we see mobile contracts in the same way. We ‘purchase’ at the point of making the contract. So I think that if it’s likely contract prices will rise, mobile phone companies should be pointing out that the ‘contract’ price isn’t absolutely set in stone.

This information shouldn’t just be buried in the terms and conditions, on a piece of paper that no one reads – it should be right up-front, in big, fat letters. Because, after all – the price is one of the most important factors in buying something.

Some people are diligent and read through the (sometimes epic) terms and conditions for any contract they make. But many don’t – in our poll on this topic, 94% of 1,036 people didn’t realise that mobile contracts weren’t at a fixed price.

Are you affected by T-Mobile’s price hike? Or are you worried that your mobile operator might be next to raise prices?

Comments

T Mobile have increased their prices above the RPI which is 3.2% for Feb. Their own T&Cs state that no cancellation charge is payable if the increase is ‘higher than any increase in the RPI for the 12 months before the month’ in which they send you the notice. Mine was dated April 2013 and the only figure available for the month before (Feb – which was released on 19th March) was 3.2%. The figure for March will not be released until the 16th April. I suspect they are using the Jan figure of 3.3% which was released on the 12th Feb, but they are in breach of their own T&Cs!