O2 defies Ofcom ruling with new 25% contract price hike

O2 has increased its call and text charges by up to 25 per cent for existing customers just days after Ofcom revealed guidance for consumers unhappy with mid-contract price rises.

Related: Mobile and broadband users gain power to quit contracts mid-term

The mobile operator’s changes will come into effect in March with monthly plans rising by 2.7 per cent meaning a contract costing £37 per month will rise to £38 per month, though it’s the call and text charges that will sting many.

Call charges will increase from 35p to 40p per minute, text messages go from 12p to 15p with picture messages seeing a rise from 35p to 40p and the firm has attributed the increase to retail price index [RPI] inflation as well as its investment in modernisation.

“Price increases are never welcome but inflation has an impact on our costs,” O2 stated, according to TechWeekEurope. “For most of our customers it will mean an additional charge of less than 60 pence on their monthly subscription. We continue to invest in our network and the services that matter to our customers while still offering great value for money.”

The new guidance, issued by Ofcom last week, relates to contracts signed after 23 February and stipulates that mobile operators must give consumers and small-to-medium sized businesses the chance to terminate a contract without penalty if the price rises during the contract lifespan.

O2’s competitor Three went even further than that by promising never to increase prices mid-contract and supporting the move by Ofcom.

Related: Virgin Media levies 6.7% price hike on customers

“Your fixed monthly recurring fee from Three will not go up in the minimum term of your contract,” Three told TechWeekEurope. “We support Ofcom’s approach to fixing the price for pay monthly contracts for their duration. We think it’s only fair that customers should have clarity around costs when they sign up to a contract.”

Image Credit: O2