O2 and Three pay-monthly mobile customers face mid-contract price rises

Many major mobile firms increase costs each year in line with published inflation figures.

O2 and Three use January's Retail Prices Index (RPI) figure, which was announced last week:

• O2 says all of its pay-monthly contract customers will see a rise of 2.5% from April, in line with January's RPI rate. This will apply to all pay-monthly tariffs which were taken out or upgraded since 23 January 2014, including standard, mobile broadband and Sim-only tariffs, regardless of the length of your contract.

  If you have an O2 Refresh contract, which splits your bill into separate airtime and phone costs, you'll only see an increase on the airtime part of your bill. 

  O2 says customers will be contacted about the changes this week, but you can check what your new bill will be on the O2 website. Last year, O2 customers saw a rise of 4%.  

• Three says all its pay-monthly customers will see a rise of 2.5% on their bills from May, in line with January's RPI rate. This will apply to all pay-monthly tariffs which were taken out or upgraded after 29 May 2015, including Sim-only plans, regardless of the length of your contract.

  Three says customers will be contacted about the changes in March, but you can check what your new bill will be on the Three website. Last year, Three customers saw a rise of 4%.

EE has already announced a rise of 2.7%, which will come into effect next month. Vodafone uses February's figure, which will be announced on Wednesday 20 March. 

For more help on cutting your mobile bill, see 30+ Cheap Mobile Tips. 

Will other networks increase prices?

EE, O2 and Three aren't the only firms set to raise prices based on inflation. Here's what we know so far:

• Plusnet says it hasn't confirmed details of future price rises, but its terms and conditions say most of its mobile plans taken out or upgraded on or after 29 November 2016 will see price rises every March based on January's Consumer Prices Index (CPI) rate, announced as 1.8%. 

• Vodafone says all pay-monthly consumer mobile contracts taken out or upgraded on or after 5 May 2016 will see price rises in April based on February's RPI figure, to be published on Wednesday 20 March.

BT, however, has promised a year without price increases for its mobile and broadband customers. After March 2020, any price increases will be linked to the CPI inflation rate.

Sky Mobile also told us that it has "no plans or intentions to increase prices for customers at this time".

I'm mid-contract – can I leave penalty-free?

Unfortunately, you're unlikely to be able to. Mobile firms CAN increase prices mid-contract in line with inflation without you being able to leave penalty-free, as long as they include a warning about this in their terms and conditions. So you can't just up and leave.

A rule from telecoms regulator Ofcom means you can escape your contract penalty-free if you can successfully prove you've suffered "material detriment" as a result of a price increase – but it would be very hard to prove an RPI increase had caused this.

Make sure you note down when your contract is due to end, and start looking for new deals about a month before.

Out of contract? Try to haggle or switch

If you're out of your minimum contract term you can leave without paying any penalty, and there's a good chance you can save by switching to a better deal – especially if your original contract involved paying for a handset.

Most should NEVER pay over £10/month for mobile use, particularly given more than two-thirds of mobile users consume less than 3GB/month. See our Mobiles section and Best Sim only Deals guide for full help on finding a cheaper deal elsewhere.

Alternatively, if you're willing to stick with your network, this is a chance to haggle a better deal – especially as you have the right to leave penalty-free. See our Mobile Haggling guide for more.

'Mid-contract price rises should act as a wake-up call'

Megan French, assistant news and features editor at MoneySavingExpert.com, said: "Price rises from the big firms are unfortunately pretty much an annual event now, but that doesn't mean users should just accept them. 

"Customers who are in contract are normally still tied in after a hike, and so while they can't do anything immediately they should make sure they move to a cheaper deal at the end of their contract.

"Those out of contract, however, can do something about it now, and hopefully save a packet. Our data shows many mobile phone customers use less than 3GB of data a month, and so really shouldn't pay any more than £10 a month for a Sim-only contract."

What do the phone companies say?

A Three spokesperson said: "As with other mobile providers, our pay-monthly plans are subject to an annual price increase. This year, our customers will see an increase of 2.5% in line with the January RPI rate of inflation published by the ONS [Office for National Statistics].

"This means, for example, that a Three customer paying £20 per month will see an increase of 50p per month. We will be contacting customers from March onwards, and these changes will be introduced during May 2019."

An O2 spokesperson said: "Our annual RPI adjustment this year is 2.5%. Some other operators apply the RPI charges to the combined tariff which includes both the handset and airtime costs, while our O2 Refresh customers will only see the rate applied to their airtime plan and not the device plan.

"We'll be contacting customers next week to let them know the change which will be reflected from their April bill."