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Three and O2 pay-monthly mobile customers to be hit by 2.7% price rise

Mobile giants Three and O2 are raising prices, upping the cost of pay-monthly customers' mobile bills by 2.7%, can reveal.

Many major mobile firms increase costs each year in line with published inflation figures – and it's now price hike season, with a number announcing future rises. 

Three and O2 use January's Retail Prices Index (RPI) figure, announced today:

  • Three says all pay-monthly customers with a contract taken out, renewed or upgraded since 29 May 2015 will see a rise of 2.7% from this May. This includes Sim-only and mobile broadband plans, and applies regardless of the length of your contract. Last year, Three customers saw a rise of 2.5%.

  • O2 says all pay-monthly contract customers with a contract taken out, renewed or upgraded since 23 January 2014 will see a rise of 2.7% from this April. Again, this includes Sim-only and mobile broadband plans, and applies 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.

    Last year, O2 customers saw a rise of 2.5%.

We've asked Three and O2 how many customers will be affected, and will update this story when we hear back.

EE has already announced a rise of 2.2%, while many BT mobile customers will see increases of 1.3%. These rises come into force at the end of next month.

Vodafone is also set to increase pay-monthly prices, but it uses February's RPI figure, announced on Wednesday 25 March.

For more help on cutting the cost of your mobile bill, see Cheap Mobile Tips.

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.

If you're unhappy with the price rise and are currently mid-contract, make sure you note down when your contract is due to end, and start looking for new deals about a month before. Remember though that many other firms will be raising their prices by similar amounts in the coming months, so don't just leave because you're angry. Make sure you look at the figures with a cool head and only switch if it'll actually save you cash.

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, or you haven't checked for a better deal for a while.

Most should NEVER pay over £10/month for mobile use. At the moment, top Sim-only deals for low data users include 1GB of data and unlimited calls and texts from Talkmobile for £5/mth, while those looking for more data can get 6GB with unlimited calls and texts from Smarty for £7/mth. See our Cheap Mobiles and Best Sim-only Deals guides for full details and help on finding a cheap tariff.

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 detailed tips, but here are a few to get you started:

  • Benchmark the best deal elsewhere so you ask for a realistic discount.
  • Get through to the retentions (sometimes called disconnections) department. They have the most power to slash costs, as their job is to keep you.
  • Use charm and be friendly. Aggression or anger will just put their back up.
  • Don't panic if they call your bluff and say they'll disconnect you.

What do the firms say?

A Three spokesperson said: "This year, our customers will see an increase of 2.7% 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 54p per month. We will be contacting customers from March onwards, and these changes will be introduced during May 2020.

An O2 spokesperson said: "The annual RPI adjustment this year is 2.7%. Unlike some other operators who apply RPI increases to bundled tariffs, increasing both the handset and airtime costs, O2 Refresh customers only have this rate applied to their airtime plan. We're contacting our customers to let them know the change, which will be reflected from their April bill."

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