RPI - 2024

[Dave-O2]

Hey folks 

Every year, we adjust the prices of our products and services to be in line with the Retail Price Index (RPI) rate of inflation as is set out in your terms.

From April 2024, the monthly price of your mobile plan will be increasing. We will be letting you know so you can plan ahead and be prepared.

If you joined from 8 February 2024 then you will not see a price increase until April 2025.

This years RPI was published on 14 February and is 4.9%

Some more details can be seen HERE and in the below FAQs ↘️

What’s happening?

Spoiler

Each year we introduce an annual price adjustment to our mobile tariff prices for existing
customers based on the RPI (Retail Price Index) rate. In 2021 we introduced RPI + 3.9% for new
and upgrading customers. The RPI rate was published on 14 February. Starting from late February, impacted O2 customers will receive a communication informing them directly of their price increase.

Why are prices changing?

Spoiler

This is a contractual term which we have to apply consistently, but in addition to this, we are facing
substantial increases in the costs associated with running our network and supporting our
customers. As well as impacting households, higher inflation has a significant impact on our own business costs – from energy to equipment.

We appreciate that price increases are never welcome, but with demand for connectivity greater than ever, it is vital that VMO2 is able to keep investing in the fast and reliable services consumers rely on. Customer demand for data has almost doubled in the last three years, so we are investing to increase network capacity and roll out 5G coverage, recently surpassing 50% of the population. We are committed to continuing to deliver the best possible value and experience for our customers.

How do you justify these price increases?

Spoiler

We recognise price changes are never welcome, and always balance keeping our prices
competitive with the need to continue investing. We continue to provide excellent value for
connectivity our customers are using more than ever. For example, mobile usage was up by 26%
last year. We want to keep innovating and improving the services that our customers use and love. 

Hasn’t Ofcom said you can’t do this?

Spoiler

Ofcom’s recent announcement and consultation don’t impact this price rise. Ofcom is currently consulting on its proposals to change in-contract price rises for future contracts,with a final decision set to be published in spring 2024 and any new rules to come into effect after that. We will of course comply with any new rules or guidance that may come into effect at the appropriate time.

Can I cancel my contract as a result of this increase?

Spoiler

Customers aren’t given a right to cancel because of this price increase. Customers who joined prior to 25 March 2021, were informed when they took out or upgraded their contract that their Pay Monthly airtime tariff will be adjusted annually in line with the retail price index rate of inflation in their April bill. Those who joined or upgraded after 25 March 2021 were also notified at point of sale that their bill
will rise by the rate of RPI + 3.9% each April.

All customers are required to check a box when taking out a new contract/upgrade in store or on online, which confirms their agreement that the tariff will increase annually. Customers on the phone agree verbally to a mandatory compliance script they’re read by agents. This is also provided to customers in their T&Cs.

Customers on O2 Refresh can leave anytime by paying off their Device Plan. Customers who took out a contract after certain date can pay off their device plan in installments. However, just to remind you, if you took out your plan after 17 December 2021 your airtime and device plans unlink after 24 months, which means that after this point you can either continue with your airtime and device plan, cancel your airtime plan and continue paying off your device plan in instalments, or cancel both your airtime and device plan as long as you pay off your device plan in full.

I have a discounted tariff, do you apply RPI /RPI+ to the discounted rate or the original tariff?

Spoiler

We apply RPI to the discounted rate that the customer pays each month.

Which customers will have the RPI increase applied to them?

Spoiler

The price adjustment will be applied to Pay Monthly, Sim Only, Watch & Mobile Broadband. Pay & Go customers aren't affected.

I’m on a non-Refresh tariff, will RPI be applied to my whole bill?

Spoiler

Yes. On O2 Refresh, we only apply price change to the airtime portion of the bill.

Does this affect other services like bolt ons?

Spoiler

The price of a Bolt On is unaffected. This relates only to the monthly airtime plan charge for
Consumer customers.

You can find more help and advice on this, including a useful calculator which will show you what your NEW monthly bill amount will be and how it's worked out HERE

[laura114]

Ofcom bans mid-contract price rises linked to inflation - Ofcom

Fortunately these price rises were be allowed going forwards 

[pgn]

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@laura114 wrote:

Ofcom bans mid-contract price rises linked to inflation - Ofcom

Fortunately these price rises were be allowed going forwards 

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Not sure exactly what you are trying to say, @laura114 - but up above, pending rewrite in line with O2's plans to comply with the Ofcom directive...

Is that what you meant?

[MI5]

and therein lies the problem.... the word "guidance" leaving companies free will to increase to whatever they wish.

[pgn]

Any update @Dave-O2 on when and how O2 will comply with the OFCOM ruling regarding annual inflation-linked increase (currently RPI +3.9% for O2 (and for VM!))?

The O2 upgrade page still indicates as below - but other operators have to a flat charge (see end of post).

Looking to upgrade?

Good news - you can upgrade today

You can choose a brand new phone or SIM Only plan. Charges may apply.

†Monthly price of your Airtime Plan will increase each April from April 2025 by the Retail Price Index rate of inflation announced in February each year plus 3.9%.
If RPI is negative, we’ll only apply the 3.9%. Excludes Essential Plan.
See o2.co.uk/prices Opens in new tab

Don’t forget, you can cancel your upgrade within 14 days if you change your mind.

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Vodafone has already announced that in 2025, it will stop annual inflation-based price rises and introduce a £3 price rise on the 1st of April. This will be a welcome change for customers on more expensive contracts as an inflation-based price rise would have increased their bill by over £3 a month. [20 Aug 2024]

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EE customers:

• Mobile customers: An extra £1.50 per month from March 31, 2025
• Connected devices: £1.50 per month
• TV customers: £2 per month
• Broadband customers: £3 per month
• Out-of-bundle services: 5% annual increase

[Enlli]

And Three

Three UK has today announced a new pricing structure for annual price rises to provide greater clarity for its mobile and broadband customers. The new pricing model will outline annual price increases in “pounds and pence” with the amount depending on customers’ data allowance to allow them to better plan ahead.

Contracts will increase by between £1 and £1.50 a month, dependent on the data allowance of a contract. Home Broadband customers will see annual rises capped at £2 a month per contract, significantly below what any other large provider has announced.

The new pricing structure for mobile customers has been designed to ensure that increases for customers are fair and based on a customer’s data allowance, rather than a blanket approach that applies the same rise regardless of what a customer is paying currently.

Under the new pricing structure, each year mobile customers will see the following increases depending on their data allowance:

4GB or less: £1 more a month

5GB-99GB: £1.25 more a month

100GB or more: £1.50 more a month

[Oxonian]

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@MI5 wrote:

and therein lies the problem.... the word "guidance" leaving companies free will to increase to whatever they wish.

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Agreed @MI5. And I cannot see anything to stop the MNOs simply abolishing certain budget tariffs and replacing them with something more expensive ? 

Of course, the MNOs would not want to incur the wrath of OFCOM, our hugely incisive and interventionist regulator. 👍  

[Enlli]

Whatever it turns out to be I'm taking bets on it being higher than the other three. 

[Dave-O2]

Hey @pgn 

There is no further information to share on this at the moment, please keep your eyes peeled for any future updates 😁