O2 has raised its charges for consumer and business customers by as much as 25% for existing customers just days after telecoms watchdog Ofcom published guidance aimed at preventing mid-contract bill hikes.
From March, O2 overall monthly plans will rise 2.7%, with the average tariff rising from £37 a month to £38 a month. Meanwhile call charges will rise from 35p to 40p a minute, the cost of a text will rise from 12p to 15p and a picture message will rise from 35p to 40p.
The operator defended the strategy to customers today. It said that 'with the current RPI rate of inflation at 2.7%, the cost of everything is going up. As a result, we're adjusting the price of tariffs in line with RPI.’
It said the price rise will support further investment in the network, adding: ‘We're completely modernising our entire network and investing £1.5m every day on replacing and upgrading equipment to ensure our 2G and 3G networks continue to deliver the best experience for our customers. In just 5 months our 4G network is live in 13 cities and over 120 surrounding towns giving access to over 18 million people in the UK, that's 30% of the UK population.’ But with the current RPI rate of inflation at 2.7%, the cost of everything is going up. As a result, we're adjusting the price of tariffs in line with RPI.’
O2 insisted the move did not contradict Ofcom’s guidance only only applies to customers who joined after 23 January.
It added: ‘Ofcom has confirmed that communication provider’s terms which explicitly provide for a customer’s monthly subscription to change each year in line with a specific percentage or index (like RPI) will not contravene its ‘fixed means fixed’ guidance, provided such terms and prices are made clear to customers before they sign up.
O2 says this is in line with Ofcom guidelines on bill hikes but is it really fair?