02 and Three Mobile to hike bills for millions of customers by up to £10.50 a year
Both mobile networks link their annual price rises to January's Retail Prices Index measure of inflation, which was announced today
MILLIONS of O2 and Three mobile customers will be hit with price hikes of 2.5 per cent - which means increases of £10.50 a year for those on a £35 a month contract.
The increases will take force for pay monthly and Sim-only O2 users from April and from May for Three customers.
Both providers link their annual price rises to January's Retail Prices Index (RPI) measure of inflation, which was announced today.
O2 says just over 10million customers will be hit by the increase. Three wouldn't tell us how many customers are affected, but it has 10million users in total.
As an example of what the increase means, the hike will see 87p added to a £35 a month bill, meaning an increase of £10.50 over a year or £21 for a 24-month contract.
But O2 says customers with its Refresh tariffs will see a smaller increase as the hike is only applied to the airtime element rather than to the device element.
HOW TO CUT YOUR MOBILE BILL
FIRSTLY, decide if you’re happy with your current deal and whether you want a new deal or handset - or both.
If you’re outside the minimum term of your contract then you can leave penalty free - and you might be able to find a cheaper deal elsewhere.
The network says the increase applies to the airtime element, which is typically £18 on a £35 a month contract.
Pay-as-you-go deals are better for people who don’t regularly use their phone, while monthly contracts usually work out cheaper for those who do.
The best way to find a new deal is by checking comparison websites, such as MoneySupermarket and uSwitch.com, which compare tariffs and handset prices.
It’s also worth trying Billmonitor, it matches buyers to the best pay-monthly deal based on their previous three months of bills.
It only works if you’re a customer of EE, O2, Three, Vodafone or Tesco Mobile and you’ll need to log in with your online account details.
MobilePhoneChecker has a bill monitoring feature that recommends a tariff based on your monthly usage.
If you’re happy with your provider then it might be worth using your research to haggle a better deal.
It says a typical airtime element is £18 on a £35 a month contract, so these customers will see bills rise by 45p a month or £5.40 over a year and £10.80 over two years.
Sadly, you can't leave your contract penalty free as a result of the increases unless you're already out of your contract's minimum term.
Mobile providers can get away with hikes as long as they notify customers at the time of purchase and in their contracts that bills can rise in line with inflation each year.
A spokesperson for O2 said: "Our annual RPI adjustment this year is 2.5 per cent. 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."
While a spokesperson for Three added: “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 per cent in line with the January RPI rate of inflation published by the ONS.
"We will be contacting customers from March onwards, and these changes will be introduced during May 2019.
“We understand that price increases are frustrating but we are committed to giving our customers the best possible mobile life, whilst offering benefits as well as offers and rewards.”
More on bills
But the increases are smaller than last year when both O2 and Three upped prices by 4 per cent.
Earlier this week, EE revealed that its prices will rise by 2.7 per cent from March 31 as it bases its increases on December's RPI.
Vodafone uses February's RPI, which is announced in March, to determine annual price increases. Last year, it increased prices by 3.6 per cent.
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