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O2 Announce Mid-Contract Rises Despite Ofcom Ruling

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O2 Company LogoFollowing a ruling by Ofcom that anyone entering into a new contract from 23rd January can leave their service provider mid-contract if charges are increased, O2 has announced a price increase from the 1st March 2014.

The increase of around 2.7% for existing customers avoids the Ofcom ruling that was put in place last week stating that customers can leave their service provider mid-contract if prices rise.

The price increase which will take effect from 1st March 2014 applies to all customers including those that have joined O2 after 23rd January 2013 which is the date that the new Ofcom guidelines were introduced.

The mobile operator amended their terms and conditions to facilitate the new ruling which allows them to change prices once every twelve months in line with the Retail Price Index.

The last tariff increase imposed by the O2 was in February 2012 when customers saw an increase of 3.2% again in line with the Retail Price Index.

Customers that have entered into a new contract from the 23rd January (new or existing customers that have upgraded) are covered by the new Ofcom guidelines which state that monthly subscription charges will be subject to an annual increase or decrease in line with the RPI.

O2 said that as long as their pricing proposals are sufficiently transparent, and that the changes are in line with the Retail Price Index fluctuations it does not give customers the right to terminate their contract.

Non-subscription increases

The Ofcom ruling does not cover price increases to non-subscription charges and O2 have also announced that there will also be an increase to the price of calls and text messages outside of bundled minutes. Voice calls will increase from 35p per minute to 40p per minute, text messages from 12p to 15p and multi-media messages from 35p to 40p. A new one minute minimum call charge will also apply to any calls made outside of inclusive minutes.

A spokesperson for O2 stated: “Price increases are never welcome but inflation has an impact on our costs. For most of our customers it will mean an additional charge of less than 60 pence on their monthly subscription.”

The increases come just a short time after Ofcom announced that customers can leave their telephone or internet service provider whilst still under contract if charges are increased. The ruling only applies customers signing new contracts after 23rd January 2014, and small businesses (up to 10 employees).

Communications providers must now give thirty day’s notice to their customers that they are increasing prices, with customers able to cancel contracts during the agreed period without incurring a penalty.

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