Three and O2 reveal price rises for pay-monthly mobile phone customers

Both providers are the latest to confirm prices will rise at the rate of inflation for pay-monthly mobile customers.

Three and O2 have announced pay-monthly mobile phone customers will see their bills rise by 2.7%, the rate of Retail Price Inflation (RPI), which was recently revealed by the Office for National Statistics.

The O2 price rise, which will take effect from April, will impact all pay-monthly customers who have taken out a new deal or upgraded their package since 23 January 2014.

O2 Refresh customers, who have their bill split into two halves to cover airtime and handset costs separately, will only see the airtime portion of their bill increase.

Three pay-monthly customers will also pay 2.7% more on their bills from May, which applies to all deals taken out or upgraded since 29 May 2015.

The announced price rises follow a 1.3% bill increase planned by BT and a 2.2% expected hike from EE, while Sky plans to raise prices on its TV and broadband – though thankfully not its mobile packages – by 1.3%.

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Taking it on the chin

It is obviously frustrating for a phone provider to announce it is raising prices in the middle of your contract.

You may have budgeted precisely for what your bill will cost you every month at the outset of your contract, only to now find that it’s going to set you back a little more.

But firms are allowed to increase your bill by the rate of inflation without you being able to walk away penalty-free, so long as they warned you this was a possibility when you first took out your deal.

As a result, if this is the final straw and you want to head off to a new provider, you may have to shell out exit fees.

It’s also worth noting the current rules leave it up to the providers to decide which measurement of inflation they use when determining these price rises. 

So, while BT and Sky used the Consumer Prices Index (CPI), which is generally lower, O2 and Three went for the more substantial rise offered by using the RPI measurement.

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Get your haggling hat on

Of course, if you’re out of contract then you don’t need to worry about any exit fees and can move to a new supplier whenever you want.

It’s a good idea to do some research about what sort of deals are available on the market, even if you don’t really fancy moving to a new provider.

You can then call your existing network, armed with information about what you could get if you moved on, and ask them to match it.

These firms know it’s more costly to bring in new customers than retain existing ones, so you may end up being offered a more attractive deal than you could get just going through their online store or shopping in person.

For more information on how to negotiate a better price, check out our guide on how to haggle.

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