As O2 and Virgin Mobile have increased by 17.3% their bills for making calls, sending texts, and using data, millions of consumers have taken a hit amid already skyrocketing inflation.
The government is under pressure to protect consumers, as the significant increase in mobile tariffs will be a burden in addition to the rising cost of living.
The merger between the two telecom operators under one umbrella company since 2021 has confirmed their increasing mobile tariff, increasing by 3.9% points as per the annual rate of retail price index (RPI) inflation.
The supplement charges will not apply to those O2 consumers who enrolled before March 2021 and ended up paying only the RPI increase.
The official figures on Wednesday revealed that the RPI stood at 13.4% in January, with an increase of 17.3% overall from consumer mobile tariff rates, roughly triple the growth rate of an average worker’s income. Customers will see the rise starting in April.
Rishi Sunak has promised to reduce inflation, which has been the primary goal of his economic policy while urging teachers, nurses, and other public sector employees to accept pay packages that are significantly lower than inflation for this process to be successful.
Although the Consumer Price Index (CPI), an inflation measure, fell by 10.1% in January, it is still at a record high since 1981, greatly outpaced by the increase in mobile and internet expenses.
With the increase in inflation, other telecom providers are ready to announce their mobile tariff while increasing the burden on already hard-pressed consumers, compelling them to reduce the use of daily essentials like food, clothing, and energy.
As per the shadow culture secretary, Lucy Powell, “Prices jumping by so much in one year is a serious concern,”
“Mobile is an essential to modern life, yet many people won’t be able to afford soaring mobile bills on top of energy prices, food prices, and fuel prices going up and up.”
With the widespread practice of pricing increases that were higher than inflation last week in response to mounting pressure on telecom companies, the telecom regulator, Ofcom, has launched an investigation.
It has been estimated that consumers would be forced to pay £600 million more if the providers simply tracked headline inflation. Telecom operators like BT, Vodafone, EE, and TalkTalk are in the process of revising their tariffs, allowing them to make millions of pounds annually.
Although no law can stop telecom service providers from increasing their mobile tariff through the middle of a contract, provided they do it fairly. However, a third of the consumers lack awareness that their service provider can do so.
Director of policy and advocacy at the consumer group Which? Rocio Concha expressed a worrying statement about the fact that the UK’s biggest mobile service providers are in the process of increasing their tariffs amid inflation.
“This means millions of consumers could now find themselves trapped in a lose-lose situation where they either have to accept exorbitant mid-contract price hikes this spring or pay costly exit fees to leave their contract early.”
“Which? is calling on telecoms providers to consider very carefully if this level of price increases can be justified. They should let their customers leave without penalty if they face these price hikes, and cancel 2023 mid-contract price rises for financially vulnerable consumers.”
In addition to providing better, faster, and allowing consumers to use massive amounts of data, telecom service providers have to face several cost increases, just like any other business.
Compared to the rest of the telecom service providers, the Virgin Media O2 spokesperson conveyed that the cost of the repayment of the device was frozen, which translates into average bills increasing by 10%, or 10p a day. “This is below inflation and reflects the fantastic value we provide for connectivity that is used almost constantly.”
The pricing depends upon individual companies regulated by Ofcom, as per the Department of Science, Innovation, and Technology spokesperson. “However, we understand that price rises will have a big impact on households when families are struggling to pay their bills.
“That’s why the secretary of state recently urged telecoms bosses to reconsider increasing prices above inflation during this difficult period. Thanks to our negotiations, telecoms firms have also committed to provide help with bills for customers who ask for it.”
- Published By Team Timeswire