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Price hike of 17.3% for millions of Virgin Mobile and O2 customers

Written by: Rebecca Goodman
Millions of Virgin Mobile and O2 customers will see a mid-contract price hike of up to 17.3% from 1 April.

The price hike will apply to the minutes, texts and data portion of a phone contract, and not to the money repaid on a handset.

It applies to all Virgin Mobile contracts and most O2 contracts, as confirmed by the parent company of both brands, Virgin Media O2.

The news comes as Ofcom has launched an investigation into mid-contract price rises, after criticisms that these hikes are unfair to consumers.

Several mobile phone and broadband providers have confirmed mid-contract price rises from April.

Companies are allowed to push prices up halfway through a contract if the price hike is written into the terms and conditions of a new contract.

These rises mean customers have little choice but to stay with a provider and pay the higher price, or pay a penalty for ending a contract early. While customers who are out of a contract are free to move without paying a fee for doing so.

See’s How millions can avoid the 17% April broadband price hikes for more ways you could avoid the inflation-busting bill rises.

Virgin Mobile price hike

The price hike from Virgin Mobile O2 was expected as it is allowed to push up prices mid-contract.

In the terms and conditions of its contracts, it states that an annual price hike may happen, which will be based on the January Retail Prices Index for inflation (RPI), which was 13.4% this year, plus 3.9%.

Mobile providers can choose which rate of inflation they follow, either the RPI or the lower CPI, which was 10.1% for January.

The price hike will affect all Virgin Mobile customers. But it is only added to airtime plans, the money paid for minutes, texts and data, and if you have a separate loan for a handset this won’t change. It also won’t affect calls, texts or data used outside a monthly allowance.

The provider said as the price hike only applies to the airtime part of a contract, average price rises for customers are 10%, slightly below the current rate of inflation.

O2 Mobile price hike

O2 customers with a contract that began before 25 March 2021 will have January’s RPI figure (13.4%) applied to the airtime portion of their bill.

Those with contracts that started on or after this date, will have the same rise as all Virgin Mobile customers of the January RPI rate plus 3.9% applied to the airtime portion of their bill.

The amount customers will pay from 1 April will depend on the contract they have. Both providers are contacting customers to tell them exactly how much their bills will change by.

‘Price increases are never welcome’

A Virgin Media O2 spokesperson said: “We know that price increases are never welcome but, unlike other providers, we freeze the cost of device repayments and are only changing our airtime prices, meaning average bills will go up by an effective 10.0% or less than 10 pence per day.

“This is below inflation and reflects the fantastic value we provide for connectivity that is used almost constantly.

“These changes occur as our own business costs rise and we invest heavily in our mobile network to keep pace with ever increasing usage, rollout new technologies like 5G and deliver valuable services that matter to our customers – whether that’s flexible plans, inclusive EU roaming or access to exclusive events and savings through Priority.”

Related: How millions can avoid the 17% April broadband price hikes

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