MSE News: EE and O2 mobile customers to be hit with 1.1% price rise

Former_MSE_Paloma

EE and O2 mobile phone customers face price hikes of 1.1% from March/April and you may not be able to leave penalty-free ...

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EE and O2 mobile customers to be hit with 1.1% price rise




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20aday

Given it's written into their contracts since OFCOM's intervention last year it's not a surprise but at a time when we're being led to believe prices and inflation are falling it would've been nice to see them leave people's current tariffs as they were.

Granted 1.1% isn't a lot compared to last year's RPI amendment effective March 2014 but it's still 1.1% the consumer has to find per month until this time next year.

DUTR

20aday wrote: »

Given it's written into their contracts since OFCOM's intervention last year it's not a surprise but at a time when we're being led to believe prices and inflation are falling it would've been nice to see them leave people's current tariffs as they were.

Granted 1.1% isn't a lot compared to last year's RPI amendment effective March 2014 but it's still 1.1% the consumer has to find per month until this time next year.

It's based on the RPI rate on a certain date, as you say it's written into the contracts (as it always was) so hopefully we won't have a painfully long whining thread like we did last year.

minislim

good job i ditched O2 two years ago! went with 3 on payg and never looked back!

now im quids in and free from any price hikes at all.

20aday

DUTR wrote: »

It's based on the RPI rate on a certain date, as you say it's written into the contracts (as it always was) so hopefully we won't have a painfully long whining thread like we did last year.

I believe it's the preceding February?

molerat

EE adds that all customers have now been alerted about the price rise via text message or email and the changes will also be displayed when customers sign in to their accounts online.

As an Orange SIM only customer I have not and it does not !

gwapenut

I don't really understand the legality of this.

"The provider last announced price hikes in April 2014 (see the EE mobile customers face 2.7% price rise in May MSE News story)"

So they increased prices in May, and now are applying a whole 12 months' worth of RPI for another increase 10 months later in March.

RPI increases are only fair if you use the same month year-on-year. You can't pick and choose which months suits you. And you certainly can't cram 12 months of inflation into a 10 month period.

Caddyman

minislim wrote: »

good job i ditched O2 two years ago! went with 3 on payg and never looked back!

now im quids in and free from any price hikes at all.

I'm with you on this one. Swapped to 3 payg about 4 months ago from o2 and really pleased with their service, especially the price of calls!

VT82

I fail to see what RPI has got to do with their prices. Increases in the cost of mobile phone bills should be CONTRIBUTING to the calculation of the index, NOT BEING BASED UPON IT. Circular reference much?

They should be basing increases on their own rising costs, and should not be able to change them during a contract. They're big enough and clever enough to hedge their costs in advance if they really believe there is inflation risk. But no, they are purely doing this as a money-making exercise.

And there is certainly absolutely no reason why they should be able to increase costs based on some mythical RPI number that really has zero relevance to do with anything.

gwapenut

@VT82
Agreed. A prime example if when VAT went up a few years ago. This resulted in an increase in RPI.

What did TMobile do? First, they applied the extra VAT rate to the bills (they had to). This resulted in an increase for consumers.

They then went on to apply the RPI increase to the bills. Because RPI already included an element of VAT, they effectively factored in VAT more than once. This bore no relation to their own costs.

VAT increases are another good example of why you can't use RPI twice within one year, and why it should be the same month year after year - or indexed back over a non-12-month period to when the last increase was applied.

Why a good example? Say a tax was introduced that added 10% to all prices, everywhere. If there had been no natural increase in prices, then RPI would jump up by 10% in Jan versus prices 12 months ago. It would also show a 10% increase in Feb, Mar, ..., Dec, each versus 12 months ago when the tax was introduced. Not because the tax happened 12 times, but because 12 measurements of RPI are taken.

But if EE did the same there, making two increases 10 months apart, then they would be able to increase bills 10% for Jan, and a further 10% for Nov, which would in no way reflect the reality of how prices had risen.

That is why I believe it is fundamentally unlawful to apply two RPI increases for 12-month intervals less than 12 months apart. Even if the intervals are more tahn 12 months apart, the choice of months can be manipulated to give a higher increase than has actually happened.

Netwizard

This bit got me from o2:

UK voice calls: Will rise to 45p/minute from 1 April, up from 40p/minute.
International calls: Will rise to £1/minute to call Europe, USA, Alaska and Canada, up from 60p/minute and to call Eastern Europe and worldwide, it will also cost £1/minute, up from 80/minute.

45p a min to UK and £1 a min to Europe?! that's crazy pricing when you can call spain on giffgaff (o2) at 2p a min and 10p a min UK out of allowance!