In Contract Rises - An Observation

IamNotAllowedToUseMyName

Time for another poke at OFCOM.

Last year, the annual price increase was identified as a minor scandal and after some dragging of the feet, OFCOM was persuaded that the providers needed to be better at pointing out these rises, but they did nothing to restrict them.

Those allergic to numbers or with competency in accountancy should look away now

After a year at Vodafone, they just offered an upgrade. Original contract was a 2 year £46 with a £16 discount, 200M service, April price increase of 3.9% + CPI(4%). Also had a £3 together discount, so paying £29.37 in August.

New contract is 2 years at £35 with a £3 discount, fixed £3 increase in April, Together discount now £2 - so paying £30.

Checking for a non-customer, they are now offering 900M for £30 and 500M for £31! Baffling! If I try and upgrade my contract, they are (accidentally?) showing the 900M service for £32 as an existing user. The 150M service is £24.50, so substantially less than the 200M offer of a year ago.

So, this essential escalation has resulted in them selling me a 4.5 times faster service at a price about the same while a month later prices have reduced further! 

So OFCOM, if these price rises are essential, how come Vodafone are reducing their prices? 

born_again

Annual inflation price rises have nothing to do with your swap of services.
They are free to set prices as they wish at any point to keep/attract customers (business decision) Inflation is something they have no control over.

If they stop the inflation rises. Then all you will see is guesses at what it might be, so any contracts will factor this in. So in the end only one loser here & it is us the customer.

IamNotAllowedToUseMyName

You are missing the history. OFCOM wanted a higher level of rollout to achieve coverage targets. The providers came back and said "If you want rollout, then customers are going to have to fund this." OFCOM said fine, but we want to cap the increases, and I think ti was them who initially came up with the maximum of 3.9% onto of CPI. 

CPI then went mad and people started discovering they were getting hefty increases on what they believed were fixed price contracts, with the worst cases being increases days after signing up.

After a review, they introduced a new rule that these escalating contracts had to be set in stone at the point of sign-up, it was unreasonable to have a fixed price contract with an unknown increase.

However, the point of escalation was to fund the roll out. If they need the escalation or else they cannot afford the rollout, why have prices declined? It suggests either 1) they don't really need the escalation; or 2) they aren't funding the rollout.

Your point about inflation rises also misses the point of signing up to fixed price contracts, that they are the consumers' hedge against inflation. At the point they introduced this inflation rise, it was quite novel, hence the complaints, remembering that these were sold as fixed price and the escalation was hidden in small print, therefore fell foul of UK consumer legislation. Remember also that until last year, contracts allowed an exit at the point of price increase, whereas now, the agreement includes accepting a prince increase without the ability to exit.