O2 Put Up Mobile Charges By 25% In Move Affecting 8.7Million Customers

[interestrateripoff]

http://www.mirror.co.uk/money/personal-finance/o2-put-up-mobile-charges-3058791

Mobile phone giant 02 is whacking up its charges by as much as 25%.

Around 8.7million contract customers will be hit by the hikes from this March.

Among the increases is a 2.7% rise in 02’s monthly subscription.

The charge currently ranges from £8 to £63 a month, with the average rising from £37 to £38 a month.

..

Call charges to phone numbers starting 01/02/03 and 07 will jump from 35p to 40p a minute.

Sending a text message beyond the bundle cap will leap from 12p to 15p each.

And sending a picture message will go from 35p to 40p.

The announcement made today came 24 hours after new guidance from regulator Ofcom on mid-contract prices kicked in.

..

O2 said: “Price increases are never welcome but inflation has an impact on our costs.

“We continue to invest in our network and the services that matter to our customers while still offering great value for money.”

And yet inflation is running at 2%....

[South Lorne]

http://www.mirror.co.uk/money/personal-finance/o2-put-up-mobile-charges-3058791

And yet inflation is running at 2%....

..thought there was new regulation allowing customer to move if they do not agree with change ...or has it still to be implemented ...and is this a 'jump the gun' situation...?...

Edited January 26, 2014 by South Lorne

[TheCountOfNowhere]

O-no

[little fish]

..thought there was new regulation allowing customer to move if they do not agree with change ...or has it still to be implemented ...and is this a 'jump the gun' situation...?...

o2 seem to have found a way around the new regs

"Ofcom's new rules now mean you can leave your phone or broadband provider penalty-free if it unexpectedly hikes prices mid-contract.

O2 announces a price rise

However, O2 announced a mid-contract price hike of 2.7% for its eight million pay-monthly customers, due to come into effect in March 2014. Unfortunately, the new rules permit price rises for existing customers and new customers as long as they're told about this at the point of sale. Now O2′s using this loophole to hike prices for new customers who signed after 23 January 2014, as O2 says it will warn them that inflation-matching price rises will hit them on a yearly basis.

Plus, since these hikes will be measured by the rate of RPI (retail prices index) you won't even know how much you'll end up paying. And those who join O2 after Ofcom's rules take effect still won't be able to leave their contracts without penalty."

http://conversation....ns-fixed-rules/

[The Knimbies who say No]

o2 seem to have found a way around the new regs

"Ofcom's new rules now mean you can leave your phone or broadband provider penalty-free if it unexpectedly hikes prices mid-contract.

O2 announces a price rise

However, O2 announced a mid-contract price hike of 2.7% for its eight million pay-monthly customers, due to come into effect in March 2014. Unfortunately, the new rules permit price rises for existing customers and new customers as long as they're told about this at the point of sale. Now O2′s using this loophole to hike prices for new customers who signed after 23 January 2014, as O2 says it will warn them that inflation-matching price rises will hit them on a yearly basis.

Plus, since these hikes will be measured by the rate of RPI (retail prices index) you won't even know how much you'll end up paying. And those who join O2 after Ofcom's rules take effect still won't be able to leave their contracts without penalty."

http://conversation....ns-fixed-rules/

Seems like a good way to decimate new contract sales. Smug reliance on small print doesn't usually make for a happy customer.

[John51]

I'm a giffgaff customer and haven't been told of any price increases so assume that there aren't any. Giffgaff is 100% owned by O2 but is a lot cheaper. No call centre, any queries are handled by other customers on the forum. There is a reward system for those that help. Ask a question and get replies in less time than most call centres take to answer the phone.

[19 year mortgage 8itch]

I'm a giffgaff customer and haven't been told of any price increases so assume that there aren't any. Giffgaff is 100% owned by O2 but is a lot cheaper. No call centre, any queries are handled by other customers on the forum. There is a reward system for those that help. Ask a question and get replies in less time than most call centres take to answer the phone.

Giffgaff put their price up 20% last year

[R K]

with the average rising from £37 to £38 a month.

Nearly £20,000 over a working lifetime.

Astonishing.

[durhamborn]

You can leave these contracts anytime.You simply dont pay them.Cancel direct debits and tell them they arent getting their money.

Iv done it several times with different companies whenever they have tried to rip me off.Nothing they can do about it apart from your credit report,but as iv never had credit in my life,nor will ever have or need it who cares.

[Errol]

Nearly £20,000 over a working lifetime.

Astonishing.

Yep, and for something that 15 years ago almost nobody even owned. There is simply no real need for most people to carry a mobile at all. And at £35+ a month it's a massive cost when you put it in perspective (as you did).

[Sour Mash]

You can leave these contracts anytime.You simply dont pay them.Cancel direct debits and tell them they arent getting their money.

Iv done it several times with different companies whenever they have tried to rip me off.Nothing they can do about it apart from your credit report,but as iv never had credit in my life,nor will ever have or need it who cares.

Most people however, will use credit at some point so trashing your credit record over a mobile phone contract isn't very good advice.

Just use Pay As You Go or a rolling one-month SIM-only contract to avoid long-term contract hassles. The deals are pretty good especially for low volume users. I'm paying seven-pounds-something a month and that more than covers phone, texts and data, plus I can cancel at one month's notice.

I really don't see why so many people are willing to lock themselves into uncompetitive 24-month contracts just to get some flashy smartphone for 'free', it makes no financial sense whatsoever. You can pick up SIM-free models quite cheaply if you can live with the shame of having last year's top model instead of the new one with an incrementally higher number after it, then just add the PAYG/rolling SIM-free contract and you are set for very little cash over a comparable period. I guess it's the need to spend money up-front instead of getting something on credit for no money in advance that puts the average pleb off.

[Monkey]

How would this affect people who upgraded? I assume with the upgrade would be a letter explaining this

[honkydonkey]

Use http://www.ovivomobile.com/, I pay absolutely nothing every month and just have to put up with an advert screen when I browse which takes 2 seconds to get past.

[Ash4781]

I wonder if this is tied up with rising smart phone market penetration with data usage voice over ip. Just look at Blackberry demise. Text usage is in decline and even cheaper packages have high text message allowances. Seem also to get alot more minutes for your money.

How much debt do they (O2) have?

Edit: happy to be corrected re move to data

Edited January 27, 2014 by Ash4781

[The Ayatollah Buggeri]

I really don't see why so many people are willing to lock themselves into uncompetitive 24-month contracts just to get some flashy smartphone for 'free', it makes no financial sense whatsoever. You can pick up SIM-free models quite cheaply if you can live with the shame of having last year's top model instead of the new one with an incrementally higher number after it, then just add the PAYG/rolling SIM-free contract and you are set for very little cash over a comparable period.

Interestingly, I've discovered that in the US, almost all line-only contracts (i.e. ones with which you use your own phone, which they do not supply) also have a 24-month lockin. The few that don't, plus the very few PAYG arrangements that exist, are so grossly expensive (a flat rate of $3 per day, charged when you make your first call, text or data transfer activity, is typical), than unless you only make or receive 1-2 calls or texts a month, they are as expensive as a contract. The average phone/data deal works out at between a grand and $1.5k a year here. You could probably take 25-40% off your annual bill by buying an older phone outright and using it on a line-only contract, but no more than that.

At the moment I've got an older Blackberry on PAYG, but the lack of email (no phone company here provides Blackberry email on PAYG) is now affecting my work to the point at which I'm soon going to have to bite the bullet and get a smartphone. When I first read this story, my reaction was that the phone companies will be pricing themselves out of customers, and will soon be reminded that having a mobile phone is a luxury, not a necessity. But as someone who is now self-employed and on the road a lot, I'm finding that this isn't the case. I presume that these companies have done their market research, know this and anticpate being able to make big price hikes stick, with customers cutting back on other discretionary spending elsewhere.

Edited January 27, 2014 by The Ayatollah Buggeri

[John51]

Giffgaff put their price up 20% last year

I didn't notice. I'm on their £5 a month Hokey Kokey package, 60 minutes plus a minute for every minute of calls I receive. I usually finish the month with between 70 and 100 minutes.

[19 year mortgage 8itch]

I didn't notice. I'm on their £5 a month Hokey Kokey package, 60 minutes plus a minute for every minute of calls I receive. I usually finish the month with between 70 and 100 minutes.

I said at the time (on here) that it was the first inflation I'd seen in mobile telephony in over 10 years. Until then, everytime I had change, I had been able to get more (mins/txts/data) for less.

UK providers would love to move to the US model that AB described, I'd heard it was bad. 2 yr contracts are bad enough. No thanks.

http://community.giffgaff.com/t5/Help-Support/Is-The-Giff-Gaff-Goodybag-Price-Increase-Fair/td-p/6230996

[pig]

Interestingly, I've discovered that in the US, almost all line-only contracts (i.e. ones with which you use your own phone, which they do not supply) also have a 24-month lockin. The few that don't, plus the very few PAYG arrangements that exist, are so grossly expensive (a flat rate of $3 per day, charged when you make your first call, text or data transfer activity, is typical), than unless you only make or receive 1-2 calls or texts a month, they are as expensive as a contract. The average phone/data deal works out at between a grand and $1.5k a year here. You could probably take 25-40% off your annual bill by buying an older phone outright and using it on a line-only contract, but no more than that.

At the moment I've got an older Blackberry on PAYG, but the lack of email (no phone company here provides Blackberry email on PAYG) is now affecting my work to the point at which I'm soon going to have to bite the bullet and get a smartphone. When I first read this story, my reaction was that the phone companies will be pricing themselves out of customers, and will soon be reminded that having a mobile phone is a luxury, not a necessity. But as someone who is now self-employed and on the road a lot, I'm finding that this isn't the case. I presume that these companies have done their market research, know this and anticpate being able to make big price hikes stick, with customers cutting back on other discretionary spending elsewhere.

And that pretty much sums up the mess we are in. The rate of inflation hardly seem so matter any more - its more the question of how big a proportion of wages can X reasonably acquire ? Where X = cable tv /transport/energy/houses/ and so on... I can see Mr Private Healthcare sitting at home watching Premiership footy thinking, well this is a no brainer, if people can be arm-twisted into paying an extra £50 a month to follow their favourite footy team then how lucrative is this going to be if we start dismantling the nhs ?

Edited January 28, 2014 by pig

[winkie]

I have noticed that firms are trying to generally put up prices as much as they think they can get away with, in many cases over and above the rate of inflation....knowing they will lose some custom.... first for those who can be bothered, they will move if they can move, or cut right back or cancel/stop using the product/service altogether if they can do that ie like tv subscription that is not a necessity of life .....due to money printing money has been working its way back into the system and there is a great pressure building up to increase prices, consumption and in some cases wages....that is what they are hoping, but they have to have enough people who are willing with the ability and means to pay the increases.....there is still a lot of surplus that can be cut back on if need be.

Noticed BT have now started to charge for 1571 and caller display that always used to be free, on top of land rental charges increasing.....grabbing money on the edges.....every little helps them........but will this be noticed? will customers leave out of principle? will people cancel the services? will people start shopping elsewhere to find better deals?......will this be a good or bad move overall.

This continuing of price rises (and shrinking or diluting of products) of everything and anything they can is rampant at the moment......interesting to see how this will all play out in the coming months.

[Sour Mash]

I have noticed that firms are trying to generally put up prices as much as they think they can get away with, in many cases over and above the rate of inflation....knowing they will lose some custom.... first for those who can be bothered, they will move if they can move, or cut right back or cancel/stop using the product/service altogether if they can do that ie like tv subscription that is not a necessity of life .....due to money printing money has been working its way back into the system and there is a great pressure building up to increase prices, consumption and in some cases wages....that is what they are hoping, but they have to have enough people who are willing with the ability and means to pay the increases.....there is still a lot of surplus that can be cut back on if need be.

Noticed BT have now started to charge for 1571 and caller display that always used to be free, on top of land rental charges increasing.....grabbing money on the edges.....every little helps them........but will this be noticed? will customers leave out of principle? will people cancel the services? will people start shopping elsewhere to find better deals?......will this be a good or bad move overall.

This continuing of price rises (and shrinking or diluting of products) of everything and anything they can is rampant at the moment......interesting to see how this will all play out in the coming months.

It makes a mockery of the party line of low inflation. Prices of almost everything are considerably higher (or quality/quantity for the price, lower) than in 2008 when pretty much the biggest credit bubble ever, burst - which should have resulted in massive deflation.

And now, with 'recovery' threatening, there is growing upward price pressure. This should indeed be interesting ... I can't see them putting up interest rates to any sort of sensible level with so many powerful vested interests who want to see them kept low, and of course the fact that raising rates by anything other than a token amount would absolutely trash the supposed recovery.

[winkie]

It makes a mockery of the party line of low inflation. Prices of almost everything are considerably higher (or quality/quantity for the price, lower) than in 2008 when pretty much the biggest credit bubble ever, burst - which should have resulted in massive deflation.

And now, with 'recovery' threatening, there is growing upward price pressure. This should indeed be interesting ... I can't see them putting up interest rates to any sort of sensible level with so many powerful vested interests who want to see them kept low, and of course the fact that raising rates by anything other than a token amount would absolutely trash the supposed recovery.

Deflation can't be tolerated.....2% inflation with +3% growth/wage increases all fine and dandy......only then can interest rates be wilfully increased.....but outside influence can force the hand that feeds, growth or no growth.

[19 year mortgage 8itch]

with the average rising from £37 to £38 a month.

Nearly £20,000 over a working lifetime.

Astonishing.

Rent, an average of £700 a month.

Nearly £380,000 over a working lifetime.

Astonishing.

Council Tax, an average of £120 a month.

Nearly £65,000 over a working lifetime.

Astonishing.

Household Energy, an average of £100 a month.

Nearly £55,000 over a working lifetime.

Astonishing.

Water, an average of £30 a month.

Nearly £16,000 over a working lifetime.

Astonishing.

[mrtickle]

It is an anathema to me to pay so much for a mobile phone. For the last decade I was on Orange's "match virgin" tariff which was £0 line rental every month and as I hardly ever make calls or send text it suited me great. All the contracts are so skewed towards massive monthly charges which have steadily risen over the last decades to shocking levels (boiling frog syndrome again) it's ridiculous.

I now have my first smartphone which I bought outright subsidised by Google (Nexus 4 - thanks) which I use primarily as a PDA really; again hardly any calls or texts, or indeed data because I'm normally somewhere with wi-fi. I was pleased to find that Co-Op offered a flat rate of £5/month which obviously is a huge leap from £0 - but £38?! That's on a different planet.

Edited January 28, 2014 by mrtickle

[MrPin]

I can see a lot of people giving up on this mobile comms nonsesnse, as they have on television! It's bad value when I can get all the bandwidth I can eat for a flat fee on cable, or at work. Why pay another expensive fee to watch cat videos on a 2 inch screen?

[bomberbrown]

This was just the impetus I needed to switch mobile providers from my uncompetitive O2 monthly contract. Fvck 'em!