Virgin Mobile and O2 UK Customers to See HUGE Price Hikes UPDATE

Customers of both O2 and Virgin Mobile (Virgin Media) today found out what sort of price hikes they can expect this year after the latest Retail Price Index (RPI) rate of inflation was published, which hit 7.8%. The operators then add another 3.9% on top, which means customers can expect their bills to rise by a staggering 11.7%.

The change, which will be reflected on bills produced in April 2022 onwards, shouldn’t come as too much of a surprise because we already warned about it (here and here). We should point out that this does not impact Virgin Media’s fixed broadband service, which uses a different approach and doesn’t link price rises to inflation (they’ve already released their price increases for 2022).

By comparison, both O2 and Virgin Media will increase mobile plans by the Retail Price Index (RPI) rate of inflation announced in February plus 3.9%. But if RPI is ever negative, they’ll only apply the 3.9%. “You’ll see this increase on your April 2022 bill onwards,” said the operators. But expected or not, this is still one of the single biggest telecoms price increases seen so far.

In fairness, it’s worth remembering that some of the same cost of living increases hitting consumers today are also impacting businesses, including mobile operators and broadband ISPs, which will often end up being passed on to all of us. At the same time, operators are also adding all sorts of new services (e.g. 5G), developing new systems, facing higher charges from suppliers, implementing costly new Ofcom rules and consumers are gobbling significantly more data every year.

Customers of both operators, once formally notified of the increase by their provider, could try haggling for a lower price when the hike hits (Retentions – Tips for Cutting Your Broadband Bill), although your mileage may vary. Likewise, there are still some operators around, often smaller MVNO players, that don’t play the same game as the big boys and may be a better bet.

Interestingly, Virgin Mobile’s RPI price rise notification page (here) also states that those unhappy with this change “can choose to end your airtime contract(s) without any early cancellation fees by heading here or calling us on 789 from your Virgin Mobile phone by 28th February 2022.” Worth considering, as not every operator is being that flexible (this may only apply to the 2022 increase, as the addition of 3.9% was a change to their previous RPI only policy).

As for O2, most customers will receive a straight RPI price increase only. This is what is outlined in their T&Cs for those who joined or upgraded prior to 25th March 2021, while the rate of RPI + 3.9% will only be applied to monthly bills for customers who joined or upgraded after 25th March. We should add that they only apply a price increase to the airtime charges for customers on O2 Refresh (not the handset side).

UPDATE 17th Feb 2022 – 6am

Added a bit of extra detail above about O2’s increase and a comment below.

An O2 spokesperson said:

“We recognise price changes are never welcome, and always balance keeping our prices competitive with the need to continue investing in the services that our customers use and love. For most customers the price increase only applies to the airtime part of their bill and with our most popular tariffs costing from as little as 33p per day for superfast data with unlimited minutes and texts, our customers receive incredible value as well as extra perks such as Priority.”