Three UK Adopts Huge Inflation Linked Mobile Price Hikes Policy UPDATE

Three UK appears to have shunned Ofcom’s recent pleas for broadband ISPs and mobile operators to consider whether “large price rises can be justified at time of exceptional financial hardship” (here). Instead, the operator has adopted the same CPI (inflation) linked policy of huge hikes on their Pay Monthly plans as other operators.

First, a bit of history. Back in early 2020 Three UK would typically increase their monthly prices each May by an amount up to the January Retail Price Index (RPI), which at the time was set at just 2.7% (remember when people complained about even that?). But this changed on 29th October 2020, when the operator adopted a flat annual increase of 4.5%, which was to be applied each April (here).

However, customers of the operator have noted that they updated their T&C’s for Pay Monthly plans again on 1st November 2022, which now makes reference to a different policy for new and upgrading customers: “Each April, your Monthly Charge will increase by an amount up to the December CPI Rate, published in January of that year, plus 3.9%.” We don’t yet know what the CPI rate will be in January, but at present it’s 10.1%!

The move brings Three UK into line with various other operators, such as BT, Vodafone, EE, Shell Energy and more. But it also marks quite a significant shift for Three UK and comes, as Ofcom says, at a time of exceptional financial hardship when the regulator is pressuring operators to take a different approach.

At present, Three UK’s change doesn’t impact existing customers, but there will come a time when they too may need to upgrade. At the same time, we note that some of Three’s main product pages still make reference to the old 4.5% increase, which shows that they haven’t yet managed to align all of their messaging for new customers. We’ve asked the operator to comment on this change.

UPDATE 8th Nov 2022

We’ve had a statement from Three.

A Spokesperson for Three UK said:

“We understand that the cost-of-living crisis is having an impact on our customers at present. However, with energy and supplier prices increasing substantially and network roll out costs rising significantly across the board we have taken the difficult decision to pass some of this increase onto our customer’s bills.

Like other mobile providers, our pay monthly plans are subject to an annual price change. We will apply an annual increase of December’s CPI rate +3.9% for all new and upgrading customers who take out a contract with us from 1 November 2022. The change will be applied in their April 2023 bill.

Our prices remain some of the most competitive in the market and this increase will allow us to continue to invest to ensure we have a strong network, capable of delivering better connectivity, every day, for every customer.”

The operator does make some valid points above, since we note that supplier contracts often have inflation-linked rises baked into them and their energy costs (e.g. at mast sites, data centres, retail stores etc.) have also risen significantly above inflation. On top of that, Ofcom’s annual licence fees for the spectrum they use increase by inflation each year. Such rises can only be absorbed for so long.