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Broadband, TV and Mobile Price Hikes Set for Virgin Media O2 UK UPDATE

Wednesday, Feb 14th, 2024 (7:28 am) - Score 8,520
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The release of the latest monthly UK inflation figures, which saw the Retail Price Index (RPI) fall to 4.9% (down from 13.4% at this time last year), means that UK customers of Virgin Media and O2 can now confirm how much they’re going to be impacted by the operator’s next round of annual price hikes.

In case anybody has forgotten, since last year VMO2 has based their annual price hikes off the RPI (not the lower CPI figure, like most providers use) rate as published in February each year plus another 3.9% on top, which is typically then applied to customer bills from April. Put another way, existing customers can expect their monthly payments to increase by a total of 8.8% this year (this works out at an average of £4.16 per month for VMO2).

NOTE: Last month saw most of the largest broadband and phone providers confirm annual hikes of between 7-7.9% (here).

However, it’s worth pointing out that this only applies to service rentals (broadband and mobile), which means that O2’s device plans (e.g. the Smartphone in a mobile bundle) won’t be impacted. Furthermore, O2 customers whose plans started before 25th March 2021 will receive a price increase of RPI alone. In addition, the operator protects vulnerable customers from these hikes, which means that users on Virgin Media’s “Essential Broadband” social tariffs and “Talk Protected” landline customers are not impacted.

The good news is that Ofcom recently moved to ban mid-contract hikes that are linked to either inflation or percentage-based price rises (here). But the regulator’s change won’t arrive in time to impact this year’s hikes – the changes are expected to be introduced from late 2024.

Ofcom will instead require providers to tell customers precisely what any such hikes will be when they sign up (“in pounds and pence“), which rules out changes linked to unknown future inflation values or percentages. In theory, this should help to make future pricing clearer, although prices – at least among the biggest providers – will still rise (it won’t stop mid-contract hikes completely).

The biggest providers often say they need to raise prices because they’re frequently adding all sorts of new services (e.g. FTTP), have to introduce new rules and regulations (e.g. automatic compensation, protection for vulnerable customers, social tariffs etc.), developing new systems, facing higher charges from suppliers (e.g. energy) and consumers are also gobbling significantly more data every year. But the latter must also be weighed against any fall in the cost of data capacity elsewhere vs any increase in broadband speed or usage from new products etc.

A VMO2 spokesperson said:

“2023 was a record year for traffic on our networks as customers used our mobile and broadband services more than ever. We are investing heavily to ensure we continue to provide the fast and reliable connectivity our customers rely on, and the amount we receive from price increases is greatly outweighed by the £5m we invest every single day to upgrade our networks and services to give customers a better overall experience.

It’s clear that we continue to offer excellent value, with customers paying less and receiving more. Recent independent analysis found that the cost of telecoms services has fallen by a fifth since 2017, while at the same time speeds and usage have increased significantly.

We will be writing to all impacted customers directly to explain when, why and how any price changes may come into effect.”

Alternative Strategies

The best way to save money is to vote with your feet and switch ISP (where viable alternatives exist and the terms of your plan allow). But those who are happy with the service they receive, or who perhaps have no other viable options, may prefer to try haggling for a lower price when the latest hike hits (Retentions – Tips for Cutting Your Broadband Bill), although your mileage may vary – big ISPs are more responsive to this.

Alternatively, there are a lot of smaller ISPs out there that only very rarely increase their prices, if at all, and quite a few of those have kept their prices frozen. In particular, if you’ve recently been covered by a new alternative full fibre (FTTP) network, then the aggressive market competition that exists often ensures that their prices stay low to help drive adoption.

We should add that those who are on state benefits (Universal Credit etc.) may have the additional option of taking a cheaper Social Tariff, which is another way to cut your costs – see our article on this: A Quick Guide to UK Social Tariffs – Getting Broadband for £15. But you won’t always be able to access the fastest speeds or most advanced routers / features with such a tariff.

UPDATE 8:18am

We’ve added an official comment from VMO2 above. The operator informed us that they also invest more than £5m every single day to improve their networks and services – a figure far greater than the increases customers will see on their bills.

O2 added that last year was the biggest ever for data use on their network, with mobile data traffic up by 26% compared with 2022, while data use on Virgin Media’s fixed network increased by 13%. The operator added that high inflation has also pushed up their costs “significantly over the past year, with our energy bills more than doubling over the last two years.”

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Mark-Jackson
By Mark Jackson
Mark is a professional technology writer, IT consultant and computer engineer from Dorset (England), he also founded ISPreview in 1999 and enjoys analysing the latest telecoms and broadband developments. Find me on X (Twitter), Mastodon, Facebook and .
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Comments
27 Responses
  1. Avatar photo Andrew G says:

    Likely to be much more than 8.8% increase for most of VM’s customers. The company calculate the increase on the undiscounted tariff, and because most VM customers are on packages that are heavily discounted by as much as 50%, they’ll be hit by much higher price rises. If they’ve got a 50% discount, then the effective price rise will be double the quoted 8.8%. The only customers who avoid this will be those who have cannily agreed a “fixed price” contract, as opposed to “fixed discount”, and even they probably need to have made sure they have rigorously collected and preserved any relevant documentation or call recordings.

    But as long as customers tolerate being treated like mugs, this will continue.

    And the Ofcom changes won’t make any difference – the company simply need to build in whatever increase they like in terms of £ at the start of the contract without defining it as a % linked to inflation. If the contract says “every April your price will increase by £10 a month” then that’s a done deal – no right to exit or renegotiate.

    What a miserable failure as a regulator Ofcom are. But looking at the failures of water regulation and energy regulation, they appear to be par for the course.

    1. Avatar photo Andrew G says:

      Question for Mark: Did you choose the article image of the Virgin Media strapline “Super-charging the UK” with a sense of irony? I hope so.

    2. Avatar photo RightSaidFred says:

      This sounds exactly like how my Vodafone FTTP contract reads; apply price rise to package price, then take away a fixed discount.

    3. Avatar photo anonymous says:

      The image should be amended to “Overcharging the UK”….

    4. Avatar photo GreenLantern22 says:

      Andrew G this is incorrect. While initially VM did attempt to do what you describe (and might have done it to many customers) they had to back track pretty quickly. On my last renewal with VM (8-Feb-2024) the contract clearly specified that the RPI + 3.9% rise will be calculated on the monthly amount you pay so the increase will be 8.8% as Mark pointed out. Furthermore it will also be added to the undiscounted amount but customers will not pay that amount unless they let their contract run out continue the service without any discounts. For the record my undiscounted VM monthly amount is 262% (yes more than 2.6x!) of what I actually pay which is insane. So it’s a nice time bomb I need to keep a close eye or I could be seriously ripped off!!!

    5. Avatar photo anonymous says:

      Yeah, they changed it for this year.
      https://www.virginmedia.com/help/prices

      Last time, the increase was based on FULL non discounted package price. They’ve made some tweaks for this year. Andrew G was basing on last time (who would have thought VM change to the lower increase by honouring discounts as the base price when they’ve never done before?)

    6. Avatar photo Buggerlugz says:

      So they’re actually hiding the amount that they’re actually wanting customers to pay too. So not just underhanded corporate greed, but sneaky underhanded corporate greed. Not to mention they never print the CPI figure, only mention the lower one, so it don’t look as bad. The reality is as a customer you’re gonna get shafted regardless.

  2. Avatar photo Random says:

    I do wish this wasn’t kept on being presented as a ban on mid contract price rises, which by your own admission it is most certainly not, please stop. They can simply price say a there will be £4 increase during the contract. They will probably price it high to safeguard for their income. Anything short of a total ban on mid contract price increases is just another of many Ofcom failures.

    1. Avatar photo Iain says:

      Yeah, it’s disappointing, and Ofcom have years too long to get here.

      Nonetheless, it’s an improvement. Consumer contract law says it’s unfair for traders to omit material information. The price is material, or where this cannot reasonably be calculated in advance, the method of calculating the price.

      This means they’re going to have to tell you what it costs next April, because they can certainly add £6 on to £33. So they’ll have to say £39 from April.

      Of course, Ofcom and the Advertising Standards Authority are weak, so it’ll take another year or two to get there. But as always, the law is clear. In the meantime (not to excuse bad regulators!) but consumers can enforce fairness with the Ombudsman or small claims court.

    2. Avatar photo NE555 says:

      Once the price increases are fixed, the next step would be to give the total cost over the entire contract period, and/or the average cost per month over the contract period. That would be a much clearer way to compare deals from one ISP to another.

      “Broadband only £25 per month! Rises to £35 per month in April 2024 and £40 per month in April 2025. £30 setup fee.

      Total payable £900 over 24 months. Average cost £37.50 per month.

      After end of contract you will pay £45 per month which may be increased every April”

    3. Avatar photo Iain says:

      Precisely, NE555. *If* ISPs are going to be rubbish by having mid contract price rises, that’s literally the only fair and transparent way of doing it. Anything short is misleading (which is why they love it).

    4. Avatar photo ADSL56k says:

      Totally agree with NE555’s comment.

      I think this would bring a logic to pricing and contracts that the consumer seems to be missing with convoluted small prints and sales tactics.

      Also, if I sign up to a contract I’d expect it to stay the same for the full duration. If this goes up, then I should be informed and allowed to leave unpenalized.

      Some great comments and discussions on this post!

  3. Avatar photo carlconradw says:

    I have just switched to Lebara which uses the Vodafone network and has 30 day rolling contracts and, more importantly, rules out price rises for 12 months. My saving from O2 is £2.50 a month on a Sim only contract. Not huge but I felt I needed to make.a st ad. Plus Vodafone offers me a better signal where I live.

    1. Avatar photo Ben says:

      It’s a 30 day rolling contract — they can increase the price by giving 30 days notice.

  4. Avatar photo john says:

    These price increases need to be regulated in areas where there is no full fibre/cable competition.Who cares if they are investing £5m per day – they are doing that to generate a return in the long term – the money should come from shareholders not trapped customers.

    1. Avatar photo Buggerlugz says:

      Absolutely agree with that suggestion.

  5. Avatar photo DD says:

    Why do they want to continue paying for the Virgin brand name post merger? That might save them a few million!

    1. Avatar photo Just a name says:

      Tied into a very long contract.

  6. Avatar photo anonymous says:

    That will be around £7 extra per month on Broadband Only package for me. The out of contract price goes to £73 they say + price increase. Ridiculous. FTTC cabinet full for ages as BT cant get their act together and their roll out of FTTP not began here till later this year. 4G speeds all over subscribed giving max of 8mbps.

  7. Avatar photo Mr Alan Cooper says:

    All their competitors need to invest too but the smaller ones do not impose this daylight robbery. In my area we now have full fibre suppliers so I’ve moved, much better internet, no in contract increases. I hope that many people do this as the opportunities arise. The established customer prices are ridiculous, at the end of contract you can argue this down but they apply it as a discount so for example if you have a full price of £100 but pay £50 they apply the increase to the £100!! So this year would be hit by £8.80 increase. £108.80 less £50 discount. In most contracts you will get this at least twice and they no longer allow you to leave without penalty if you don’t agree…..

  8. Avatar photo Iain says:

    If you signed up before they introduced “RPI plus” mid contract rises, then they will have told you months ago that they changed the contract to allow for “RPI plus” mid contract price rises.

    But nothing in the contract you originally signed allowed them to change the contract you signed. Even if you had, them changing the contract unilaterally is unfair. Complain, and escalate to the Ombudsman.

    1. Avatar photo anonymous says:

      Your trapped if there is no alternative.

      4G=over subscribed and often cant resolve a web page
      FTTC= cabinet full for months
      FTTP = BT coming later this year, but not done, and Netomnia were useless here as complete patchwork

    2. Avatar photo Iain says:

      Being trapped sucks.

    3. Avatar photo Bob says:

      If it is a new or renewed contract they can change it. You do not have to accept it though you can go elsewhere

    4. Avatar photo anonymous says:

      Enlighten me Bob.

      Your trapped if there is no alternative.

      4G=over subscribed and often cant resolve a web page
      FTTC= cabinet full for months
      FTTP = BT coming later this year, but not done, and Netomnia were useless here as complete patchwork
      SAT = no interest, latency, weather etc.

  9. Avatar photo Buggerlugz says:

    OFCOM needs to be all over this practice and it needs to be made illegal. what customer honestly believes its perfectly acceptable for any company to just increase their prices by up to 15% annually? nobody. When you have no choice in the matter its nothing more than extortion (and yet another example of corporate greed).

    1. Avatar photo M says:

      Remember the d ays any price rise would allow you a get out of clause, wonder what branch of govenment removed this.

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