Mobile Operator Three UK Adopts New Price Hikes Policy
Mobile network operator Three UK has today followed BT, EE, Plusnet, Vodafone and TalkTalk by introducing a new pricing policy that aligns with Ofcom’s new guidance banning inflation-linked annual telecoms price rises (i.e. annual price increases will in the future be outlined in “pounds and pence”).
Just to recap. The market regulator recently banned annual price rises that are based off confusing inflation (CPI/RPI) or percentage-based changes (here). For example, this means that Three UK will need to phase out their existing policy, which states: “Each April, your monthly charge will increase by the previous December’s Consumer Price Index (CPI) rate, plus 3.9%.”
However, Ofcom’s change was never designed to stop mid-contract hikes completely (it’s more about making future pricing clearer and simpler), but it does at least require providers to tell customers precisely what any future price increases would be when they sign-up (“in pounds and pence“). This rules out changes to core subscription prices that are linked to unknown future inflation values or percentages.
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Mobile operator Three UK intends to adopt this change for “new and upgrading customers” from September 2024 (existing customers will remain on the old policy until they upgrade or re-contract). In practical terms this means that annual prices (i.e. your core subscription price) will increase by between £1 and £1.50 a month each April, dependent on the data allowance of the contract.
This approach a bit fairer than the blanket one adopted by others. However, given the currently low rate of CPI (2%), the new approach may still hit some customers on cheaper plans with hefty above inflation hikes that go beyond that of the old model; there’s not much of a victory for consumers in this (e.g. somebody paying £7 per month for a 4GB plan today will be paying £8 after April next year, which is a 14.29% increase!).
Price Hikes by Data Allowance
➤ 4GB or less: £1 more a month➤ 5GB-99GB: £1.25 more a month
➤ 100GB or more: £1.50 more a month
In addition, Three’s 4G/5G based Home Broadband customers will also see annual rises capped at £2 a month per contract, which is below the £3 increases seen on some of the aforementioned fixed line broadband ISPs.
Elaine Carey, Chief Commercial Officer at Three UK, said:
“Like many mobile providers, we regularly review and revise our pricing to ensure that we remain competitive and reflect the cost pressures we face as a business. While we have always made sure annual price changes are clear and transparent to customers, we want to provide greater clarity going forward. Our unique tiered approach means any increase is fair, while ensuring our prices remain competitive.”
The fact that providers can now specify a specific rise ahead of time will of course do little to dampen calls for an outright ban on mid-contract hikes in favour of fixed term pricing, which is something we’d support. But it’s worth remembering that the new policy, which won’t be enforced by Ofcom until 17th January 2025, is only focused upon the core subscription price of a package (i.e. call charges and any paid add-ons may still adopt a different approach).
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At the same time we shouldn’t forget that not all providers adopt the same approach as the biggest players. Quite a few smaller providers, particularly newer alternative broadband networks (altnets) in the fixed line space, often promote packages with simple fixed price terms.
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, BlueSky, Threads.net and Linkedin.
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£1.50 more a MONTH!?
Surely in a year that will add up to alot more than the traditional CPI+3.4% YEARLY rise.
Ok I understand now so it means every year depending on data package they will just add £1-£1.50 extra a month on top of the base price, not add it 12 times a year
I have written to my MP and would urge others to do so. She has replied stating that she has written to the Minister of State for Data Protection and Telecoms, Sir Chris Bryant MP. The companies’ attitude is not acceptable. Despite falling inflation we are going to see prices rise faster than they would under the previous stance, for the majority of users. Consumers should have the ability in every case to cancel their contracts without penalty. I have recently changed to a mobile provider which offers no inflationary rises and sits on a “big 4” platform.
You have misunderstood, the price raise is only added once a year.
I’m not convinced that (further) government intervention is required. The problem with the CPI-based price increases was that customers didn’t understand them. With price increases spelled out in pounds and pence, customers are free to choose between deals with mid contract price increases and those without, and they can easily calculate the cost over the entire contract.
I’m with Scancom Business Contract which is 4.5% increase per year which is essentially 40 to 50 pence increase per year.
Sounds like this new pricing for consumers is a bit more expensive.
Also, I pay just £9, including 20% VAT, per month for unlimited data, calls, and texts with Three Business.
That’s why im sticking to Talkmobile they don’t do contract or rolling contract mid price hikes.
Dont understand Talkmobile is owned by Vodafone but Vodafone customers pay the in contract mid price hikes.
I guess Talkmobile is targeted mostly who are looking for a sim only.
I pay £9.95 for 120GB data and unlimited calls and text
I was a customer of Three for almost 15 years. Switching to a different mobile service provider was probably one of the best things I have ever done in a decade. Three are absolutely abysmal.
Doesn’t matter what 3 proposes.
Soon they will do as Vodafone tell them as they will be subsumed by Vodafone.
When you are on a contract there should be no price increases at all. You agree a contract for a fixed time (12/18/24 months), at a certain price, for a certain amount of calls,texts and data. Surely they’ve broke the agreed contract by increasing the price mid term. Imagine if we demanded a change to the contract in our favour…not a chance!
No, they’ve not broken the agreed contract, because the agreed contract stated that they would be increasing the price each April.
Shop around and take your money elsewhere, only a get a contract with a company offering No mid term increases.. I am on a monthly contract with Lebara (on Vodafone network) and free to leave if they decide to increase prices.
I have done the same with Broadband signed up for a 24 month contract with No increases.
While what you say is true, people should shop around, the point that they, these companies, shouldn’t be allowed to increase prices, at all, while you’re in contract, is overarching.
A lot of people, especially older, but even those younger, simply do not and/or have accepted that companies can do this.
However, if I lost my job and had to take a lower salary, or say inflation is 10% and my wage goes up by 2%, I’m not allowed to tell them I’m going to be reducing my monthly amount or even cancel the contract without a penalty.
It’s a very one sided operation and OFCOM are just useless.
There are plenty of virtual networks without annual increases although they tend to be for sim only (Smarty, GiffGaff etc.), so you might need to buy your phone separately.
See what honest mobile can do for you. They also give you a discount the longer you stay with them.
They just happen to be carbon negative too!
If you are a Three customer wait until you are out of contract and switch to Smarty. Same network, no contract and I haven’t had a price rise in the 3 years I have been using them. Simples.