Virgin Media O2 Adopt New UK Pricing Policy for Broadband, TV and Mobile UPDATE
Broadband and mobile operator Virgin Media and O2 (VMO2) have today become the latest ISP to adopt Ofcom’s new guidance on inflation-linked annual broadband price rises. In practice, this means that new and re-contracting (upgrading) customers will be hit by a flat price increase of up to £3.50 (monthly) each April.
The new policy reflects the regulator’s earlier move to BAN broadband ISPs and mobile operators from doing mid-contract price hikes that are linked to confusing inflation and percentage-based changes (here). BT, Plusnet, EE, TalkTalk, Vodafone and others have already adopted a similar approach to the one that Virgin Media are now deploying.
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 did 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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In short, new and re-contracting Virgin Media customers will see their prices rise by £3.50 a month effective each April, while O2 customers will see their airtime bill increase by £1.80, effective each April (their monthly device payments remain frozen at a fixed price). Customers on VMO2’s Social Tariffs and Talk Protected landline services are exempt from price increases.
Elsewhere, O2’s MBB (mobile broadband) and smartwatch customers will receive an annual price increase of 75p – half the amount that EE customers are experiencing.
A VMO2 spokesperson said:
“From January [2025], we’ll change how we communicate and implement price increases. All future price changes will be included in customers’ contracts in pounds and pence, giving them even more certainty about how their bills may change over the course of their contract.
For new and re-contracting Virgin Media customers, this will be a flat increase of £3.50 a month, effective each April, while airtime price increases for O2 customers will be £1.80 a month, with device payment amounts remaining frozen. At less than the cost of a takeaway coffee or a sandwich, this represents excellent value for connectivity that our customers are using more than ever before, at the same time as we invest more than £5 million a day in our networks and services to give our customers the fast and reliable connectivity they increasingly rely on.”
The concern for consumers is that this approach does have its flaws, such as with the fact that it may make some entry-level packages more expensive than they would have been under the old system (particularly now that RPI inflation has returned to a more normal level). The fact that providers can specify a specific rise ahead of time will also do little to dampen calls for an outright ban on mid-contract hikes in favour of fixed term pricing.
However, not all ISPs adopt the same approach as the biggest players and many smaller providers, particularly newer alternative networks (altnets), often promote packages with simple fixed price terms. We should also point out that Ofcom won’t formally begin enforcing this policy change on the market until 17th January 2025, but that’s not far away now.
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Finally, consumers should take note that Ofcom’s new policy is typically only focused upon the core subscription price of a package, thus call charges and any paid add-ons may still adopt a different approach. VMO2 also argues that it needs to raise prices because its own costs keep going up due to increases in data usage, network upgrades, new regulations, new features / content and service delivery costs etc. (e.g. energy bills more than doubling over the last two years). Inevitably, those increases often end up being passed on to consumers.
UPDATE 12th Nov 2024 @ 10:44am
O2 has confirmed to ISPreview that they’re also emailing existing mobile customers to forcibly move them to the new pricing policy, albeit with a right to exit their contract as a result. This is as opposed to the usual approach, where such changes only occur for new customers or via natural re-contracting at the end of a contract term. We don’t think VMO2 are going to win too many adoring fans with this one.
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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They still should have banned mid-contract price rises. It should be a new contract if they want to increase the price (and therefore you can leave penalty free).
Half-arsed from OFCOM, as always.
Around here it looks like Virgin are doing a huge push to get people into the “old” contracts the last week or two (including door to door sales!)… I’m guessing they want that nice %% increase on top of 24month contracts when they know more competition is coming and the TOTSCO system means they can’t hold you to ransom via retentions anymore.
The regulator has become entrapped where they look at those they regulating as needing protection. They have obviously been convinced that these rises are needed for the operators to stay financially viable, and so they just tweaked the system to get round the principle of inflation linked increases.
If you’re in a 18-24 month contract it should NEVER increase. All this rpi/cpi crap is corporate greed and nothing else, the fact OFCOM allows them to do it shows how corrupt they are and useless as the consumer champion they’re supposed to be.
Raising prices by a flat £3.50 is not a fair way to do this. If someone gets a basic broadband package at £28 per month then this is an increase of more than 12% compared to an increase of 4.5% for someone on an £80 package. This makes their cheaper broadband only packages rather expensive.
Agree. It would have been better to decide on a price increases are a fixed 8% and then spell that out as £p for each of their offerings.
Which is exactly why they are doing it.
Oh look, more than the old method and will be above inflation in April for most customers.
Voted with my wallet and defunded VMO2 and left recently.
That sign on their window in the article picture should state “Overcharging the UK” as that is more accurate.
I think they should be required to display the total cost over the contract period at least as prominently as the initial monthly cost. The total cost is all that actually matters no matter how they structure the monthly payments whether a flat rate or stepped.
Pretty much agree. I think it should be displayed as an average monthly cost over the minimum contract term, at least as prominently as the headline rate. Helps deal with these ‘6 months half price’ (on a 24-month term) contracts were seeing a lot of these days too.
Thanks Ofcom for making the cost of cheaper tarrifs even more expensive with this stupid new policy. Now you can enjoy double digit percentage rises if you’re on a cheaper sim only or broadband plan.
The right thing would have been to ban mid-contract raises. The fact this still exists is ridiculous, but surely now the fault lies with O2, not OFCOM..
It is O2 (and EE and VF and Three) raising these prices as they see fit. Blame them, call them out.
If you are Sim only you are probably better going off going with the likes of Smarty or the Lebara with a one month rolling contract which you can walk away from at anytime. I certainly don’t intend to get locked into any more 2 year contracts. They’re usually cheaper as well.
If the price goes up by £3.50 after 4 months and £7 after 16 months then that’s £112 extra over 24 months, or £4.67 per month.
The *only* reason this is allowed is to make the service appear £4.67 per month cheaper than it actually is, at the time the contract is signed. Customers are shown a bold figure in pounds and pence for the starting price, and then some tiny text saying how the price will increase over the term of the contract.
If the bold figure shown were the *average* per-month price over the contract, with the starting price in small text, that would be a much more transparent way to deal with customers.
So my O2 mobile contract will rise by just shy of 35% next April. I pay £5.40 now and i know it’s not huge money but they’re taking the p***.
They just take take take and cite the same old reasons of investment. I never saw ANY improvement with O2 for 3+ years I was on it, just got worse bar one cell, wherever I went. In the end I paid more and went to an EE MVNO where I am happy as at least I can use the the phoen when off wifi now!
@Steve hmm? This is for new contracts only 🙂
I’m hoping 3uk will install 5G in my area by February so I can finally get away from Virmin once and for all.
I’m done with these mid contract price increases
All it is is one big rip off.
It’s only the isps that can get away with it.
vm02 citing energy prices as a reason for price hikes is farce. energy prices have come right back down now. it’s just an excuse to screw customers.
The problem is one size doesn’t fit all, and all the networks are adopting similar price increases, this will affect those on the lower tariffs more than those on the higher priced tariffs.
Im lucky I get 25% off my airtime so the cost because neutral each momth…
I will agree that OFCOM have done a dirty on these changes..
I see that providers are still trying to get away with itemising the price changes as a separate amount.
Ofcom’s new General Condition C1 says the changed price should be given in pounds and pence. Guidance note 1.27 clarifies that it is not sufficient for providers to simply state the change in the price.
Ofcom also provided a very clear example of how mid-contract price increases should be presented to customers, which all the providers have ignored so far.
I have 17th January in my diary to submit a bunch of complaints to Ofcom. The ASA may not have the power to fine companies but Ofcom does.
Once you sign a contract at a price it should stay that way till the end, if they wanna put the price up then that’s a new contract and the user should be able to leave penalty free.
I swear OFCOM are so friggin useless on so many levels. Why the hell does the regulator still bloody exist?
So the OFCOM people can get jobs with ISPs, mobile operators etc. when they leave!
Isn’t that a conflict of interest? oh yeah…….the elite don’t care about that in 2024 do they?
Currently on a £3 per month contract, so it’s a 60% increase for me. Sheer profiteering
From what I’ve seen, it appears VMED O2 is introducing the £1.80 to existing O2 customers as well which means they’ll be writing to those customers. That isn’t clear in your article.
Have they confirmed that somewhere? Generally, customers that are within an existing RPI/CPI contract can’t be shifted directly to the new policy, at least not without giving those customers the right to exit penalty free.
A friend of mine received an email this morning saying they would be moving to the £1.80 with an exit clause.
I’ll see if I can get them to confirm.
I ditched Virgin long ago. Smarty Unlimited sim £15 a month with a Zyxel NR5103EV2 5G router.
Smarty are not allow unlimited on any router as I was told by Smarty
This is will affect my decision to stay with VM long term. I currently pay £19 for Broadband only, so to increase that by £3.50 is a lot. I now have FTTP in the area from OpenReach, so I might choose a company which isn’t so aggressive on it’s price increases.
I wouldn’t go to bt if I was you. If you think virgin are bad, bt are even worse!.
Is this just for Residential packages or does it include the Business broadband as well?
Pretty pissed off.
My bill is currently £7.37 for unlimited data: no catches. The RPI increase works out much better for me, and I’m quite happy with a small percentage based increase (even with an 8.6% increase, it’s still just £8) but with these new changes, I might have to consider leaving.
My bill would be £9.17 (a 24.7% increase) and it’s becoming less and less of an unbeatable deal now.
Might hop onto Vodafone considering we’re already planning on moving one line over to 70GB for £5. In a Vodafone host as it is anyways.
The way that these prices keep on going up and up every year for Sky and Virgin Media etc. It’s getting far ridiculous. And the people can’t afford it in the end. Not only that. The people miss their Movies and Sports. Like Football, Rugby, Cricket, Snooker, Golf and Tennis etc.
When my contract finishes next June 2025 i’ll be moving on.
Where to i dont know what the best provider is anymore.
I generally recommend EE or Vodafone for people since you’ll get the most consistent experience through them.
* EE is the best for outdoor coverage with lots of capacity deployed in places but little low band coverage
* Vodafone is the best for indoors coverage, generally reliable and consistent but doesn’t get anywhere near as fast as EE
Depends on your area though as ever. I’d consult Cellmapper for info.
Don’t wait, most Altnets will pay your early leaving fees. Youfibre did mine.
Virgin media are losing customer at mass already through the one touch switch service this increase will just mean people will be even more eagar to leave, I’ll certainly be leaving virgin media come march no matter what they offer me to stay, I can’t stay with a morally corrupt company
Indeed, including me…….Virgin still went as far as adding another £65 to my final bill because they were waiting for me to return the router (in the hopes of refunding me after they got it!) and a months notice which they are not allowed to do with one-touch-switching. Not that they knew why the charges were added to my final bill.
Fortunately when one touch switching is sent through it generates an automated final bill email, which I had to forward to them to get them to correct what they created by throwing darts at a board later that month.
YES! Even with One touch switching Virgin Media makes leaving them a real pain in the ass everyone, but then again you wouldn’t expect anything less, would you?
VM02 have to milk customers for every £ they can get out of them as their ambition is to buy a number of ALTNETS so that competition disappears, thus allowing the gravy train to continue.
After more years than I care to admit to, following the price increase announcement I have left O2. I spoke to them on the phone before doing so, but they offered me no incentive to stay. Change over went very smoothly with Tesco mobile, so I am a happy bunny now saving a nice amount.
I honestly believe Virgin Media to be a totally morally corrupt entity. They are the antithisis of corporate greed incarnate. Anything they can do to increase revenue they will do.
Antithesis? Apotheosis maybe.
Yes…. That
I was with virgin media and paying £127 a month. There customer service is the worst I have ever experienced. I gave sufficient notice to VM for me to leave and instructed them to collect all their equipment asap…they tried to charge me for another month even though I had another system installed saving me almost £100 a month. They are robbers
OFCOM AND OFGEM, exist seemingly to protect the prodiver of the service rather than the end user. As others have said, these published price changes hurt those on cheaper plans far more than those on the more expensive ones. Lighter users, and the less well off will feel it most.
I don’t see why we should face the brunt of these endless price rises. My wages certainly haven’t increased by as a much as the providers want to up their bills every year.
Corporate greed… That’s why. COVID allowed them all to do it and now they can get drunk fleecing customers daily, because no regulator will stop them.
£1.80 on a £7 SIM?
Our utterly useless civil service and their interferences backfires, yet again.
Just look at some of the people who run/ran Ofcom:
Ed Davey – Went on to become a failed wannabe PM politician.
Sharon White – Went on to destroy John Lewis a successful business that she took reign of
Melanie Dawes – Current head and responsible for garbage policies like mid term contract price increases
Michael Grade – Destroyed ITV with cuts and changes, destroyed regional production studios and now chairman of Ofcom who failed to control GB News with rule breaking whilst controlling less partisan media outlets and saying publicly on BBC Question Time that he supported Laurence Fox, publicly questioning Ofcom’s impartiality as a result of that.
Speaks volumes doesn’t it…