Mobile phone bills to soar by up to 10% as networks hike tariffs

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Tea

The UK’s four major mobile phone networks are preparing to raise monthly tariffs by up to 10% for millions of customers over the next few months.

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BT Group, Virgin Media O2, Vodafone and Three UK are expected to hike prices, further deepening the cost of living crisis.

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The network says the increase will allow them to recover the billions invested in upgrades to cope with the increase in data usage, especially arising from the introduction of 5G.

But they could lead to a showdown with regulators who are monitoring the squeeze on household income from higher energy, food and higher street prices as inflation moves toward 6%.

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Virgin Mobile and O2 will increase airtime prices for all customers by 3.9%, plus the Retail Price Index rate, which currently stands at 7.1%.

However, their customers will be spared the re-introduction of roaming charges for access in the EU.

BT, which bases its price hike on a lower consumer price index, will notify its customers – including its EE network – about the increase in their bills next month. The CPI is currently at 5.1%.

Tesco Mobile, which runs on O2's network, fixes its tariffs for the lifetime of the contract, but is increasing the fee for usage beyond any monthly allowance.

A Virgin Media O2 spokesperson said: “We always balance keeping our prices competitive with the need to continue investing in our network, improving and improving the services our customers know and love.

"Our contracts make it clear that prices are going to increase later this year and we will keep customers updated on any changes to their bills."

A BT spokesperson said: “As usage continues to increase across our network and our customers depend on us for connectivity more than ever, it is important that we continue to invest in our network, services and the latest technology .

“So as per our terms and conditions our prices are going to increase from 31st March, however, customers on BT Home Essentials, BT Basic and Home Phone Saver will not see their price hike in 2022 and we are looking at others. How can I help those who may be financially weak?

Vodafone UK said: "We know no one wants to see an increase in prices, but these reflect the rising costs we continue to face running our network and providing our services. Like many other industries. As such, we are faced with rising costs of energy, staffing, logistics and transportation.

“Unlike many other industries, we also have costs from the regulator – which has chosen to maintain a multimillion-pound license fee for spectrum use – and from the government, who have required us to make significant and costly changes to our supply chain. .

"These annual price increases are necessary for us to maintain investment in our network and services, while the costs we face continue to rise."

In a note to investors, Adam Fox-Rumley at HSBC cautioned: "Investors should be supportive if companies choose to increase prices marginally this year.

“Far from creating immediate goodwill with customers and politicians, this will strengthen the stability of the pricing structure over the long term.”

A spokesperson for watchdog Ofcom said: "While Ofcom does not set retail prices, we urge telecom providers to take into account the increasing financial pressures on their customers when considering increases."

Manak has contacted three for a response.

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