Mobile customers are trapped in a Catch-22 situation between mid-contract price hikes and exit fees of over £400 to end their contract.
The “big four” mobile firms – EE, O2, Three and Vodafone – raise prices every April in line with inflation, plus an additional 3.9%.
Which? calculated that the average EE customer on a bundled contract would see an annual increase of £66.36, while the typical Three customer would see a hike of £56.40.
The same EE customer would face exit fees of £424.67 to leave a year early and Three’s customer would need to pay £379.46 to leave their contract.
EE, Three and Vodafone use Consumer Price Index (CPI) – leading to price increases of more than 14% this year, while O2 uses the higher Retail Price Index (RPI) measure, meaning some customers will face hikes of more than 17%.
As the price rises are often applied mid-contract, customers either have to accept them or pay exit fees to leave.
The price hikes are highest for bundled contracts when the customer pays for both usage and the handset.
Read more: Seven ways to save money on mobile phones and contract costs
Using the example of an EE customer who took out a 36-month contract for an iPhone Pro Max with unlimited data, Which? estimated the customer would pay an additional £105 for the handset over the next year due to the price increases.
It calculated that the Three customer with the same contract would pay an estimated £86 extra for the handset over the next year.
An average SIM-only customer with EE would see a potential annual increase of £46.20, followed by O2 and Vodafone customers who would see annual price hikes of £42.72 and £42.36 respectively. The average customer with Three would see the lowest annual increase of £25.20.
EE SIM-only customers would face the highest exit fees of £295.36 if they wanted to leave a year early, followed by Vodafone and O2 customers at £287.88 and £237.08.
Three customers face the lowest exit fees of £169.59 for leaving their contract a year early.
For O2 and most Vodafone contracts, only the airtime part of a contract is subject to inflation.
Which? is calling on providers to reconsider price rises – regardless of whether they are “transparent” – as consumers grapple with the ongoing cost of living crisis, and allow customers to leave their contract without penalty if charges are hiked mid-contract.
Rocio Concha, Which? director of policy and advocacy, said: “It’s hugely concerning that many mobile customers could find themselves trapped in a Catch-22 situation where they either have to accept exorbitant – and difficult to justify – mid-contract price hikes this spring or pay costly exit fees to leave their contract early and find a better deal.
Read more: Cost of living crisis: Top tips to cut broadband and mobile bills
“With many households struggling to make ends meet, it is completely unfair that people are trapped in this situation. Which? is calling on providers to act quickly and reconsider any price rises. Firms should cancel 2023 hikes for financially vulnerable consumers and allow all customers to leave without penalty if they face mid-contract price rises.”
An EE spokesperson said: “We strongly refute the research findings. SIM plans and handset plans meet different needs and handset customers get more benefits included. Currently, we don’t widely offer plans where customers pay separately for the handset and our customers pay their monthly fee for the services they get.
“We understand that price rises are never wanted nor welcomed, but recognise them as a necessary thing to do given the rising costs our business faces.
A Virgin Media O2 spokesperson commented: “We know that price increases are never welcome but, unlike other providers, we freeze the cost of device repayments and are only changing our airtime prices, meaning average bills will go up by an effective 10.0% or less than 10 pence per day. This is below inflation and reflects the fantastic value we provide for connectivity that is used almost constantly.”
Watch: Easy budgeting tips for when you leave home
Download the Yahoo Finance app, available for Apple and Android.
from "price" - Google News https://ift.tt/2B6QNfM
via IFTTT
No comments:
Post a Comment