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Chancellor Rachel Reeves has written to UK telecoms chief executives to demand more protection for consumers from mid-contract price rises, in an escalation of pressure on operators over rising mobile and broadband tariffs.
“We are asking you to reinforce your commitment to treating customers fairly, including by confirming customers under contract will not face price rises beyond those they signed up for,” Reeves — along with science and technology secretary Liz Kendall — wrote to chief executives of companies including Virgin Media O2, BT and VodafoneThree.
The letter, which has been seen by the Financial Times, comes after Virgin Media O2 last month announced it would put up prices for 15.6mn of its mobile customers by £2.50 a month from spring next year, having previously said the increase would be £1.80.
Other operators including BT, TalkTalk and VodafoneThree have also announced above-inflation price rises for new customers or those who renew their contracts.
The increases come after telecoms regulator Ofcom changed its rules in January to ban inflation linked mid-contract price rises for TV, broadband and mobile contracts.
However, the regulator continued to allow companies to put up prices if they expressed them as pounds and pence — rather than in inflation-linked percentage terms. Operators were also told they had to let customers know about increases in advance or give them 30 days to cancel contracts penalty free after any change.
In the letter, Reeves and Kendall said they would be convening a roundtable to “discuss further voluntary action to support telecoms customers”, as well as “areas that government can do more to enable the sector to drive investment in the UK’s digital infrastructure”.
Virgin Media O2 said: “We have been fully transparent with our customers about this change . . . While we recognise price changes are never welcome, an increase equivalent to 8p per day is greatly outweighed by the £700mn we invest each year into our mobile network.”
VodafoneThree said: “We know no one likes price rises, but they are essential for us to keep investing, innovating and providing best-in-class service.”
BT said: “We remain committed to Ofcom’s requirement to display upfront pounds-and-pence charges across the full length of a customer’s contract. The price of connectivity in the UK offers great value, especially when compared to other European countries.”
TalkTalk declined to comment. The Treasury and the Department for Science, Innovation and Technology did not immediately respond to a request for comment.
The letter comes after consumer rights campaigner Martin Lewis wrote to ministers about the increases, demanding action. Ofcom also said it had written to telecoms companies about the situation.
However, Matt Howett, chief executive of telecoms consultancy Assembly Research defended the industry, saying it was “hard to imagine another regulated sector which has delivered as good an outcome for consumers as telecoms”.
“In mobile, consumers are using more, but paying less. Since 2019, more than £10bn has been spent on improving quality, while average real-terms mobile prices have fallen by a quarter.”
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