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- It has been observed that customers are willing to pay more for their broadband use and consumable mobile phone airtime bills.
- The majority of firms use the CPI inflation index for setting price rises, but this firm uses the RPI index instead.
- Virgin Media O2 has stated that the price increase is necessary and that it still offers “fantastic value”
Customers of O2 and Virgin Mobile Face 8.8% Increases to Mobile Phone Airtime Bills!
Inflation-linked price increases are an unfortunate reality that many consumers have to face from time to time. This year, millions of households are set to experience a rise in their phone airtime bills hike and broadband usage bills.
While most providers are passing on increases of around 15%, customers of O2 and Virgin Mobile will face some of the highest increases, specifically in their mobile phone airtime bills.
Starting from April 1st, customers of O2 and Virgin Mobile will see a significant 17.3% increase in their airtime bills. It’s important to note that this increase only applies to the airtime portion of customers’ bills, which covers the cost of minutes, texts, and data.
The price of handsets will remain the same. This increase is based on the inflation figures, with the February 2022 rate standing at 13.4%, plus an additional 3.9% margin.
However, for customers whose phone deals commenced before March 25th, 2021, the increase will be slightly lower. They will face a 13.4% increase in their airtime bills, with no additional 3.9% margin.
This discrepancy is because the company uses a different measure of inflation, the retail price index (RPI) measure for January 2024, which was announced at 4.9% on February 15th, 2024.
It is worth mentioning that Virgin Mobile and O2 are now part of the same company, known as Virgin Media O2, following a merger in 2021. Despite the merger, the two brands continue to operate independently.
As the best network in the UK, Zoiko Mobile believes these price hikes will undoubtedly impact customers’ monthly budgets, as phone bills are a regular expense for most households.
Affected customers need to plan accordingly and adjust their budgets to accommodate these increases. Or might be their a big chance to switch operators.
Additionally, they may consider reviewing their current phone contracts, considering alternative network providers’ price charts, and other facilities like free international call limits, EU roaming facilities for data usage, and calling minutes, and exploring alternative options to ensure they are getting the best value for their money.
While price hikes are never like a dog with two tails for consumers:
Sounds funny? But it’s a real fact that is affected by many consumers in their daily needs.
It’s important to understand the reasons behind them. Inflation, increasing operational costs, and investments in network infrastructure are some of the factors that contribute to these changes.
Network operators must strike a balance between offering competitive services and managing their financial viability.
Unfortunately, it is often the customers who bear the brunt of these adjustments.
As the landscape of the telecommunications industry continues to evolve, consumers need to stay informed about their options and rights as customers.
Regularly reviewing phone contracts, understanding the terms and conditions, and exploring alternative providers can ensure that individuals are making informed decisions and receiving the best value for their hard-earned money.
Customers as of now of O2 and Virgin Mobile will face a significant 17.3% increase in their mobile phone airtime bills from April 1st.
While these price hikes may pose financial challenges for customers with added insult to injury, it is essential to understand the factors contributing to these changes and explore alternative options to ensure the best value for money. Staying informed and proactive as consumers can help navigate the ever-changing landscape of the telecommunications industry.
Virgin Media O2 has confessed by their announcement:
Virgin Media O2 has announced that it will be increasing monthly bills for its customers. The company uses the retail price index (RPI) measure for January 2024, which was announced as 4.9%, as the basis for their bill hikes. In addition, Virgin Media O2 adds 3.9%, resulting in a total increase of 8.8%.
Virgin Media O2, which comprises Virgin Media broadband and O2 for mobile phones and tariffs, has defended the price rise by comparing it to the cost of a takeaway coffee, stating that the average increase for Virgin Media customers will be £4.16 per month.
According to a spokesperson for Virgin Media O2, this price increase highlights the value that the company offers for increased connectivity, which is used more than ever.
For O2 customers, the price increase of 8.8% will only be applied to the airtime costs of their mobile bills. This means that the increase will not affect the cost of the handset itself, but only the data and calls part of the phone bill.
Overall, O2 expects the monthly bill for their customers to increase by 5% in real terms, taking into consideration the price rises on the airtime element of their mobile bills.
In response to the bill hikes, a spokesperson for Virgin Media O2 has stated that the company is heavily investing in its network infrastructure to provide faster, resilient, and reliable telecommunication connectivity for its customers.
The increase in revenue from the price hikes is stated to be outweighed by the £5 million investment made by the company to upgrade its 5G network coverages and services for a better customer experience.
It is important to note that, in compliance with Ofcom rules, Virgin Media O2 will not be increasing bills for customers on its social tariffs.
“Social Tariffs” are low-cost mobile or broadband deals that are offered to households facing financial challenges. These deals are typically available only to those who are on benefits, have lower incomes, or are elderly, and are not open to everyone.
The rising costs of providing broadband to customers on social tariffs, despite not increasing their bills, are often passed on to other customers. This is because the expenses related to providing these services still increase in line with inflation.
However, these reasons, which are often not disclosed by mobile and broadband companies, do not fully explain why many of their prices rise by more than inflation.
Additionally, the practice of adding a charge on top of inflation-linked increases is a relatively new phenomenon, with numerous providers adopting this strategy only in recent years.
Alex Tofts on Broadband Genie gave expert advice and highlighted that, in 2023, Virgin Media, along with other widely available network providers, significantly increased their prices for customers.
This year, while the jump in prices is expected to be less dramatic due to inflation easing, there is still anticipation of a sizable increase by utilising the RPI figure.
The challenge for Virgin Media O2 customers is that they will be required to accept the additional cost, even if they are mid-contract, as leaving their contract may come with a substantial exit fee.
On the other hand, Zoiko Mobile consistently maintains normal pricing features unaffected by inflation-based price rises. It is important to note that if you are out of contract, you have the freedom to switch your provider to Zoiko Mobile at any time without having to worry about sudden price spikes or obstacles.
Zoiko Mobile offers a range of services, including Data Only SIM plans, SIM-only deals, cheap refurbished phones in the UK, free SIM cards, free international calls from over 70 countries, roaming calls and data, SMS, and free 5G coverage.
Explore Zoiko Mobile’s inflation-immune Pay-as-you-go SIM deals available in your area to potentially find a better deal.
