O2 and Virgin Mobile customers could face £48 annual bill hike from April
The UK is in the midst of its worst cost of living crisis for decades.
Household budgets are being squeezed by rising inflation, with worse still to come as a new energy price cap and an increase to National Insurance contributions are coming in from April.
This situation could be exacerbated yet further for some O2 and Virgin Mobile customers, who could see their mobile bills rise by as much as £48 a year in just over a month’s time.
So why is this price hike happening - and if you’re a customer, is there a way to avoid it?
Here’s what you need to know.
Why will O2 and Virgin Mobile bills rise?
O2 and Virgin Mobile merged in a £31bn deal in 2021, forming a network which boasts more than 46 million broadband, mobile, phone and home subscribers.
Every year, they use the retail price index (RPI) for January and add 3.9% to it in order to work out bill increases for pay monthly customers in the new financial year.
So, with the RPI sitting at 7.8% in January 2022, bill payers can expect a hike of 11.7% from 1 April 2022.
However, how much extra you’ll have to pay depends on which of the sister networks you’re with, the type of contract you have with them and when you joined.
“We recognise price changes are never welcome, and always balance keeping our prices competitive with the need to continue investing in the services that our customers use and love,” said an O2 spokesperson.
“With our most popular tariffs costing from as little as 33p per day for superfast data with unlimited minutes and texts, our customers receive incredible value as well as extra perks such as Priority.”
O2 customers face bill hikes of 11.7% unless they have been with the network for more than 12 months.
If you joined or upgraded before 25 March 2021 - O2 says this covers most of its customer base - the rise will be capped at 7.8%.
For O2 Refresh subscribers - the type of contract O2 says most of its subscribers are on - the increase in your bill will only apply to the ‘airtime’ part of your deal, and not your handset.
So, of the £65.99 monthly bill you’ll pay for a Samsung Galaxy S22 Ultra with unlimited data on a 24-month contract, the £35 you pay towards airtime will be the portion that’s impacted by the 11.7% hike.
You’ll be paying £4.01 a month extra - or £48.12 a year.
This rise is on top of the price increases O2 introduced 6 months ago for the use of data beyond that which is permitted in your contract.
If you are an O2 customer and you want to end your contract early because of the rise in bill prices, you will have to pay an exit fee because the price change is already included in the terms and conditions you will have signed up to.
Virgin Mobile customers will pay the full 11.7% regardless of when they joined the network.
However, as with O2, the network splits its contracts into separate airtime and handset portions, and will only be applying the increase to the airtime element of your bill.
For an iPhone 13 on an unlimited ‘Freestyle’ plan costing £46.50 a month, the airtime element is £24.
With the inflation increase, you’ll be paying an extra £2.51 a month - or £30 a year.
It is understood Virgin Media O2 has written to its customers about the changes already.
Once you received the letter, you would have had 30 days to exit your contract without paying a penalty.
So it might be worth checking if you’re still within that time frame, if you wish to switch.
If you want to check how much more money you’ll be paying a month as a result of the 1 April increase, log into your online account and multiply your airtime tariff by 1.117.
Can I cut my phone bill?
You will usually be in a good position to cut your phone bill if you’re coming to the end of your contract and/or have built up a loyalty period with a provider.
All networks are open to haggling over the phone, so it’s worth calling your one to see if you can make a saving or grab a better deal than the one you’re on.
It might well be that you can claw back the amount of money you stand to lose as a result of inflation through securing a new deal.
If you spot a good deal with another provider but you’re still not within at least 3 months of the end of your existing deal, you are likely to face an exit fee - so it’s worth checking whether or not a switch will be worth it by factoring the fee you’ll have to pay.
And, if your deal with your network is expiring, it’s worth looking at all the options out there.