Get Informed: Mobile Mid-Contract Price Rises Explained

Mobile contracts were once easy to understand. You would pick a handset, agree on a price, and pay that same amount every month until the contract ended. Now, things are not as simple as they used to be.

Many people using mobile phones in the UK are finding price changes in the middle of their contract. This is also known as mobile mid-contract price rises. These price hikes now happen more often and make UK consumers feel upset, especially when they do not know about these extra costs until after they sign up.

With the cost of living going up, people feel this pressure on their homes. The one thing people do not want now is to get an email from their phone company saying, “Your monthly bill will go up next month.”

But this is what millions of people who use their phones are going through right now.

This guide explains:

• How does a mid-contract mobile price hike happen
• Why are mobile providers able to raise prices during a contract
• What are Ofcom and the UK Government doing about price rises
• How can you protect yourself from unexpected price rises
• Can you leave your contract early if there are price hikes

Why are mobile mid-contract price rises happening?

Mobile providers used to give you a fixed cost every month. Now, they often add annual price hikes. Your contract can be tied to things like inflation or a set amount that goes up each year.

For many customers, this means:

There are three big reasons that mobile providers raise their prices even when you are in the middle of your contract.

1. Inflation-linked clauses
   A lot of contracts use the Consumer Price Index (CPI) plus 3.9%, or something close to this. It means that price rises are linked to inflation.
2. Network investment
   Telecoms companies say they need money to pay for new things. They invest in 5G, fibre, mobile broadband, and other infrastructure. Keeping these working or growing needs regular funding.
3. Revenue protection
   The cost of handsets is high. Providers deal with this by increasing the airtime plan charges. This helps them cover the handset costs.

The mix of these things has led to price changes that are not always the same. Sometimes, the prices can even change in ways people do not expect.

Looking for a better deal? Compare mobile deals and avoid mid-contract price hikes.

What has changed? Ofcom bans inflation-linked price rises

From 17 January 2025, Ofcom brought in a big change to how UK mobile and broadband prices work. Before this date, telecoms companies could raise prices during your contract. They linked these increases to the rate of inflation. Most of the time, the measure they used was the Consumer Price Index (CPI). Sometimes they used the Retail Price Index (RPI). Because of this, people with a contract did not know what they would pay in the end. The final price depended on the rate of inflation at the time.

Before the rule changed, almost all big mobile providers and several broadband providers put this in their terms and conditions: your price will go up during the contract by CPI plus an extra percent. For example, some of the largest telecoms companies made prices go up by CPI plus 3.9% in every April, no matter if customers were halfway into their contract or only a few months in.

The main issue was not just how much the annual increase would be. The problem was also the lack of transparency. The Consumer Price Index, or CPI, changes from year to year. When inflation peaked in the UK, the CPI rate went up to levels people had not seen in a long time. A small clause ended up making prices go up a lot more than people thought. Many customers saw their bills go up by more than what they had planned for.

Ofcom got thousands of complaints from people. A lot of people were confused. They thought their contract had a set monthly price. But then they got an email telling them the price would go up. The increase was by a percentage tied to changes in inflation, and not many knew what this meant or what their monthly price would be in six months. People felt they had no way to control or understand the changes.

As a result, Ofcom found that price rises that use inflation-linked terms were not easy to predict or understand, and were unfair. The regulator said price rises based on CPI made things unsure. Neither the mobile provider nor the customer could know the future price before time. Plus, Ofcom found that customers had a hard time when they tried to compare deals from different companies. The price was not set, so the final cost could end up much bigger than what was shown.

To fix this, Ofcom said that telecoms companies can’t use inflation-linked or percentage-based price changes in new contracts anymore. This comes into effect from January 2025. Now, telecoms providers must say any changes in price upfront and give the exact pounds and pence. The rule means customers will know at the start how much they need to pay not just at first, but after any planned price changes, too.

For example, if a contract has a £2 per month rise after one year, the provider must show both costs at the start.

• The price for months 1–12
• The higher price after the increase

Customers can now check the actual cost of the contract. It does not show only what people pay at the start. This is an important change that helps with transparency. Now, people can look at the full cost for the whole contract term. With this, they can make fair choices and compare providers better.

But the industry has found ways to work with the new rules fast. This is why some people still feel upset about it.

The loophole: price hikes are still allowed

Ofcom stopped companies from connecting price hikes to the Consumer Price Index. But the regulator did not stop price hikes completely.

Providers are still able to go up on prices during a contract if:

• The exact rise is shown when the contract starts.
• The rise is shown plainly as a set amount of money (like £2 each month).

This shows that price changes every year are still happening. Telecoms companies can still raise prices in the middle of a contract. They do not have to tie the increase to inflation or the cpi rate. If your agreement says there will be a £2 rise after 12 months, this can still go ahead. It does not matter if inflation drops a lot.

In other words:

• Price increases that follow inflation are not allowed.
• Rises for set terms are allowed by law

Telecoms providers have changed how they update prices. Now, they do price increase equivalent amounts, and not percentage-based increases. In practice, customers still get emails about price rises that they did not expect. But the telecoms companies are now within the rules because they showed the price increase amount when you signed up.

A typical mid-contract increase might say:

• The monthly charge will be £28 for the first 12 months.
• The monthly charge will go up to £30 after that for the rest of the contract.

This is allowed under the new regulation.

Why this causes continued frustration

Many people thought the new Ofcom rules would stop mid-contract price hikes for good. But the changes only took out the part where costs go up because of inflation that no one can guess. Providers are still allowed to put planned annual price hikes into their contracts, and most have chosen to do this.

The mobile industry says they need this way because running the telecoms business costs a lot. They talk about costs like these:

• Growing 5G and fibre networks
• Giving handset discounts
• Day-to-day running costs and energy bills
• Putting money into customer service and online ways to connect

The regulator is still worried that people do not always expect these changes. A switch from showing costs as a percent to using pounds might look small. But right now, during the cost of living crisis, even an increase, like £2 or £3 more each month, is important.

Many people feel that mid-contract price rises make a mockery of Ofcom’s intention. A price can go up after you sign a 12- or 24-month agreement. For families with more than one contract like mobile, home broadband, and energy, several annual increases add up and hurt their finances.

Case study: Virgin Media O2 mid-contract price rise backlash

One of the biggest examples of price hikes during a contract came from Virgin Media O2. It is a large telecoms company. They offer both mobile and home broadband services. The case with Virgin Media O2 shows that price changes can start as a small thing. But they can turn into a big issue for people all over the country.

Virgin Media O2 sent out an email to let people know about an annual increase on their monthly mobile bill. The first email said the rise would be £1.80 each month. A lot of people did not like this news, as they have other bills going up too. Later, Virgin Media O2 sent another email. It said the increase would be £2.50 per month instead.

The change made millions of customers pay about 39% more than they first thought. Consumer groups say up to 15 million people who use mobile services got this message.

This situation highlighted several issues:

1. Customers had already agreed to the first price rise amount. They had planned for it in their minds.
2. The company put up the price rise amount, even when the first message said it would be lower.
3. Many people felt misled. They started to ask how a price could go up more after the first message.

The reaction came fast. Consumer advocacy groups and many people in the industry did not like the change. They said changes like this take away from the purpose of Ofcom’s new approach to transparency. Critics also said that these unexpected price rises might make the ban on price-increases linked to inflation useless. This is because companies can later put in a different rise as long as they show the amount in pounds and pence.

Some people have said the price hikes are a “mockery of Ofcom rules”. The Ofcom rules were put in place to protect people from sudden price hikes. But, instead of being protected, customers got a different surprise. They faced a bigger set price increase, not just one linked to percentages.

There was more frustration with this. Right now, if a customer signs a contract that talks about a price increase, then as long as the provider makes the increase clear, the customer might not get out of the agreement without paying extra to leave early. The price increase is important here. When the yearly increase notice goes out, the customer is pretty much stuck — even if the annual increase is more than what they first thought it would be.

Many people who use the service have worries about fairness. They want to know if the extra amount in the pricing notice should count as final. Some feel upset because a telecoms provider can send one notice but later send another, raising the increase even more. This makes them wonder how they can feel sure about the price of their contract in the future with telecoms providers.

The case got the attention of Members of Parliament. They started talking about whether the current rules are enough to keep people safe from price changes in the middle of their contract. Some MPs want to know if telecoms companies should be allowed to raise costs at all during the minimum term. Others spoke about fairness and said this is a bad time for price hikes. Many families are having a hard time with money, so it may not be right for telecoms to put up the price on airtime plan deals when people already feel the pinch.

Calls for intervention included:

• A request for Ofcom to make stronger rules. This is to stop changes to prices after the first message from the company.
• A suggestion for the Government to look at making new laws. These laws would ask for fixed-price contracts that last for the whole time agreed on.
• There are demands to show the cost of the handset and the airtime plan as two things. This way, customers can see where their money goes. It helps people not pay too much once the handset has already been paid for.

This case made people talk more about how phone contracts work. Some plans split the cost into two parts. One is for paying off the handset, and the other is for the airtime plan. Most annual price hikes happen to the airtime part. After you finish paying for your handset, the airtime plan can still go up each year. This can confuse many people and make them feel frustrated. A customer might find that they keep paying more, year after year, even though the phone is already theirs.

The Virgin Media O2 story showed the UK how price hikes can hit people with lower monthly plans the hardest. For example, if there is a £2.50 price hike on a £10 plan, that means you would have to pay a 25% increase. The telecoms provider tells people about the price hikes as a fixed number, not as a percentage. This means customers who pay less feel the higher rise, while those with premium plans or tariffs have a smaller rate of increase.

The controversy showed just how much telecoms companies can affect people. When a big company changes its pricing for millions of users, the cost to customers is large. This is hard for many because families may be paying more for home broadband, energy, and other things at the same time.

The rules now do not allow inflation-linked pricing. But this example shows that price hikes are still happening every year. A price increase like this can make customers upset. The price was shared in pounds and pence. This means it followed the new laws. However, some people feel that the price should not be changed after the first message.

The key thing to know here is that price rises are still going on, but now the way it is done has changed. The Ofcom update has helped make things more clear, but it did not stop mid-contract price increase for users. People have to read the contract well and look for details about price increase. Check if there is an annual increase, a price rise after a few months, or if the contract has a price for both airtime and handset. The need for more transparency still stays with Ofcom, so customers must watch out for price increase or price rises even now.

In the end, this case started talks again about fairness, trust, and if telecoms pricing is clear to people. It made more people look at their contract terms. A lot of them now think that switching or looking at choices before signing could be the best way to not get price hikes in the middle of a contract.

Compare mobile deals and switch to a plan that fits your budget.

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How mid-contract price rises affect customers

A sudden price jump changes how much you have to pay for your contract.

Here’s an example of a 24-month mobile deal:

Over the contract:

• Expected cost: £528
• Actual cost: £558

You paid £30 more than the advertised deal.

Many people do not see this until they look at their bill.

For people on lower-priced plans, the increase feels bigger.

A flat price rise amount helps the provider more when the tariffs are lower.

Airtime plan vs handset financing: A hidden pricing trick

Many mobile contracts now separate:

• Device / handset financing
• Airtime plan (mins, texts, data)

When the contract ends:

• The handset finance part comes to an end.
• The airtime plan goes on charging, sometimes at a higher price.

Many people do not realize they still pay extra for their phone even after they finish paying it off.

Providers have been widely criticised for this.

Differences between mobile and broadband mid-contract price rises

Mobile and home broadband work in the same way for most people. There are many companies out there that offer home broadband and mobile broadband. These companies often be active in both markets. That is why you can see that mobile and home broadband have similar features and ways of working.

Examples of companies with both services:

Broadband providers often raise prices each year in April. You can expect these annual price hikes from most broadband providers. The price hikes usually happen around this time every year.

Many households face:

• The cost to use broadband at home is going up.
• Phones bills are also higher now.
• Energy prices keep going up too.

…all at the same time.

This is why the government recently stepped in.

New: UK Government action to stop mid-contract price hikes

There is not a lot of action by the government to stop mid-contract mobile price hikes. At this time, phone companies can still raise prices in the middle of your contract. Many people do not feel this is fair, but there has not been any law to make companies stop these price hikes yet. A lot of people want the government to help with this, but for now, you just have to read your contract well. Make sure you know about any price changes when you sign up. Sometimes, your contract will include something about price hikes. So stay aware and read all details before you agree.

Yes. Government pressure has been increasing.

What the Government has done:

The Secretary of State for digital and communications has said that:

• Mobile providers should not take their customers for granted, especially now with the cost of living crisis.
• The telecoms industry needs to stay an extremely competitive market.

Some MPs say that providers should cover the rising costs themselves because of inflation. They do not want companies to make customers pay more.

What might happen next?

Government proposals under review:

• All fixed price contracts need to be mandatory.
• When the handset is paid off, there will be automatic switching to cheaper plans.
• Contract language will be more simple, so customers can know exactly what they are signing.

If this gets approved, it will be good news for UK consumers.

What Ofcom expects from telecoms companies

Ofcom is the UK group that looks after the communications business. This includes mobile networks, broadband providers, pay-TV, and post services. Many people started to see annual price hikes and sudden price rises in the middle of contracts. Because of this, Ofcom began to get a lot of complaints. People said they did not feel that the cost of their contract, with things like broadband, was made clear to them over time.

Ofcom is the regulator in the UK. It sets rules that all telecoms companies have to follow. Mobile providers must tell people about the total cost of their contract up front. This means not just the first price, but the whole amount. Ofcom wants there to be clarity, consistency, and transparency with every mobile provider.

Dame Melanie Dawes, who is the CEO of Ofcom, often talks about why there has to be more transparency. When she looks at complaints about price changes, she says people must not have to guess what their mobile service will cost. Ofcom has said that the customer needs to find out about a contract in clear and simple words. They need to know how much to pay each month and if the price will change during the first part of their contract.

The regulator says that a contract that talks about “annual price changes” or “CPI-linked increases” in a way that is not clear can be confusing for people. A customer might not know enough when the rules about price changes are hard to read. If the price of a phone plan goes up whenever, and if this is linked to inflation, it makes it very tough for people to see which plan really gives the best value. The main idea here is simple: to help people, everyone should be able to compare prices side by side in the same way. That is needed for good consumer protection.

Mobile providers and broadband companies in the UK need to do the following:

• Show the pricing in a way that is easy to read.
• Make sure to explain up front if the price will go up each year.
• Use clear numbers to show any price changes that will happen.
• Do not use hard words or hide key terms in the fine print.

Ofcom says that it is important for companies to be clear with people not just on their website. This rule should be in ads, emails, and everywhere they talk about the contract. Companies must share clear information in stores and over the phone when someone calls customer service.

The regulator has said that telecoms companies should not use confusing pricing to hide price rises. Some networks split the costs into a handset payment and an airtime plan. When a network puts up the cost of the airtime plan, people may not see that the price is higher if the service stays the same as before. This is not good pricing. Telecoms companies that charge for the handset and airtime plan separately must make sure people know if the change is about the monthly service, the handset, or both.

Ofcom wants mobile providers to use clear language when they talk about price changes. They should not use words that might confuse people, like talking about increases tied to inflation or say a “price rise equivalent.” The regulator says the industry needs to be honest about price changes. Price changes should be easy for people to see, with nothing hidden in tricky words about what they will pay.

Price rises that happen in the middle of a contract get a lot of attention. Ofcom says people should not get surprise price hikes during this time. You can’t switch to another plan without paying extra if prices go up now. These price rises in the middle of a contract also limit what the customer can do. You stay locked in to paying more and don’t have the chance to go to a cheaper option. Ofcom thinks this hurts competition and stops people from having more freedom as customers.

Ofcom says that when you sign a telecoms contract with a price rise, this must be an important part of the deal. The telecoms provider has to tell you right at the start how much the prices will go up and when that will happen. If the provider does not tell you about this, you may be able to leave the contract early without any extra cost.

Ofcom checks to see if mobile providers and broadband companies follow the rules. The team looks at things like customer contracts, sales books, website steps, ads, and email messages. If companies do not show prices clearly, Ofcom can take action. This can mean money fines, making them change how they talk to customers, or telling them to update their terms to keep people safe.

Ofcom has made clear that:

• Customers need to know about any price changes well before they happen.
• Providers must not let people think a contract has a fixed price if it can go up.
• Telecommunications companies have to make sure their pricing helps keep an extremely competitive market.

Ofcom says the mobile and home broadband market needs competition. If people feel stuck or think they have been misled, they do not look for better deals. This means competition stops working well. Ofcom thinks competition is important. It helps bring the lowest prices and better customer service in broadband and home broadband.

A senior spokesperson from Ofcom said that regulators are ready to act if telecoms companies ignore or try to get around the rules. They made it clear that the goal is to make sure people are not misled about the real price of telecoms services. Ofcom also wants to hold these companies responsible if they take advantage of people not knowing the full details.

Ofcom has a clear message for all:
Price transparency has to be there.
People need to know what they are agreeing to right at the start.
They should not just find out through an email later that their bill will go up.

Can customers leave their contract if the price changes?

Yes, but this will only apply if the price increase was not clearly talked about at the time you signed the contract.

You can leave penalty-free if:

• The contract did not say how many more pence would be added.
• The provider put up the pence amount after you signed (for example, from £1.80 to £2.50).

You usually cannot leave if:

• The price increase was shared with you when you signed up.

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How to avoid mid-contract price hikes

Here are strategies that work:

• Choose providers offering fixed-price contracts

These offer price stability.

• Consider SIM-only

SIM-only plans often do not get price rises linked to the cost of the handset. This means you just pay for the SIM and not extra for a phone. Because of this, you can avoid more costs that come with handset deals. A SIM-only plan gives you the option to use your own handset and helps you keep the price low.

• Compare plans before renewing

Many people move up to higher pricing, but they might not even notice it.

You don’t have to accept higher prices. Compare mobile deals now and see if you can save.

FAQ’s about mobile mid-contract price rises