Government disappointed by unexpected O2 price rise

Government disappointed by unexpected O2 price rise

1 day ago Share Save Imran Rahman-Jones Technology reporter Share Save

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The government has asked the media regulator to revisit its rules on phone companies raising their prices in the middle of a contract, after O2 unexpectedly announced it was raising prices by £2.50 a month. Technology Secretary Liz Kendall said O2's higher than expected price increase is "disappointing given the current pressures on consumers". "I believe we need to go further, faster. I am keen that we look at in-contract price rises again," she wrote in a letter to the media regulator. Ofcom said it shared the government's concern that "customers who face price rises must be treated fairly by mobile providers".

O2 said in a statement: "We appreciate that price changes are never welcome, but we have been fully transparent with our customers about this change, writing directly to them and providing the right to exit without penalty if they wish." Ofcom has been given until 7 November to respond to Ms Kendall's letter, and said it would respond to her specific questions shortly. In January, new rules came in which cracked down on phone and broadband providers increasing prices in the middle of a contract without warning. However, last week O2 announced it would be raising its monthly prices by more than originally promised. It was able to do this because the increase was not linked to inflation, and it has given customers 30 days to leave without penalty - so long as they continue paying off the cost of their device. The company said it has not gone against the regulation and Ofcom's rules do not stop providers from raising prices. "A price increase equivalent to 8p per day is greatly outweighed by the £700m we invest each year into our mobile network, with UK consumers benefitting from an extremely competitive market and some of the lowest prices compared to international peers," it said.

Getty Images Liz Kendall has been secretary of state for science, information and technology since September 2025