Ofcom criticizes O2 for exceeding promised price increases

Ofcom, the UK’s media regulator, has expressed disappointment with O2 for implementing price increases that surpass what was initially communicated to customers when they signed their phone contracts. This action, according to Ofcom, goes against the spirit of transparency rules regarding price adjustments. Despite new regulations introduced in January 2025 to prevent phone and broadband companies from raising prices mid-contract without warning, O2 asserts it hasn’t violated these rules, arguing that Ofcom’s guidelines don’t prohibit annual price changes meant for network improvements. The company highlights its annual investment of £700 million in infrastructure and states that customers can cancel their contracts without penalty. However, consumer expert Martin Lewis strongly criticized O2’s move, viewing it as undermining Ofcom’s authority and potentially paving the way for other companies to follow suit. O2 informed customers they had a 30-day window to exit their contracts without termination fees, although handset costs would still need to be paid. Lewis, however, raised concerns that older and vulnerable customers might miss this window, especially since the price hikes aren’t effective until April 2026. O2 recently emailed customers about a £2.50 monthly increase from April, a jump from the previously advertised £1.80. Ofcom has reiterated its expectations for mobile companies to treat customers fairly and advises affected customers to use their right to exit their contracts without penalty. Telecoms analyst Paolo Pescatore suggests O2 is ‘pushing the boundaries’ of regulation, while Tom MacInnes of Citizens Advice believes Ofcom’s actions haven’t been strong enough, calling for more decisive measures to eliminate mid-contract price rises. Lewis has also written to key government officials and Ofcom’s head about the issue, though Ofcom declined to comment on the letter. A government spokesperson affirmed the commitment to a fair and transparent telecoms market, emphasizing strengthened consumer protections.