(qlmbusinessnews.com . Tue 4th Nov, 2025) London, UK —
O2's £2.50 Monthly Increase Sparks Outrage: Secretary of State Demands Transparency
The UK government has urged the communications watchdog to re-examine regulations surrounding mid-contract price hikes by telecom companies, following a surprise announcement by O2 to increase its charges by £2.50 a month.
Liz Kendall, the Secretary of State for Technology, expressed her disappointment at O2's major price hike, highlighting the undue strain it puts on consumers amidst economic hardships. “It's clear we need to act with greater urgency. Revisiting the rules around price rises during a contract is imperative,” she stated in a communication to the regulatory body.
The watchdog, Ofcom, has echoed the government's concerns, emphasizing the necessity for fair treatment of customers facing such price hikes from their mobile service providers.
O2 defended its decision, stating, “We understand the concerns related to price adjustments, but we have ensured transparency with our customers regarding this change. They have been notified directly and are offered an opportunity to terminate their contracts penalty-free if they choose to.”
Following Kendall's appeal, Ofcom has until the 7th of November to deliver a response, promising a prompt addressal of her queries.
This situation unfolds after new regulations were introduced in January to curb unexpected mid-contract price increases by phone and broadband providers. Despite these measures, O2 went ahead with a price increase that exceeded initial promises, attributing the hike to factors unrelated to inflation.
The firm maintains its compliance with regulations, pointing out that its significant annual investment of £700m in its mobile network justifies the slight increase, which they equate to 8p a day. O2 argues that the UK market remains highly competitive, offering some of the lowest prices internationally.
However, Kendall accuses O2 of breaching the “spirit” of the established guidelines in her letter to Ofcom's Chief Executive, Dame Melanie Dawes. She has prompted the regulator to assess whether the 30-day notice period for switching providers simplifies the process for consumers looking to change services.
Moreover, Kendall has called for a review to determine if the January regulations sufficiently ensure transparency regarding price increases during contracts.
Ofcom's current rules mandate that companies disclose potential bill increases in precise figures before entering a contract. Despite initially stating a £1.80 monthly increase by April 2026, O2 now plans to impose a £2.50 rise.
Kendall believes it's essential for providers to notify all customers, including those with pre-existing contracts, about price adjustments.
Citizens Advice's policy director, Tom MacInnes, advocates for a more stringent approach, stating the necessity to redefine what “fixed” means within contracts to better protect consumers. “The possibility of O2's actions setting a precedent for other providers cannot be dismissed lightly,” he added, urging Ofcom to eliminate mid-contract price rises entirely.
Telecoms analyst Paolo Pescatore suggests that while UK network operators struggle financially, the balance between raising funds and investing in future networks is delicate. Despite the potential for industry-wide price increases following O2's lead, he speculates that adverse consumer reaction may deter other companies from similar moves.
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