UK's largest mobile network with 23.2 million customers to hike prices

Britain's biggest mobile network has announced a fresh wave of price hikes for millions of customers - despite many being locked into fixed-term contracts. Around 23.2 million users across the country will be affected by O2's move, causing concern among customers already grappling with the cost-of-living crisis.

The telecoms giant, owned by Virgin Media O2, is implementing inflation-linked increases that could see monthly bills rise by as much as 8.8%. Customers who sign up from today (October 24) will be hit with the price increase next April.

"With demand for mobile data at an all-time high, we're introducing a 70p per month increase to annual price rises for O2 customers, effective each April," an O2 spokesperson confirmed. "An annual rise of £2.50 a month, around 8p a day, continues to represent excellent value for services that customers are using more than ever before."

Telecoms companies were ordered by Ofcom to display mid-contract price increases in the form of pounds and pence from January 17. These upticks usually occur in April in line with either the Consumer Price Index (CPI) or Retail Price Index (RPI) measures of inflation, plus an additional 3.9%-a practice that has drawn increasing scrutiny from regulators and consumer rights groups.

"We've again frozen prices on handset repayment plans and are investing £700m into our mobile network this year to ensure we meet growing demand and give our customers the fast and reliable connectivity they rely on," the O2 spokesperson continued.

"Customers on our social tariffs continue to be exempt from any price changes as part of our efforts to provide support to those who need it most."

Existing customers will receive communication from O2 with more information on the change, and will have the right to exit their contracts without penalty, if they wish.

Sister firm Virgin Media upped mid-contract prices for broadband customers earlier this month, while competitors such as BT and EE confirmed similar changes in July.New customers joining both aforementioned competitors on a broadband package are also subject to a £4 price rise per month midway through their contract, up from the previous £3 mid-contract price increase.

Elsewhere, Plusnet has increased mid-contract price rises to £4 from August 5.

Money can be saved by shopping around for improved deals, and haggling with your current supplier is also an option if you call and threaten to leave. It is better to find a cheaper option elsewhere before taking the latter option by using comparison sites such as Uswitch.com or Moneysavingexpert.com to find a better deal for you.