EE, the company that owns the Orange and T-Mobile brands in the UK, is raising prices for existing customers by 3.3% due to ‘increasing costs’.
It’s also launched a new ‘Fix Your Monthly Plan’ bolt-on that guarantees protection from mid-contract price rises at a cost of up to £2 a month.
The price rise comes into effect on 10 April (Orange) and 9 May (T-Mobile) – EE customers aren’t affected. EE says the mid-contract price rise, the second time Orange and T-Mobile have increased prices for customers in the last two years, is necessary due to increasing costs.
EE believes it will result in a typical increase of less than 75p a month for each customer, however Which? research suggests it’s more likely to be around 79p. Based on this research, Which? believes EE will raise as much as £52 million at the expense of consumers who believed the price of their contract was fixed.
Which? executive director, Richard Lloyd, said ‘it is outrageous that Everything Everywhere is forcing T-Mobile and Orange customers to collectively pay almost £52 million more per year for a mobile phone contract they thought was fixed.
‘We want Ofcom to take action against these price rises and listen to the 40,000 people who have signed our campaign to make sure that fixed really does mean fixed.’??
As a result of Which?’s campaign, Ofcom launched a consultation in January 2013, which closes on 14 March 2013. Vote on what action you’d like Ofcom to take on our Fixed Means Fixed Ofcom consultation page.
‘Fix Your Monthly Plan’ explained
The ‘Fix Your Monthly Plan’ option will vary from 50p to £2 a month depending on your tariff. EE indicated to Which? that those on a £35 a month tariff would have to pay £2 a month to fix the price for the duration of their contract.
Customers also have the option to switch to an EE contract, or a price plan not affected by the price increase. There’s a six month price freeze for Orange customers who join after 2 December 2012 and for T-Mobile customers who join after 22 January.
Why can EE raise prices mid-contract?
EE, like other mobile operators, has a clause buried in its terms and conditions that gives them leeway to increase prices by a certain amount without allowing customers the option to leave their contract without penalty. Each of the major mobile network operators has increased the prices mid-contract in the last 12 months.
Not only does Which? believe the clauses to be unfair, it also believes networks don’t do enough to inform customers of the clause. A recent investigation conducted by Which? revealed 82% of mobile phone shop assistants insisted, when asked, that mobile phone contracts are fixed and could not go up.