Mobile contract prices on the rise: are you paying too much?

Mobile customers at three of the 'big four' providers are being notified of prices rises to contracts, with Vodafone set to follow.

O2 and Three customers will see their mobile phone bill go up by 2.5% in May, whereas EE customers' bills are rising by 2.7% at the end of March. Vodafone has also announced it will raise their prices, and will confirm by how much on Wednesday 20th March.

We look at the options for mobile customers and explain exactly who it will affect.

Tempted to try a new provider? Find out the best and worst mobile providers for 2019.

Can I exit my mobile contract early penalty-free?

The newly announced price rises are in line with the Retail Prices Index (RPI), which is a measure of inflation, and is a rise which is detailed in many mobile phone contracts.

This means that when prices increase, you are very unlikely to be ableto exit your mobile contract early without being liable to pay penalty charges.

RPI price increases typically affect those with mobile contracts that includes a mobilephone, and people with sim-only contract plans of more than 30 days.

Alex Neill, Managing Director of Home Products and Services at Which?, said:

'While they aren't breaking any rules, these increases will be frustrating for those tied into pay-monthly contracts.

'We would advise checking when your contract ends as many people unwittingly stay on an overpriced deal. Anyone who is nearing the end of their contract should prepare to haggle for a better deal or leave and find a better offer.'

To find out more about your rights to cancel, read our guide on exiting your mobile contract early penalty-free.

What if I'm out of contract with my provider?

If the initial period of your contract has expired, you have far more options.

Haggle for a better mobile contract

You can haggle with your current provider to get a better deal - and this is especially important if the price hasn't already dropped. When your initial contract period expires you will have paid off the cost of the handset, which means you should only continue to pay for call and data allowances in your bundle.

Our guide on haggling for the best mobile phone deal has all the tips and tricks to stop you overpaying for the contract.

Switch to a 30-day Sim-only contract

Many mobile providers, including EE, O2, Three and Vodafone, offer 30-day Sim-only contracts which are usually always exempt from RPI price rises and can be a great low-cost alternative to expensive two-year contracts that include a mobile phone.

With your phone paid off at the end of your contract, this could be a good way to avoid these price rises in the future, assuming you want to stick with your current provider.

For many people, buying a phone, either outright or on an interest-free credit plan, alongside a 30-day Sim-only plan can save hundreds of pounds a year.

Find the best deal on a new phone and mobile contract

If you're out of contract and also feel the time is right to upgrade your phone, make sure you're clear on how much you're paying, and whether you're better off taking out a new contract or buying the handset outright, with a Sim-only deal. The latter offers more flexibility, and is usually, but not always, cheaper in the long run.

Use our phone contract calculator tool below to find out if you're better off going Sim-free or contract on your next handset.

Which? is calling for greater transparency on mobile phone contracts

One interesting aspect of the new prices rises is that O2 customers with a Refresh tariff will see a smaller increase. This is because bills are split into the cost of repaying the handset, and the cost of a monthly bundle.

The price rise only applies to the monthly bundle, not repayment of a handset.

It's another example of the confusing nature of mobile phone contracts - a situation that is exacerbated by providers who continue to charge the full contract amount once the initial period expires.

Since 2014, Which? has been calling for transparent mobile handset charges on customer bills and for these charges to be dropped automatically when the handset is paid off.

Last year, Ofcom, the telecoms regulator, consulted on new proposals for mobile handsets. It identified two potential solutions - one requiring communications providers to be more transparent with customers about the costs of the different parts of the mobile package they are purchasing and the other that providers should automatically introduce fairer tariffs at the end of the customers contract period so that the they stop paying for the handset automatically.

Which? supports Ofcom's proposals - we believe that Ofcom should introduce both of its proposed solutions- and will continue to push for consumers to be given an informed choice when it comes to choosing a mobile phone contract.

Browse all our mobile provider reviews to see how they fared on measures such as customer service and value for money.