Major mobile provider with 5million customers to axe ‘sneaky’ price hikes ahead of huge rule change
A MAJOR mobile network is ditching confusing mid-contract price rises from April 2025.
Millions of Tesco Mobile customers will no longer have inflation-linked price rises applied to their pay monthly and sim-only contracts.
The mobile network, which caters to over five million customers, used to increase prices by the consumer price index (CPI) of inflation in December + 3.9%.
However, customers who take out a new broadband or mobile phone contract from December 17 will see their prices rise by a set number of pounds and pence next April.
If you haven’t renewed after this date, you’ll still see your prices rise to inflation.
This change comes in response to an Ofcom consultation that emphasised the need for transparency in mid-contract price increases.
From January 17, 2025, phone, broadband, and pay-TV providers will be prohibited from applying inflation-linked price rises.
However, several telecom firms, including Vodafone, BT, EE, and Plusnet, have already announced these changes ahead of time.
Tesco argues that its new “proportional” model means price rises will be based on the customer’s basic monthly tariff, promising a fairer deal for all.
The mobile network said that someone on a £14.99 a month deal would see their monthly contract price increase by 90p in April.
Customers on a £30 a month deal would see their basic monthly price increase by £1.80 from the same date.
These increases suggest that the typical cost of a customer’s contract will rise 6% from April 2025.
Jonathan Taylor, chief executive of Tesco Mobile, said: “We know how important it is to have certainty around your contract price, and our new approach to annual in-contract price increases has been designed to offer maximum fairness.
“Every customer who takes out a non-Clubcard Price deal from 17 December 17, 2024 will be shown what their annual in-contract price increases will be and when they’ll apply from, with all costs clearly explained in pounds and pence.”
Pay-as-you-go users won’t be affected by the change as they aren’t signed up to a fixed contract.
Some pay monthly customers will also be unaffected by the change.
INFLATION-LINKED PRICE HIKES
TELECOM firms have come under fire for above-inflation mid-contract price rises on fixed contracts for the past four years.
Due to clauses in contracts, providers can impose annual rises, usually in April.
The hikes are tied to either the Consumer Price Index or Retail Price Index inflation rate, which has soared during the cost-of-living crisis.
It means millions of customers faced hikes of up to 8.8% this year — adding as much as £50 to bills.
Firms argue that they need to be able to increase prices to keep up with rising costs.
But consumer experts argue that a fixed contract should live up to its name — and stay fixed.
NOT ALL CUSTOMERS ARE AFFECTED
Customers who take out a Clubcard Price contract will continue to avoid mid-contract price increases.
Tesco Mobile Clubcard Prices offer exclusive discounts on mobile phones, contracts, SIM-only deals, and accessories for Clubcard members.
These customers are also able to make calls, send texts and use their mobile data abroad in EU countries free of charge,
Jonathan Taylor added: “If you’re a customer on one of our many Clubcard Price deals, you’ll enjoy peace of mind, knowing your basic monthly usage price will stay frozen for the length of your minimum contract period.
“And you’ll have the added benefit of no EU roaming fees for the length of your minimum contract period, too – so you’ll be able
to use your UK allowances at no extra cost in 48 destinations across the EU and beyond.”
How does Tesco's Clubcard work?
YOU earn points as you shop, which can then be turned into vouchers for money off food or with Tesco's partners, every time you scan your Clubcard.
You earn one point for each £1 spent, and each point is then worth 1p.
So 150 points get you £1.50, and you would have to spend £150 to get 150 points.
You need a minimum of 150 points to request a voucher.
Any vouchers are worth their face value when used in-store at Tesco.
But you can double their worth by spending them at one of the supermarket chain’s partners.
There are over 100 partners you can spend your Clubcard points with, including the RAC, Disney+ and Virgin Atlantic Flying Club.
Points spent with partners used to be worth triple value, but Tesco changed this to double last year.
Any vouchers transferred into Reward Partner codes expire after six months.
Loyalty cardholders also get access to over 8,000 items for less through Clubcard Prices – including exclusive Tesco Mobile contracts.
OTHER FIRMS HIKES
BT, which also owns EE and Plusnet, confirmed that it would no longer raise prices mid-contract based on a percentage linked to inflation.
All BT and EE customers who took out a new contract after April 10, 2024, are affected.
The price of mobile contracts will rise by £1.50 a month and broadband tariffs by £3 a month from March 2025.
EE TV customers will have to pay an extra £2 a month.
Out-of-bundle services will still be subject to an annual 5% increase.
The provider has said those vulnerable customers on EE Basics or BT Home Essentials contracts will be exempt from any price rises.
Plusnet will also increase its broadband price by £3 per month from the end of March next year.
Customers joining or re-contracting with TalkTalk since August 12, 2024, will see the monthly amount they pay for their broadband increase by £3 annually in April.
Since September 2024, new and upgrading Three customers will see their annual price rise determined by pound and pence.
Broadband increases will be capped at £2 and mobile rises between £1 and £1.50 depending on the data allowance.
CUT YOUR TELECOM COSTS
SWITCHING contracts is one of the single best ways to save money on your mobile, broadband and TV bills.
But if you can’t switch mid-contract without facing a penalty, you’d be best to hold off until it’s up for renewal.
But don’t just switch contracts because the price is cheaper than what you’re currently paying.
Take a look at your minutes and texts, as well as your data usage, to find out which deal is best for you.
For example, if you’re a heavy internet user, it’s worth finding a deal that accommodates this so you don’t have to spend extra on bundles or add-ons each month.
In the weeks before your contract is up, use comparison sites to familiarise yourself with what deals are available.
It’s a known fact that new customers always get the best deals.
Sites like MoneySuperMarket and Uswitch all help you customise your search based on price, allowances and provider.
This should make it easier to decide whether to renew your contract or move to another provider.
However, if you don’t want to switch and are happy with the service you’re getting under your current provider – haggle for a better deal.
You can still make significant savings by renewing your contract rather than rolling on to the tariff you’re given after your deal.
If you need to speak to a company on the phone, be sure to catch them at the right time.
Make some time to negotiate with your provider in the morning.
This way, you have a better chance of being the first customer through on the phone, and the rep won’t have worked tirelessly through previous calls which may have affected their stress levels.
It pays to be polite when getting through to someone on the phone, as representatives are less inclined to help rude or aggressive customers.
Knowing what other offers are on the market can help you to make a case for yourself to your provider.
If your provider won’t haggle, you can always threaten to leave.
Companies don’t want to lose customers and may come up with a last-minute offer to keep you.
It’s also worth investigating social tariffs. These deals have been created for people who are receiving certain benefits.