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O2 under fire over 2.7% pay monthly price hike

Mobile operator accused of side-stepping new Ofcom rules by announcing price hike on same day.

Price caps

O2 has come under fire for announcing a 2.7 per cent price hike for its eight million pay monthly customers on the same day Ofcom's new penalty-free contract switching rules came into force.

The regulator ruled last week that mobile customers should be allowed to exit contracts with providers without being made to pay penalty fees if they were not warned at the point of sale about the prospect of price rises.

O2 has seemingly side-stepped the rules by confirming the price of its Pay Monthly airtime tariff will increase by 2.7 per cent from 1 March 2014.

The rules came into effect on 23 January, the same day the O2 price hike was announced. Ofcom has stipulated that only contracts signed after this date will be covered by the new rules.

Therefore, existing O2 customers will have to pay more each month, whereas new customers that joined the firm from 24 January onwards should be able to exit their contracts without paying a penalty.

This is in line with O2's terms and conditions for customers that signed up before 23 January, which state: "We are entitled to increase your monthly subscription charge by no more than RPI (Retail Price Index) and no more than every 12 months."

In a statement, O2 said the price hike was designed to counter the effects of inflation.

"Price increases are never welcome, but inflation has an impact on our costs. For most of our customers it will mean an additional charge of less than 60 pence on their monthly subscription," the statement read.

"We continue to invest in our network and the services that matter to our customers while still offering great value for money."

News of the price rises has not gone down well with customers, with many taking to social networking sites Twitter and Facebook to express their frustration at the move.

IT Pro contacted O2 to ask them to comment on the customer reaction to the price hike news, but was still awaiting a response at the time of writing.

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