Consumer watchdog Which? says customers of Virgin Media and O2 will face “a lose-lose choice” between mid-contract price rises or expensive exit fees to leave their contracts early. As Express.co.uk reported earlier this month, customers of Virgin Media O2 (VMO2), the broadband and mobile provider, face mid-contract price rises of up to 8.8% in April based on the UK’s Retail Price Index (RPI) rate of inflation.
All VMO2 customers will see a rise of least 4.9 percent, the latest RPI figure, but some will also face an additional 3.9 percent on top of that.
Which? said if customers preferred to leave their contract to avoid the price increase they would be met with “crippling exit fees”.
“Which? analysis shows that if average customers were with both Virgin Media and O2, they could face a combined exit fee as high as £692.37 if 12 months were still remaining on their contracts,” a press release said. Which? reached this figure, it said, by calculating the average Virgin Media customer wanting to leave their contract 12 months early would see an exit fee of £403.91, with an O2 customer in the same situation charged £288.46.
Virgin Media merged with O2 in 2021, and all previous Virgin Mobile phone customers have now been migrated over to the O2 mobile network.
Which? justified arriving at the nearly-£700 potential exit fee figure by assuming a hypothetical customer with both Virgin Media and O2 who wants to leave their contract but still has 12 months or more remaining on said contract. Which? surveyed 3,665 people in December 2023 and January 2024 to find the average amount paid for home broadband contracts.
One surveyed Virgin Media customer, 74-year-old Colin Smith, said he is dreading his bill going up in April.
“As a pensioner my income is fixed,” he said. “When it comes to contract renewal, I’m looking at every penny. My gas and electric bills are a lot higher than they were. I’ve got a smart meter and can see the money stacking up. Every penny saved on broadband I can spend on heating my house.”
His 18-month contract costs £29 per month for TV and broadband, and ends in summer 2024.
“Virgin Media and O2 customers face a lose-lose choice between huge price hikes and crippling exit fees,” said Rocio Concha, Which? Director of Policy and Advocacy. This comes on top of up to 17 per cent increases faced by some O2 customers last year – few would have anticipated such steep price rises when they signed up.”
Other broadband and mobile providers in the UK will also raise their prices in April against the Consumer Price Index, a different rate of inflation figure to the RPI VMO2 adjusts its fees by. Around this announcement in January, Which? also called for other telecom firms to scrap annual mid-contract price rises, and UK regulator Ofcom has proposed a full ban of price rises linked to inflation.
“Virgin Media customers face the largest hike – both as a percentage and in pounds and pence – out of any of the major broadband firms due to the provider’s use of RPI,” Which said, adding its latest research showed the average Virgin Media broadband customer could see an increase of £39.14 in April.
“2023 was a record year for traffic on our networks as customers used our mobile and broadband services more than ever,” a Virgin Media O2 spokesperson said in reply. “We are investing heavily to ensure we continue to provide the fast and reliable connectivity our customers rely on, and the amount we receive from price increases is greatly outweighed by the £5m we invest every single day to upgrade our networks and services to give customers a better overall experience.
“Which?’s own analysis shows that we continue to offer excellent value, with cable customers paying an average of just 10p more per day, and mobile customers facing an effective average increase of just 5p a day, for services they’re using almost constantly.”
