Ofcom, the UK’s media regulator, based in Southwark, has criticised mobile operator O2 for increasing its prices by more than it initially promised customers. The move has been described as going “against the spirit” of new consumer protection rules.
Ofcom said it was “disappointed” by the company’s actions, accusing O2 of customer relations opacity regarding mid-contract price rises.
The intervention follows the introduction of new rules in January designed to stop phone and broadband firms from inflation-related price hikes during a contract without giving customers clear, upfront information.
Under those changes, telecoms companies must tell customers in “pounds and pence” how much their bill will increase before they sign up. The aim, Ofcom said at the time, was to prevent “nasty surprises” and ensure customers could make informed decisions.
Despite this, O2 informed its customers that monthly bills would rise by £2.50 from April, having previously advertised that the increase would only be £1.80, an increase of 38.8%.
Ofcom said it had reminded the UK’s major mobile providers of their duty to treat customers fairly and encouraged O2 users who wish to avoid the hike to exercise their right to cancel.
“We encourage any customer who wants to avoid these price rises to exercise their right to exit without penalty and sign up to a new deal,” the regulator said.
O2, however, defended its position, insisting it had not breached the rules.
The company said Ofcom’s regulations were about inflation related hikes, and that prices may need to be raised for other reasons.
O2 said that the rules “do not prevent companies from increasing annual price changes – for example, to invest in improving networks”.
It added that it spends around £700 million a year on infrastructure improvements and that customers are free to leave their contracts within 30 days without penalty.
For those on handset-inclusive plans, the company said device payments would still need to be completed in full.
Critics, however, argue that the policy is unfair to older and vulnerable customers who may not switch or may miss the 30-day window before the changes take effect in April 2026.
Consumer expert Martin Lewis said he was “up in arms” over the decision, warning that O2’s move risked setting a precedent across the telecoms industry.
Speaking on The Martin Lewis Podcast, he said: “O2 customers’ prices are going up – but likely it means the door is open for all of us to now see prices rise by more than we were told when we signed up.”
He accused o2 “making a mockery of Ofcom” and urged regulators and ministers to intervene.
Mr Lewis confirmed he had written a letter about the issue to the chancellor, the technology secretary and Ofcom’s chief executive, calling for stronger enforcement and greater consumer protection.
Telecoms analyst Paolo Pescatore of PP Foresight said “O2 is pushing the boundaries” of the new rules.
“This is extremely unfortunate, given that the mobile operator should be focused on retaining customers in a cut-throat market.”
Tom MacInnes, director of policy at Citizens Advice, said: “The regulator needs to wake up and make these essential markets work for everyone. Ofcom needs to go back to the drawing board and bring forward plans to stamp out mid-contract price rises once and for all.”
Telecoms expert Ernest Doku from Uswitch said that while complaints to Ofcom about mobile and broadband services were “at some of the lowest levels ever”, service quality remained a concern for many customers.
“Against the backdrop of increasing annual price rises, providers need to recognise their responsibility to deliver corresponding improvements in service and value,” he said.
The dispute highlights the necessity and complexity of pricing regulations. While O2 maintains that its price changes are compliant and necessary to fund network investment, Ofcom and campaigners argue the increases undermine public confidence in new protections meant to prevent unexpected costs.
As the regulator reviews the case, pressure is growing for stricter enforcement to ensure that mobile providers cannot bypass the intent of rules designed to keep customers informed and protected.
