- Customers will pay more for broadband and mobile airtime bills
- The company uses the RPI inflation index to set price increases, unlike most that use the CPI.
- Virgin Media O2 says increase needed and still represents ‘fantastic value’
Virgin Media O2 mobile and broadband customers face price rises of 8.8 per cent since April, the highest increases in the UK.
Almost all internet and phone bills will rise from March to May this year as companies pass on costs linked to inflation, often with an additional charge.
Most companies are increasing these prices by an average of 7.9 percent, which is the December consumer price index (CPI) inflation figure of 4 percent plus up to 3.9 percent as a charge additional.
But Virgin Media O2 is increasing bills by 8.8 per cent since April 1, the biggest ever rise in broadband and mobile prices.
In the loop: Virgin Media broadband bills to rise by more than 8 percent
This is because the company uses a different measure of inflation to base its bill increases: the retail price index (CPI) measure for January 2024, which was announced today at 4.9 percent.
On top of that, Virgin Media O2 adds 3.9 per cent, an increase of 8.8 per cent.
Virgin Media O2 is made up of Virgin Media for broadband, and O2 for mobile and tariffs.
The firm said Virgin Media customers will see a price rise of an average of £4.16 a month, which it defends as being “around the cost of a takeaway coffee”.
A Virgin Media O2 spokesperson said: “This illustrates the fantastic value we continue to offer customers for connectivity that is being used more than ever.”
Meanwhile, O2 customers will see a price rise of 8.8 per cent, but only on the airtime element of their mobile phone bills.
This is because the price increases only apply to the part of the phone bill that pays for data and calls, not the phone itself.
The mobile phone company said customers’ overall monthly bill will increase by 5 percent in real terms.
| Firm | Average price increase | It applies to |
|---|---|---|
| Medium Virgin O2 | 8.8% | Mobile bandwidth |
| B.T. | 7.9% | Mobile bandwidth |
| USA | 7.9% | Mobile bandwidth |
| plusnet | 7.9% | Broadband |
| Three | 7.9% | Mobile bandwidth ( |
| Vodafone | 7.9% | Mobile bandwidth |
| Talk Talk | 7.7% | Broadband |
| Darling | 6.7% | Broadband |
| Note: Social tariffs are not increasing in price, price increases for SIM only offers will vary | ||
A Virgin Media O2 spokesperson said: ‘2023 was a record year for traffic on our networks, as customers used our mobile and broadband services more than ever.
“We are investing heavily to ensure we continue to provide the fast, reliable connectivity our customers rely on, and the amount we receive from price increases is more than offset by the £5 million we invest every day to improve our networks and services to provide customers with a better overall experience.”
However, in line with Ofcom rules, Virgin Media O2 will not pay bills to customers for its social rates.
A social tariff is a cheap mobile or broadband offer that is only available to struggling households.
These arrangements are not open to everyone and are mostly restricted to those on benefits, lower incomes or older people.
Most broadband companies rely on Openreach’s infrastructure to bring broadband to consumers’ homes and pay the BT-owned company an annual fee.
That fee rises with inflation each year, according to Ofcom rules, and broadband providers would argue that their costs also have to rise at least by inflation.
Not only this, but companies say that between a third and a quarter of their customers do not see price increases because they are on a social rate, are vulnerable or have certain fixed rate offers.
However, the cost of providing broadband to these people continues to rise each year in line with inflation, meaning companies are looking to pass the costs on to other customers.
But these reasons – usually mentioned secretly by mobile phone and broadband companies – do not explain why many of their prices increase significantly more than inflation.
They also don’t explain why the now-common practice of adding a fee to inflation-linked increases is fairly new, and many providers have only adopted this tactic in recent years.
Alex Tofts, broadband expert at Broadband Genie, said: “In 2023, Virgin Media, like many of the widely available providers, significantly increased its prices for customers.
‘This year, another considerable increase is expected using the CPI figure, although with inflation declining, the jump is anticipated to be less dramatic.
“The advantage for Virgin customers is that even if they are mid-contract, they will have no choice but to bear the additional cost, as leaving can incur a hefty exit fee.”
Find the fastest, cheapest broadband and see if you can save
Broadband, TV and phone contracts are notoriously rigid, with customers often allowing deals to remain in place for many years while providers raise prices.
But you might get faster broadband, a better TV package and a better phone deal, while saving money every month.
It is always worth comparing prices to see if you can save, especially when the cost of living crisis worsens.
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