Latest Podcast

Featured Articles

Sky launches its own mobile service

Entertainment company Sky has announced what it’s calling “the UK's most flexible mobile service”.

Customers with another Sky service will be able to sign up for Sky Mobile from mid-December, with a full launch expected in early 2017.

Author: The Fonecast
Article rating: 3.0
Vodafone fined £4.6 million by Ofcom

Vodafone fined £4.6 million by Ofcom

UK communications regulator Ofcom is fining Vodafone £4,625,000 for mis-selling, inaccurate billing and poor complaints handling.

This penalty is the result of two separate Ofcom investigations.

Author: The Fonecast
Article rating: 4.0
BlackBerry moves away from handset production

BlackBerry moves away from handset production

Veteran smartphone manufacturer BlackBerry says it’s moving away from producing its own handsets and will instead license its software to other companies.

The first deal is with an Indonesian partner, BB Merah Putih, which is led by a leading telecommunications distributor in Indonesia.

Author: The Fonecast
Article rating: No rating

UK mobile users can now send a text to reduce nuisance calls

The Telephone Preference Service and Ofcom have introduced a new text message service that lets UK mobile users opt out of receiving unsolicited sales and marketing calls.

Mobile phone users can simply text ‘TPS’ and their email address to 78070.

Author: The Fonecast
Article rating: No rating
The Nokia brand is returning to mobile phones and tablets

The Nokia brand is returning to mobile phones and tablets

Android-powered devices being produced by a new Finnish company

Former mobile phone manufacturer Nokia has signed a deal that’ll see a new Finnish company producing Nokia-branded mobile phones and tablets.

The new company – HMD global – is being granted an exclusive branding and intellectual property licence to create Nokia-branded mobile phones and tablets for the next ten years.

Author: The Fonecast
Article rating: No rating

Opinion Articles

Saturday, January 25, 2014

Ofcom changes the rules for mobile phone contracts... and so does O2

Mark Bridge writes:

This week, new Ofcom rules came into force. They’re designed to avoid unexpected price rises during the minimum term of a mobile phone contract. Yes, just because you signed a fixed-term contract doesn’t mean the charges can’t increase. Networks said they needed this option in case of inflation or regulatory changes. Customers felt trapped.

In response, Ofcom clarified its rules concerning a key phrase: material detriment. You see, customers could leave their contract without penalty if any contract changes involved ‘material detriment’. The problem was the lack of a formal definition. If customers complained - and if that complaint then went to independent adjudication - each side would be battling with dictionaries in their hands.

So Ofcom provided guidance on ‘material detriment’. The original wording - Ofcom’s General Condition 9.6 - went like this:

The Communications Provider shall:

a) give its Subscribers adequate notice not shorter than one month of any modifications likely to be of material detriment to that Subscriber;

b) allow its Subscribers to withdraw from their contract without penalty upon such notice; and

c) at the same time as giving the notice in condition 9.6 (a) above, shall inform the Subscriber of its ability to terminate the contract without penalty if the proposed modification is not acceptable to the Subscriber.

In a nutshell: you’ll get a month’s notice, you’ll be allowed to leave without penalty and you’ll have this all explained to you if any changes are of ‘material detriment’. Yup, there’s that phrase again.

So what did those new rules say?

Ofcom is likely to treat any price increase to the agreed core subscription price during the fixed term of a telecommunications contract as a modification that is of, or is likely to be of, material detriment to consumer and small business subscribers.

Excellent. That’s clear. When you sign a new telecoms contract, any price increase to your monthly subscription charge - what was once called ‘line rental’ - is likely to be of material detriment.

There’s even an example.

The subscriber agrees and enters into a 24-month contract for services on terms that the core subscription price will be £10 per month. The contract also contains a term to the effect that the Communications Provider may increase the agreed core subscription price by up to a certain amount, percentage or index-linked level (such as RPI). Ofcom is likely to treat any exercise of the discretion to increase this agreed price during the fixed minimum term of the contract as a modification meeting GC9.6’s material detriment requirement.

Yay!  Price increases that may (or may not) happen at the discretion of your mobile network are history. Well, okay, not technically ‘history’. This only affects new contracts, although that doesn’t stop it from being seen as a very positive move.

But hang on a moment. Put down your party poppers. There’s another example here.

The subscriber agrees and enters into a 24-month contract on terms that the core subscription price will be £X per month for the first 12-months (or some other period) and £X + £Y (or £X + Y%) for the second 12-months (or some other period). On the basis that the relevant price terms are sufficiently prominent and transparent that the subscriber can properly be said to have agreed on an informed basis, at the point of sale, to the relevant tiered price(s), Ofcom would not regard the application of the agreed price in the second period as a modification of the contract capable of meeting GC9.6's material detriment requirement.

Which means price increases are allowed as long as they’re agreed in advance. These new rules don’t eliminate price increases, just unexpected price increases. If your network says “we’ll be changing our prices every year in line with the Retail Price Index”, Ofcom says that’s fine as long as they made it clear before you signed the contract.

Which is what O2 UK have done.

On its web site is a statement that says “We're adjusting our Pay Monthly airtime tariff prices by 2.7% from the 1 March 2014. This is in line with the current Retail Price Index (RPI) rate of inflation announced on 14 January.”

And they’re ready with a response for the naysayers. In a list of frequently-asked questions is “Are you allowed to put my prices up whilst I’m in contract?  It’s not the price I signed up to.”

The answer, says O2, is “yes”. It points out that customers who signed up before the magic Ofcom date of 23rd January 2014 aren’t subject to these new rules. Its terms and conditions allow it to increase monthly subscription charges by the RPI, which is what it’s done.

A-ha. What about people who’ve joined or upgraded after 23 January 2014, eh?

Pretty much the same. Rather than warning that monthly prices ‘may’ change according to inflation, O2 is now telling new customers that monthly charges ‘will’ change. And by making this a definite annual increase (or an annual decrease if the RPI goes down), it’s completely in line with Ofcom’s guidance.

Perhaps not what consumers expected when Ofcom made it’s statement about mid-contract increases - but at least it’s clear.

Already Three UK has distanced itself from this kind of contract condition, issuing a statement that says “Your fixed monthly recurring fee from Three will not go up in the minimum term of your contract. We support Ofcom’s approach to fixing the price for pay monthly contracts for their duration. We think it’s only fair that customers should have clarity around costs when they sign up to a contract.”

The question now is whether O2’s move will be followed by other networks… or whether Three’s example will be their inspiration.

[Ofcom guidance (pdf)]

For the latest mobile industry news every week, download our free podcast. You’ll find it on our website, by subscribing free via iTunes, by using our RSS feed or on the mobile app.
Author: The Fonecast
Rate this article:
No rating

7 comments on article "Ofcom changes the rules for mobile phone contracts... and so does O2"



1/27/2014 8:43 AM

So what about all other prices, such as calls or roaming (not in europe) or admin charges etc etc etc?



1/28/2014 7:07 PM

Its just rip off Britain again isn't it !!

You would have thought a contract would stay the same for the the term nobody reads the tiny grey small print and even if they did unless you know the clever legal wording you wouldnt understand it anyway.

Might only be penny's to our bill but ends up millions to them and the reception is still poor in many areas .



1/29/2014 4:00 AM

I have been with o2 for over 4 years and this is the second price increase in 10 months, last one being March last year. I have spoken to o2 and have been told to send any email to I have request my contract be cancelled with immediate affect and I will not be paying any penalties. I was never informed that I would be subjected to an increase. I should hear from them tomorrow



1/30/2014 9:12 PM

Same here Barry ive been a customer for 10 years, my phone is also on the blink and they have told me i cant cancel and will have to pay penalties if i do. Have you heard from them?u2aqd



1/29/2014 6:55 AM

Guess who I won't be renewing my contract with!


Ms R

3/28/2014 8:41 AM

absolutely disgusting, this is the second pay increase I have had with o2

a £28.00 contract first signed is on its second increase to £32.47

greedy pigs!



8/21/2015 2:34 PM

my mobile network which is virgin is trying to do they same to me although I have explained and provided prove to them that my contract does not have the small print that says ''prices are subject to change''. Therefore, I was not pre-warned or foretold of any expectations of future price changes. But virgin is telling me that the terms and conditions of my contract is ''IRRELEVANT''. I have told them that if the terms and conditions of my contract is irrelevant then I will pay any amount I want as my bill. Can anyone advice because I want to take my case further.

Please login or register to post comments.


Recent Podcasts

Reviewing our 2015 mobile industry predictions... and looking forward to 2016

Podcast - 15th January 2016

Iain Graham, James Rosewell and Mark Bridge return to review their mobile industry predictions from last year. Which mergers, partnerships and developments did they forecast correctly... and which didn’t work out as planned?

Later in the programme, the team anticipates some of the topics that will be hitting the headlines during 2016.

Author: The Fonecast
Article rating: No rating

Podcast from Mobile World Congress 2015

Podcast - 6th March 2015

Mark Bridge learns about the mobile technology trends at Mobile World Congress 2015 by chatting to James Rosewell of 51Degrees, Dr Kevin Curran from the IEEE and Chris Millington of Doro.

They talk about wearable devices, wireless charging, mobile operating systems and much more... including some of their favourite products from the exhibition.

Author: The Fonecast
Article rating: No rating

Looking back at February: from security scares to multiple MVNOs

Podcast - 27th February 2015

We're taking a look back at the biggest mobile industry news stories from February 2015, including allegations that the UK's security service tried to breach SIM card security by hacking into one of the world's biggest SIM producers.

We also talk about the planned BT and EE merger, the creation of two new UK virtual networks, some acquisitions in the mobile payment arena and a new Ubuntu smartphone.

Author: The Fonecast
Article rating: No rating

Interview with Chris Millington of Doro about mobile retailing, wearables and technology for older consumers

Podcast - 24th February 2015

In today's programme Mark Bridge talks to Chris Millington, who's Managing Director for Doro UK and Ireland.

They discuss the state of mobile retailing in the UK, the future of wearable devices and - as you might expect - smartphones for seniors.

Author: The Fonecast
Article rating: No rating

A month of mobile: O2 counts on 3, Microsoft counts to 10 and Apple counts its profits

Podcast - 30th January 2015

We're back with a month of mobile industry news, including takeover talks and takeover rumours. O2 and Three are said to be discussing a merger... but is there any truth in the suggestions that BlackBerry could be up for grabs?

We also discuss Apple's record-breaking quarterly figures, the highlights of CES and the launch of Microsoft Windows 10, as well as saying farewell to the current version of Google Glass.

Author: The Fonecast
Article rating: No rating


Twitter @TheFonecast RSS podcast feed
Find us on Facebook Subscribe free via iTunes

Archive Calendar

«July 2019»


Terms Of Use | Privacy Statement