O2 Breaks Price Promise – Will TV And Broadband Follow?

Up to 15 million O2 mobile customers are facing price increases 40% higher than they were promised when they signed their contracts – and the UK’s media regulator Ofcom has simply said it’s “disappointed”.

We don’t usually cover mobile phone plans on Cord Busters, but what O2 has just done affects everyone who pays for TV, broadband, or mobile services in the UK.

The mobile network, which is owned by the same company as Virgin Media, has broken its pricing promise to customers – and rather than taking action, Ofcom has merely expressed disappointment.

This sets a dangerous precedent that will almost certainly spill over to broadband and pay-TV providers. If O2 can get away with this, what’s to stop BT / EE or Virgin Media TV from doing the same?

And Sky is already operating a similar model, though at least they told customers upfront that percentage-based rises could vary.

The whole point of Ofcom’s new pricing rules, which came into effect in January, was to give customers certainty. You’d know exactly what you’d be paying throughout your contract, in pounds and pence, with no nasty surprises.

That promise now lies in tatters.

What Actually Happened

On Wednesday, O2 started emailing up to 15 million existing customers to inform them that their monthly bills would increase by £2.50 from April 2026.

The problem? When these customers signed up, O2 had told them prices would only rise by £1.80 per month.

That’s a 70p difference – or 40% more than they were promised. For context, that’s an annual increase of £30 instead of the £21.60 customers were expecting.

Now, yes, it may not sound like much – but this price increase could be the canary in the coal mine for future unexpected price hikes.

O2 told customers they have 30 days to leave their contracts without penalty charges, though anyone with a handset included would still need to pay off the device in full.

The company insists it hasn’t broken any rules and points to its annual investment in network infrastructure.

An O2 spokesperson said: “With demand for mobile data at an all-time high, we’re introducing a 70p per month increase to annual price rises for O2 customers, effective each April.

“An annual rise of £2.50 a month – around 8p a day – continues to represent excellent value for services that customers are using more than ever before. We’ve again frozen prices on handset repayment plans and are investing £700m into our mobile network this year to ensure we meet growing demand and give our customers the fast and reliable connectivity they rely on.

“Customers on our social tariffs continue to be exempt from any price changes as part of our efforts to provide support to those who need it most.”

Ofcom’s Response: Disappointment Without Action

Ofcom’s statement, following O2’s announcement, was remarkably weak. The regulator said it was “disappointed” with O2’s decision and that it “goes against the spirit of our rules” – but stopped short of actually doing anything about it.

In a statement, Ofcom said: “We want customers to have certainty about their monthly mobile bills so they can plan their household budgets.

“That’s why earlier this year we banned unpredictable price rises linked to inflation and instead required providers to tell customers upfront in pounds and pence about any increases in their contract.

“We are disappointed by O2’s decision. This goes against the spirit of our rules which are designed to ensure greater certainty and transparency for customers when they sign up.”

The regulator then wrote to major mobile companies “reminding them of their obligations to treat customers fairly” and encouraged customers to switch providers if they want to avoid the rises.

That’s it. No enforcement action, no penalties – just disappointment and a reminder to be nice.

Social media reaction has been swift and brutal, with commenters pointing out that Ofcom appears completely toothless.

The regulator created rules that were supposed to protect consumers, but when a major provider drives a coach and horses through the spirit of those rules, all Ofcom can muster is a strongly-worded letter expressing disappointment.

The Background: How We Got Here

To understand why this matters so much, we need to rewind to why Ofcom introduced these rules in the first place.

For years, TV, broadband, and mobile providers used inflation-linked price rises that were genuinely confusing. Contracts included clauses about increases tied to “CPI plus 3.9%” or “RPI plus 3.9%” – formulas that meant absolutely nothing to most customers.

The real problem was unpredictability. You’d sign up for a £30 monthly package over 24 months, but you had no idea what it would cost next year because you couldn’t predict inflation.

When RPI hit 10% in 2022, customers suddenly faced increases of 13.9% on their bills. If you were paying £60 for a bundle, that was an extra £8.34 every month – and because you were locked into a contract, there was nothing you could do about it.

Consumer champions, including MoneySavingExpert founder Martin Lewis, campaigned loudly for years to ban above-inflation mid-contract price rises entirely. Just freeze the price for the duration of the contract – simple.

Ofcom didn’t go that far. Instead, in July 2024, the regulator announced it would ban inflation-linked rises and require providers to state any future increases in pounds and pence at the point of sale.

The new rules came into effect on January 17, 2025.

It wasn’t what many campaigners wanted – mid-contract rises were still allowed, just not tied to inflation – but at least it gave customers certainty.

You’d know exactly what you’d be paying throughout your 24-month contract. No surprises, no complex formulas to decipher, just straightforward numbers you could budget for.

Providers adapted. BT and EE initially set annual increases at £3 for broadband and £2 for TV. Virgin Media went with £3.50 across the board.

Sky took a different approach, keeping percentage-based rises (around 6.2% most recently) but allowing some customers to leave penalty-free, which technically exempted them from the new rules.

The Problem Gets Worse

Here’s where things started going downhill even before O2’s latest move – though there’s a big difference.

In July 2025, BT and EE increased their annual broadband rises from £3 to £4 per month.

Then in October, Virgin Media followed suit, bumping their annual increase from £3.50 to £4 per month – just 11 months after announcing the £3.50 figure.

But here’s the key point: these increases only applied to new customers signing up after those dates. If you’d already signed a contract with BT promising £3 annual increases, you’d keep paying £3 increases for the duration of that contract.

That’s the whole point of the “pounds and pence” system – you know what you’re signing up for, and it doesn’t change.

It was still frustrating for new customers, and it raised legitimate questions about where these increases would end. From £3 to £4. Why not £5 next year? Then £6? Without the natural brake that inflation rates provided, what stops companies from simply testing the market to see what they can get away with?

But at least the spirit of Ofcom’s rules was intact. The figures providers stated upfront were the figures customers would actually pay throughout their contracts.

What O2 Just Changed

O2’s move tears that principle apart. They’re not just increasing the fixed amount for future customers – they’re changing it for people already under contract who were told a specific figure.

The changes apply to existing O2 customers, as well as new and re-contracting customers, from October 23 2025.

No prices are changing immediately – the actual increases take effect each April, starting April 2026. But the promise made to existing customers has been broken.

Think about what this means. You signed a contract in good faith, told your annual increase would be £1.80 per month. You budgeted for it. You made a decision based on that number.

Now O2 is saying “actually, it’s going to be £2.50” – and yes, because they’re giving you 30 days to leave penalty-free, they haven’t broken Ofcom’s rules.

It’s a massive loophole. The entire point of the pound-and-pence system was that customers would “know what they’d pay”. Now they don’t. Providers can apparently change these figures whenever they like, as long as they offer a penalty-free exit window.

Martin Lewis Weighs In

Martin Lewis has gone further than just expressing disappointment. He’s written an open letter to the Chancellor, the Technology Secretary, and the head of Ofcom, calling for urgent action.

In the letter, Lewis pulls no punches: “In reality, this makes a mockery of Ofcom’s new ‘pounds and pence’ consumer protection regime. The whole concept – that ‘people will know what they’d pay’ – is now a busted flush.”

He points out that O2 will have done its sums and clearly believes the penalty-free exit option isn’t an effective deterrent.

Most customers simply won’t switch – they’ll miss the 30-day window, or they’ll see “price rise” in an email and not fully process their right to leave, or they’re older and vulnerable and less likely to switch providers.

Lewis argues that it’s “even starting to look like Ofcom’s change has resulted in many customers, especially those on cheaper tariffs, seeing far bigger price rises than they would’ve done on the old mid-contract inflation-linked price rises.”

With current inflation running much lower than the double-digit figures we saw in 2022, customers on cheaper plans facing 30% annual increases would have seen far more modest rises under the old CPI-plus-3.9% formula.

What This Actually Means – And What Happens Next

Let’s be clear about the precedent O2 has just set.

They’ve shown every provider in the TV, broadband, and mobile market that they can change the fixed increases they promised customers, offer a 30-day penalty-free exit window, and Ofcom will do nothing more than express disappointment.

If you’re thinking this doesn’t affect you because you don’t have O2 mobile, think again. Virgin Media – who own O2 – has already increased their annual TV and broadband rise from £3.50 to £4 this year for new customers.

What’s to stop them (and other companies) announcing next year that existing customers will now face £5.50 instead of the £4 they were promised? They can just offer that 30-day exit window and follow the same playbook.

If other providers follow O2’s lead, we could see a cascade of “revised” price increases throughout 2026 and beyond. Customers who thought they’d budgeted correctly will suddenly find their bills are higher than planned.

Over a 24-month contract, even an extra £1.50 per month adds up to £36 you weren’t expecting.

This could actually end up being worse than the old inflation-linked system. At least with CPI or RPI increases, there was some connection to economic reality – if inflation was low, your increase was modest.

Under this new system, customers think they have certainty, but they don’t. Providers can apparently revise these increases whenever they like, and because most customers won’t switch during that 30-day window, the providers know they can get away with it.

Ofcom’s own director said when the rules launched: “Our new rules mean there will be no nasty surprises, and customers will know how much they will be paying and when.”

That promise lasted less than a year.

What You Can Actually Do

If you’re an O2 customer affected by this increase, you have 30 days from receiving the notification email to leave without paying early termination charges.

Yes, that means acting now, not waiting until April when the price rise actually hits your bill. If you wait until you see the increase on your bank statement, it’ll be too late to leave penalty-free.

If you have a handset included in your contract, you’ll still need to pay off the device – but you can continue making those monthly payments while switching to a cheaper SIM-only deal elsewhere.

Ofcom has provided some guidance for anyone looking to switch:

Know your rights. Your provider must give 30 days’ notice and let you exit penalty-free if they increase prices beyond what was agreed. That window starts when you receive the notification, not when the increase takes effect.

Shop around. Use price comparison sites to check what’s available. The mobile market is competitive, and there are often good deals if you’re willing to switch.

Text to switch. You can move to a new mobile provider by sending a simple text. Send “INFO” to 85075 for free to start the process.

Consider social tariffs. These cheaper packages are available for people claiming Universal Credit, Pension Credit, or other benefits. Prices are frozen and won’t increase mid-contract.

Check coverage. Use Ofcom’s “Map Your Mobile” tool to see which provider offers the best signal in your area before switching.

The same principles apply if you’re with any other provider that announces similar changes. The best defence against these revised increases is to vote with your feet and switch to a competitor.

But here’s the uncomfortable truth: most people won’t do this. They’ll see the email, feel annoyed, possibly even outraged – and then do nothing. Life gets in the way. Switching feels like hassle. The 30-day window closes, and they’re stuck with the higher prices.

Providers know this. They’ve done the modelling. They understand that a small percentage of customers will leave, but the vast majority will stay and pay the higher prices. 

For now, if you’re an O2 customer, check your emails, know your rights, and seriously consider switching. And if you’re with any other provider, watch your inbox carefully – because this might just be the start.

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