Virgin Media O2 announced today it’s ditching those confusing inflation-based price rises. Instead, they’re switching to a straightforward system where you’ll know exactly how much extra you’ll pay each year.
Starting in 2025, Virgin Media broadband and TV customers will see their bills go up by £3.50 every April, while O2 mobile users will pay an extra £1.80 per month on their airtime plans.
But what does this actually mean for your wallet – and are customers going to be better – or worse – off? Let’s break it down.
Why This Matters
If you’ve got Virgin Media broadband (with or without their TV service) right now, your contract probably includes something about “RPI plus 3.9%” price rises.
Sounds complicated? That’s because it is.
RPI (Retail Price Index) is just a fancy way of measuring inflation – how much prices are going up across the country. The problem is, you never know what that number will be until it’s announced.
Last year, for example, RPI was a whopping 10%. Add Virgin’s extra 3.9%, and customers saw their bills shoot up by 13.9% – and there was nothing most of them could do about it, because they were under contract.
So if you were paying £30 a month for broadband, suddenly you were paying an extra £4.17 each month. And if you had a bigger package – say a £60 broadband and TV bundle – that jump was more than £8 every month.
Ofcom’s New Rules
The TV and broadband watchdog Ofcom finally said “enough is enough” earlier this year.
From January 17, 2025, providers won’t be allowed to use these unpredictable pricing schemes anymore. Instead, companies will have to:
- Tell you exactly how much your bills will increase by – in pounds and pence
- Show this information clearly before you sign up
- Include all the details in your contract documents
- List every price rise that will happen during your contract
- Make sure the information is as visible as the initial price when you’re shopping online
- Explain it clearly if you’re buying in a shop or over the phone
The rules apply to your whole package too – so if you’ve got TV, broadband and mobile bundled together, you’ll know exactly how much extra you’ll pay for everything.
Importantly (and unfortunately), Ofcom isn’t completely banning mid-contract price increases – companies can still increase your bills while you’re under contract. They just need to be crystal clear about it from the start.
What Virgin Media’s New System Means For You
Today, Virgin Media O2 announced exactly how much they’ll increase prices by each year, replacing their confusing inflation-based rises with fixed amounts.
The company says they need these yearly increases because we’re all using more and more data – their customers used 13% more broadband data and 26% more mobile data last year alone.
Here’s exactly how much extra you’ll pay each year from now on, under the new rules:
- Broadband (and TV) customers will pay an extra £3.50 per month (about 12p a day)
- O2 mobile customers will pay £1.80 more per month on their airtime plans
- If you’re on a social tariff (like Essential Broadband), your prices won’t go up at all
These changes will affect new and re-contracting Virgin Media broadband customers. If you’re under an existing contract, your price will go up using the old system – until you renew your contract with Virgin Media.
Let’s look at how the new system compares to the old one:
For a £30 broadband package:
- New system: £3.50 extra per month, no matter what
- Old system with high inflation (10% like last year): £4.17 extra
- Old system with lower inflation (say 5%): £2.67 extra
For a £60 TV and broadband bundle:
- New system: Still just £3.50 extra per month
- Old system with high inflation: £8.34 extra
- Old system with lower inflation: £5.34 extra
In simple terms, Virgin Media’s new system could save you money when inflation is high (like it was last year), but might cost you a bit more when inflation is low – particularly if you’re on a low-cost plan.
The big difference is that you’ll know exactly what’s coming – no more nasty surprises when inflation figures are announced.
And if you’ve got a bigger package with TV included, the new fixed £3.50 increase could save you quite a bit compared to the old percentage-based system that hit expensive packages harder.
What Other Companies Are Doing
BT and EE already made this switch earlier this year. Their customers now pay, every year:
- £1.50 extra for EE mobile
- £2 extra for EE TV
- £3 extra for BT or EE broadband
Sky has partly changed too – they’re using flat increases for TV (like the £2 rise on Entertainment packages last April), but haven’t announced what they’re doing about broadband prices yet.
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