O2 and Virgin Mobile customers to pay 17.3% more for calls, texts and data

theguardian.com:

Millions of consumers with O2 and Virgin Mobile contracts are to be hit with an inflation-busting 17.3% increase in their bills for making calls, sending texts and using data, adding to pressure on households amid the cost of living crisis.

The price hike is the latest in a series of big increases imposed on consumers for vital utilities, and will add to pressure on the government to step in with tougher protections.

The telecoms operators – merged under the same umbrella company since 2021 – confirmed the cost of their airtime contracts, or what customers pay for calls, texts and data, would go up by the annual rate of retail prices index (RPI) inflation announced this week, plus 3.9 percentage points.

Official figures on Wednesday showed RPI stood at 13.4% in January, landing consumers with a 17.3% increase in their airtime bills in total – almost triple the rate of growth for average workers’ pay. Consumers will see the increase from April.

Rishi Sunak has promised to halve inflation this year as the cornerstone of his economic policy, while insisting teachers, nurses, and other public sector workers must accept pay deals significantly below inflation to achieve this goal.

However, the rise in mobile and broadband costs far outstrips the government’s preferred consumer prices index (CPI) measure of inflation, which fell slightly to 10.1% in January but remains at among the highest rates since 1981.

It comes amid growing concern over the looming rise in telecoms bills from other providers this spring, with consumer groups warning that hard-pressed families will be forced to cut back on everyday essentials such as food, energy and clothing.

“Prices jumping by so much in one year is a serious concern,” said Lucy Powell, the