Ofcom takes on price hikes with new set of rules

Oliver Smith
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TELECOMS regulator Ofcom has ruled that consumers will be able to ditch their mobile, broadband or landline contracts if providers raise prices during the contract, however the ruling could spell the end of cheap iPhones on contract.

Telecoms operators often increase prices during a contract in order to deal with rising costs and inflation.

“We think the sector rules were operating unfairly in the provider’s favour, with consumers having little choice but to accept price increases or pay to exit their contract,” said Ofcom consumer director Claudio Pollack.

Ofcom has told operators that any increase to a monthly subscription charge should be considered materially detrimental to consumers, and therefore they must be able to break the contract without penalty.

However mobile networks could stop their practice of subsidising mobiles such as the iPhone and recouping the cost over the course of the contract.

“The operators have been critical of this during the consultation, saying that this could spell the end of the subsidised handsets,” said Ovum telecoms analyst Matthew Howett.

“We will be taking some time to review this lengthy document so that we can fully understand what it means for customers,” said a Vodafone spokesperson.