According to Tech Digest, O2 is raising mobile bills by £2.50 per month starting in April 2026, which adds up to an extra £30 annually for customers. This increase is 40% higher than the £1.80 monthly hike that customers were informed about when signing their contracts. Technology Secretary Liz Kendall has intervened, demanding regulator Ofcom undertake a rapid review of consumer protection in the telecoms market. Consumer groups are furious, arguing this undermines new pricing transparency rules. O2 claims the increase is necessary to fund network investment and is permitted under current Ofcom rules, while noting customers can exit contracts penalty-free within 30 days.
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The transparency problem
Here’s the thing about this O2 situation: it’s technically legal but feels pretty shady. The company is using what’s essentially a loophole in Ofcom’s rules. See, the regulations require providers to state price increases clearly in pounds and pence upfront. O2 did that – they told people about the £1.80 increase. But then they’re adding another £2.50 on top of that. So they’re not technically breaking the letter of the law, but they’re definitely testing its spirit.
Why this matters
Look, £2.50 doesn’t sound like much – it’s basically 8p per day. But when you’re locked into a contract you thought had predictable pricing, suddenly finding out you’ll pay 40% more than you were told? That stings. And it sets a dangerous precedent. If O2 gets away with this, what’s stopping every other provider from pulling similar moves? Martin Lewis called it a “mockery of the regulator’s consumer protection regime,” and he’s not wrong. The whole point of those transparency rules was to prevent exactly this kind of bait-and-switch pricing.
The bigger picture
What’s really interesting here is Liz Kendall’s proposed solution. She wants Ofcom to consider adopting a system similar to the insurance sector, where existing customers get the same deals as new customers at renewal. That would be huge. Basically, it would end the loyalty penalty that’s plagued telecoms for years. But implementing that won’t be simple – telecom providers make a lot of money from customers who don’t shop around at contract renewal. They’re not going to give up that revenue stream without a fight.
What happens next
So where does this leave us? Ofcom has acknowledged the government‘s concern and called the price rise “disappointing,” but we’re still waiting to see what they’ll actually do. The regulator is in a tough spot – they need to protect consumers without creating overly restrictive rules that could backfire. Meanwhile, customers have that 30-day window to leave penalty-free if they want out. But let’s be real – how many people actually read those notifications carefully enough to act in time? This whole situation feels like a test case that could reshape how telecom pricing works in the UK for years to come.
