28 February 2024 , 00:01
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Customers of merged giant Virgin Media and O2 risk being walloped with a near £700 in penalty fees to avoid price hikes in April, claims consumer group Which?.
Broadband and mobile customers with Virgin Media O2 face inflation-busting price rises of up to 8.8% - the highest of any major operator. But those locked into a contract have the choice of being hit with hefty exit fees for cancelling early. The consumer group calculated that if the average Virgin Media broadband customer were to leave their contract 12 months early they faced fees of £403.91.
It says the average Sim-only O2 customer, with a year left on their contract, who did not want to be landed with April’s price hike and wanted to switch away instead would face an exit fee of £288.46. Since the companies merged in June 2021, Virgin Mobile customers have been migrated to O2 and they began offering bundled deals.
Rocio Concha, director of policy and advocacy at Which?, said: “Virgin Media and O2 customers face a lose-lose choice between huge price hikes and crippling exit fees. This comes on top of up to 17% increases faced by some O2 customers last year - few would have anticipated such steep price rises when they signed up.
“Ofcom has clearly stated that the practice of inflation-linked mid-contract price rise terms can cause substantial consumer harm. Telecoms firms must do the right thing and immediately scrap these rises, rather than cynically taking the opportunity to cash in one last time at the expense of their customers before new rules take effect.”
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A Virgin Media O2 spokesperson said: “We are investing heavily to ensure we continue to provide the fast and reliable connectivity our customers rely on, and the amount we receive from price increases is greatly outweighed by the £5million we invest every single day to upgrade our networks and services to give customers a better overall experience.
“Which?’s own analysis shows that we continue to offer excellent value, with cable customers paying an average of just 10p more per day, and mobile customers facing an effective average increase of just 5p a day, for services they’re using almost constantly.
“This is further backed up by recent independent analysis which found that the cost of telecoms services has fallen by a fifth since 2017, while at the same time speeds and usage have increased significantly.”